By Anna Daniels
Around this time last year, the city of San Diego signed an Economic Development Assistance Agreement with Illumina, Inc. It was approved on August 7th as a “Consent Item” without pre-hearing noticing. The ten year deal included a promise to rebate $1.5 million in sales and use taxes in return for retaining “over 100 middle-wage manufacturing job opportunities” in San Diego.
SDFP editor Doug Porter wrote at the time Illumina is in the genomics business, and it is exactly the kind of company the city should be encouraging to put down roots and prosper here. This deal made by the Faulconer administration, however, is exactly the kind of governance the city doesn’t need.
So how is Illumina doing one year later? What has the public received in return for its largesse?
Life is very, very good for Illumina CEO Jay T. Flatley
If CEO pay is an indication of how well a company is doing, Flatley’s $128, 848, 075 annual compensation blows every other San Diego CEO out of the water according to the July 5 U-T article “San Diego’s Top Paid CEOs.” Nuvasive CEO Alexis Lukianov is a distant runner up with only $40 million.
Illumina’s revenue last year was over $2.2 billion. As Freeman and Wheaton note in what can only be read as droll understatement Executives aren’t paid like most Americans, who earn wages and perhaps commissions or bonuses.
Is Illumina very, very good for San Diego?
The controversy last year over the rebate centered around the lack of transparency surrounding the Economic Development Assistance Agreement. The unsourced media spin that Illumina was considering a move to either Poway or Memphis was equally problematic. The message was clear. If we didn’t open the public coffers to Illumina, San Diego would lose hundreds of good paying jobs. We have heard this before–give us your wallet or we shoot your puppy.
Good paying jobs and the H1-B visa
The July 10news article “San Diegans may be locked out of thousands of high-paying jobs” examines the use of H1-B visas in San Diego. These are non-immigrant visas that enable US businesses to employ foreign workers in specialty fields for a lower salary. Which San Diego companies use these lower paid employees?
Companies are only supposed to use what are called H1-B visas when they can’t find qualified workers in the U.S. Last year, about 4,300 jobs in San Diego County were filled by the visas at employers like Qualcomm, Illumina and Intel. [Emphasis added]
SDFP contributor John Lawrence did a deep dive into the transference of wealth upward last year in “The Fishiness of Mayor Kevin’s Tax Giveaway to Illumina Corporation.” He concludes with
The Illumina rebate is just the beginning, the advent of a new era in San Diego politics, the signal that more is yet to come. The Mayor is sending a message to business. C’mon y’all, line up for your free tax giveaways. Mayor Kevin is open for business!
Yes, the rebate was just the beginning. While no one was watching, citizens not only lost their wallet but the puppy got it in the head.
Anna Daniels
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Since the 90s, wages have been suppressed. In constant dollars, middle and lower income people are actually earning less now than they were in the 70s. So after nearly 30 years of stagnant incomes (but with rising productivity from workers who fear losing their jobs) Americans are either homeless or stressed out at their worksites. Add the drive to robotize and we’ll be losing bus drivers and airline pilots and more and more assembly line workers, while more money goes into electronics and technology and finance, and the hands of the CEOs who manage those sectors.
As I see it, this story is mostly about Faulconer, not Illumina. I assume our PR focused Mayor simply gave a company a gift (from the citizens of the city) in exchange for a PR opportunity for himself. That’s pretty much it. Most likely his team felt he needed to have a little positive press that made him look like he was doing something besides just helping out developers make money off our city, so they cooked this idea up.
The latest price hike scandal is EpiPen wose cost has risen 400% recently to $600 for a package of 2 pens. The Epipen sold for $100. in 2008. The CEO, Heather Bresch, is daughter of Senator Joe Manchin, democrat of West Virginia.
From 2007 to 2015, Mylan CEO Heather Bresch’s total compensation went from $2,453,456 to $18,931,068, a 671 percent increase. During the same period, the company raised EpiPen prices, with the average wholesale price going from $56.64 to $317.82, a 461 percent increase.