Rural towns question data center job promises as builds expand

In short: Data centers are increasingly being built in rural parts of the US, but the long-term jobs they promise often do not show up.

What's going on

Data centers are large buildings filled with computers that store data and run online services, including AI (you can think of them like giant server closets). Developers are pitching these projects to small towns as a way to bring jobs and new tax money.

One example is Jay, Maine, where a former paper mill site is now tied to a proposed $550 million data center. The Androscoggin mill once employed about 1,500 people, but it shut down after a 2020 explosion. The site was bought in 2023 by a joint venture led by developer Tony McDonald, and he says it is now under a resale agreement that could turn the property into a data center.

Maine lawmakers recently passed a bill that would have paused permits for very large data centers for 18 months, so the state could study effects on the power grid, local economies, and the environment. Governor Janet Mills vetoed the bill, pointing to job claims tied to the Jay project, described as 125 to 150 permanent positions.

But economists and watchdog groups say many data centers employ lots of construction workers for a short time, then run with small teams once the building is finished. Economist Michael Hicks studied data center openings across 254 Texas counties and found net long-term job creation was effectively zero. Other examples cited include Microsoft’s Quincy, Washington site, which had hundreds of construction workers but reportedly operates with about 50 full-time employees.

What to watch

Local leaders may focus more on taxes than jobs, since a big facility can add a large taxable property value. The key question is whether towns offer major tax breaks, which could shrink the main financial benefit they might reliably get.

Source: The Verge AI