News that the air conditioning manufacturer Carrier will keep roughly 1,000 jobs in the US instead of moving them to Mexico is certainly a win for President-elect Donald Trump. It’s also a victory for the workers whose jobs were at stake.
But for the manufacturing industry as a whole, which has suffered from massive job cuts in recent decades, the reality is much more complicated.
T.J. Bray, who has worked at Carrier’s Indianapolis factory for 14 years, said he was “shocked and excited” when the news broke that Carrier had agreed to keep some jobs in Indianapolis.
“It seems like a victory for the little people,” Bray, who serves as a media representative for the manufacturer’s United Steelworkers (USW) Local 1999 union, told Business Insider.
However, Bray isn’t quite ready to declare the deal a win yet. While many Carrier employees voted for Trump, Bray and others remain skeptical of his ability to keep his campaign promise to keep jobs from leaving Indiana.
“I’m waiting to see what sacrifices were made,” Bray said Wednesday morning.
As details of the deal emerge, it appears that the state of Indiana and the state’s taxpayers will make the biggest sacrifice. Indiana officials agreed to give Carrier’s parent company United Technologies Corporation $7 million in tax breaks over 10 years to keep jobs in the state, the Wall Street Journal reported.
Of the 1,100 jobs staying in the US, 300 are research and headquarter positions that were never going to move to Mexico, according to the Wall Street Journal. Carrier is still moving 600 jobs from the Indianapolis factory and 700 jobs from the nearby Huntington, Indiana plant to Mexico. About 800 manufacturing jobs will stay in the US as a result of the deal.
Bray said workers have been kept in the dark on the details of the negotiation, finding news on Twitter along with the rest of the world. As news has trickled out, workers have responded with a mix of skepticism and excitement.
“We don’t have any details on how they worked it out. We just know that supposedly he’s saving 1,000 jobs. But what does that really mean? To me it’s not quite clear yet, and even if it is, I’m still not a Trump supporter or a fan,” Carrier worker Donnisha Taylor told the IndyStar. “It’s half and half right now. You’ve got some people that are praising Trump for saving the day, and then you’ve got people who are skeptical. But something is fishy.”
Also worrisome for manufacturing workers is the fact that the Carrier deal fails to indicate how Trump will prevent more jobs from leaving the US.
“This issue that has happened in this country of outsourcing and losing American jobs has been happening for quite a while, and it’s just been escalating,” Bray said.
Carrier acknowledged in a statement Wednesday evening that the deal with Trump doesn’t offer a long-term solution to the effects of globalization.
“This agreement in no way diminishes our belief in the benefits of free trade and that the forces of globalization will continue to require solutions for the long-term competitiveness of the U.S. and of American workers moving forward,” the statement said.
- AP Photo/Nati Harnik, File
Indiana has lost 7,000 manufacturing jobs in the last year alone, the Wall Street Journal reported. Across the US, the number of manufacturing jobs have fallen to 12 million – down from 20 million jobs at its peak in 1979.
“I’ll give Trump his due, but I hope he and the American people and Congress don’t forget about all these other jobs going to Mexico,” Chuck Jones, the president of Local 1999 union, told the New York Times. “Down the pike, a lot more are going to be moving out.”
While campaigning, Trump frequently touted his plan to keep jobs in the US, which involved taxing companies that move jobs out of the US. That strategy seems to have shifted.
In a speech at Carrier’s Indianapolis plant on Thursday, Trump emphasized that cutting federal regulations and corporate taxes were key to keeping jobs in the US.
The biggest thing Bray believes workers want in a new president is a politician who cares about their interests.
“They want to be given a fair chance to make good money and take care of their families, and they want politicians that aren’t going to look for their [own] best interest with all these special interest groups and lobbyists that are infesting Washington and Wall Street,” Bray said. “I think a lot of people are hoping that maybe Trump changes that.”
But the president-elect cannot personally bargain with every factory that threatens to send jobs overseas.
As a result, workers and labor unions have pushed for specific policy changes that they believe could bring manufacturing jobs back to the US. These are bigger-picture changes: reworking trade deals and creating regulation that financially punishes companies that outsource jobs.
“During the campaign, the president-elect spoke out vigorously for the need to bring jobs back home, to invest in domestic manufacturing, take a hard line with trading partners and reform our nation’s failed trade practices. The USW shares those goals,” the United Steelworkers Union said in a statement in support of Trump’s plan to keep the Indianapolis factory open on Wednesday.
One of Trump’s major campaign promises that resonated with manufacturing workers was his promise to rework NAFTA and other trade deals that make it easier and less expensive for companies to move jobs to Mexico.
Additionally, as president, Trump has the ability to advocate for policies that would withdraw military contracts from any company that outsources a certain number of jobs. United Technologies makes roughly $5.6 billion annually, or 10% of its annual sales, from military sales, so it’s likely Trump used that as leverage against the company, according to the New York Times.
“If we start hitting these companies wallets really hard, they may have to think twice on if they will leave or more overseas jobs,” Bray said.
- REUTERS/Bryan Woolston
Sen. Bernie Sanders recently introduced legislation thatwould cut benefits and increase taxes on companies that outsource jobs, as well as ban them from receiving federal contracts, tax breaks, grants, or loans.
Trump won over workers with a similar promise to aggressively tax companies that outsource jobs. But to craft the Carrier deal, Trump and Pence utilized a different strategy that emphasizes tax breaks, instead of tax increases.
This reversal is a major reason that left-leaning politicians, such as Sanders, have come to criticize the deal.
“United Technologies took Trump hostage and won. And that should send a shock wave of fear through all workers across the country,” Sanders wrote in an opinion piece published on Thursday in the Washington Post.
Trump’s pick of Mike Pence as a vice president also signaled that Trump may not take the hardline approach to companies that outsource jobs that he promised while campaigning. As governor, Pence provided $24 million in incentives to 10 companies that outsourced jobs to foreign countries, the IndyStar reported in August.
Carrier provided Trump with a symbolic victory in his promise to bring manufacturing jobs back to the US that required very few actual sacrifices from either the president or the company.
Going forward, Trump isn’t going to be able to handcraft a deal with every single company that plans to outsource jobs. A better tactic, according to critics of the deal as well as some workers, would be to work with Congress to pass policies that actually help keep manufacturing jobs in the US.