The Real Economic Impact: Jobs and Tax Revenue from Data Centers
When tech companies propose data centers in rural communities, they often lead with promises of economic revitalization and job creation. Let’s examine what the data actually shows.
The Jobs Promise vs. Reality
Data centers are capital-intensive but not labor-intensive. Here’s what studies of similar facilities show:
Construction Phase
- Temporary boost: 100-500 construction jobs for 18-24 months
- Most workers: Imported specialists, not local hires
- Housing strain: Temporary workers increase demand for short-term rentals
Operational Phase
- Permanent jobs: Typically 30-50 full-time positions for a large facility
- Skill requirements: Most positions require specialized IT training not available locally
- Service jobs: Some indirect employment in food service, security, maintenance
- Land use: 520 acres producing fewer jobs than traditional agriculture or light manufacturing
Tax Revenue: A Closer Look
Proponents often cite property tax revenue, but the reality is more complex:
The Tax Abatement Game
- Companies typically negotiate 10-15 year property tax abatements
- Sales tax exemptions on equipment purchases
- Utility rate discounts that shift costs to residential customers
- Net revenue to county may be minimal for the first decade
Infrastructure Costs
Rural communities often bear unexpected costs:
- Road upgrades to handle construction traffic
- Water and electrical infrastructure expansion
- Emergency services scaling (fire protection for server facilities)
- School capacity if workers relocate with families
Case Studies from Other Rural Communities
Prineville, Oregon (Facebook Data Center)
- Promised: 200+ permanent jobs
- Reality: ~150 jobs, mostly requiring relocation of specialists
- Property tax breaks lasted 15 years
Henrico County, Virginia (QTS Data Center)
- $6.5 billion investment
- Created 50 permanent jobs
- Required county to extend water/sewer at cost of $1 million+
Forest City, North Carolina (Google Data Center)
- 75% property tax reduction for 30 years
- Created 210 jobs but most went to out-of-state hires initially
- Required $2.4 million in road improvements
What We Should Demand
Economic development should benefit our community, not just outside investors:
- Living Wage Guarantees: Commitments to hire locally with training programs
- Fair Tax Treatment: No sweetheart deals that shift burden to residents
- Infrastructure Funding: Developer pays for required upgrades
- Community Benefit Agreements: Binding commitments to schools, parks, and services
- Clawback Provisions: If job targets aren’t met, incentives are returned
The Bottom Line
A 520-acre data center is not equivalent to 520 acres of economic opportunity. We need to evaluate this proposal based on facts, not promises, and ensure any development truly serves our community’s long-term interests.
Want to learn more? Check out our Resources page for links to economic impact studies and official records from similar projects.