When The Boeing Company considered relocating work to Oklahoma from other areas of the nation, the cost of doing business played a key role in why Oklahoma was chosen. Steve Hendrickson, director of government relations for The Boeing Company, said Oklahoma’s cost-competitive climate was a draw, but the Oklahoma Quality Jobs Program may have been the cherry on top.
The Oklahoma Quality Jobs Program is a successful incentive program offered through the state that targets manufacturers and certain service industries that have an annual new payroll investment of $2.5 million or more.
The Quality Jobs Programs allows qualifying companies to receive a quarterly cash payment of up to 5 percent of new taxable payroll. A lower payroll amount is available for certain food processing and research and development projects. Companies with 10 percent of their workforce as veterans qualify for a higher 6 percent net benefit rate.
“Boeing supports the mission of our Department of Defense customers, who usually issue ‘firm fixed price’ contracts. In the case where these contracts are being performed in relatively high cost areas of the country, the Oklahoma Quality Jobs Program was a significant contributing factor in closing the business case to relocate the work to Oklahoma in order to reduce costs to our customers,” said Hendrickson. “The cost competitive nature of these public-private partnerships, along with the availability of the highly trained workforce, combined to make the decision to move additional work to Oklahoma.”
In 2015, Boeing’s decision to bring nearly 1,000 jobs to Oklahoma City qualified the company for up to $91.8 million in state incentives over the next decade, according to the Oklahoma Department of Commerce. In addition, Boeing was positioned to receive $76.6 million over the next 10 years by adding 574 high-paying jobs in Oklahoma City under the 21st Century Quality Jobs program, an expansion of the Quality Jobs program that was approved in 2009.
For Oklahoma, the investment in the Quality Jobs Program has paid off with thousands of new, high-wage jobs. In January 2017, four other companies qualified for Oklahoma’s Quality Jobs Program, creating nearly 570 new jobs. Charles Kimbrough, Director of Business Development for the Oklahoma Department of Commerce, said Quality Jobs encourages Oklahoma businesses to employ more people and employ them at higher than average wages.
It’s a win-win for the state and the companies that utilize it,” he said. “Since companies are required to pay wages that meet or exceed the average for the county, we can ensure that Oklahomans have access to good, high-paying jobs. It also led to a ‘spinoff’ incentive — 21st Century Quality Jobs — which rewards companies that pay 300 percent of the average state wages. Today, that means those jobs pay more than $85,000 annually.”
Oklahoma’s 21st Century Quality Jobs offers incentives to businesses with a highly skilled, knowledge-based workforce. For qualifying companies, this unique incentive would pay businesses cash back — up to 10 percent of payroll, for up to 10 years — for the creation of at least 10 jobs with an average wage of $97,341 or higher, depending on the county.
“Companies that qualify for 21st Century Quality Jobs are in what we typically call growth industries — research and development, technology, financial services, etc. — which means that we go even beyond offering more jobs at higher wages. We are diversifying and strengthening the state’s economy,” said Kimbrough. “These programs encourage job growth, but more than that, it encourages good job growth. It is also a very measurable incentive so we can make sure that it’s a good thing for Oklahoma as well as the company that benefits.”
Kimbrough said the benefit of the program to citizens in Oklahoma is the potential for a higher quality of life, thanks to growth in the economy.
“Quality Jobs encourages companies to grow and expand in Oklahoma which in turn opens the door for more companies to choose the state,” he said.
As a company’s Oklahoma operation grows, then Oklahoma is more likely to see the expansion of a company in their supply chain to the state.
“We like to think that growth begets growth. A company grows in Oklahoma which means more jobs for Oklahomans and the opportunity for increased income potential and a higher quality of life,” he said.
The Quality Jobs Program continues to be a key driver in Oklahoma’s economic development efforts, and the program is touted by site selectors nationwide.
“When you combine it with the other benefits Oklahoma offers overall low cost of doing business, low cost of living and access to workforce and training,” Kimbrough said. “It really helps us sell the case for why a business should choose Oklahoma over other locations.”