Is the Carrier jobs deal all it’s cracked up to be? USW cautiously says ‘Yes,’ but union-backed Good Jobs First says ‘Wait a minute’

INDIANAPOLIS—Is the Carrier jobs deal, brokered by Republican President-elect Donald Trump and his Vice-president elect, Indiana Gov. Mike Pence, all it’s cracked up to be? The Steelworkers, who represent the employees at the Indianapolis plant, cautiously say yes. But in the larger scheme of things, union-backed Good Jobs First is more dubious.

Meanwhile, Chuck Jones, president of Steelworkers Local 1999, which represents the Carrier workers, corrected Trump’s jobs figures and said the president-elect was “lying his ass off” about the number of jobs saved. That earned Jones a tweeted denunciation from Trump, and the accusation that if the local “was any good” the jobs would have been saved before.

The basics of the deal, announced Dec. 1, are that Carrier, a subsidiary of United Technologies, will keep 800 factory jobs in Indianapolis, rather than shutting the plant and moving those jobs, along with 600 others, to Mexico. In return Indiana provided Carrier a $7 million package of state and federal tax incentives. UT is a major defense contractor.

“The dedicated USW members in Indianapolis who build quality heating equipment for Carrier deserve credit for bringing the union’s fight to save their jobs to the attention of the nation during the 2016 presidential campaign,” said USW President Leo Gerard.

“The details are yet to be known, but America needs good-paying, family-sustaining jobs. We thank President-elect Trump for listening to our members and following through on his campaign pledge to persuade Carrier to keep production of quality heating equipment in Indianapolis,” he added.

USW District Director Mike Millsap noted the first candidate to raise the Carrier case to national prominence and “keep it on the front burner” was not Trump, but Sen. Bernie Sanders, Ind.-Vt., who finished second to former Secretary of State Hillary Rodham Clinton for the Democratic presidential nomination. She lost the electoral vote to Trump, who carried Indiana.

Union Vice President Tom Conway added that Trump, like USW, opposes unfair trade pacts and the export of U.S. factory jobs to low-wage low-standard nations. So does Sanders. The USW leads the nation in bringing unfair trade practices cases to U.S. officials.

“America’s manufacturing sector was once the path to middle class prosperity and has been the envy of the world. But, for too long, it has had to compete against unfair trade prac-tices and flawed trade policies that have promoted outsourcing and offshoring,” Conway said.

But the $7 million tax break and the encouragement it could give to other U.S. firms to hold states hostage in return for staying in the country raised a red flag for Greg LeRoy, executive director of Good Jobs First, which analyzes government subsidies to companies.

“The deal appears to be a one-off tied to United Technologies’ defense contracting, not a policy breakthrough or systemic solution for manufacturing jobs,” LeRoy said. Aid to Carrier could be “causing confusion about when ‘job blackmail’ typically happens. I am also concerned that President-elect Trump indicated support for the ruinous ‘economic war among the states.’”

LeRoy said corporate economic blackmail to get more such tax breaks is unlikely, as taxes account for only two percent of a typical company’s costs. “Tiny changes” in larger costs, including raw materials and executive pay, play greater roles in firms’ stay-or-move decisions.

“This is also the reason why ‘job blackmail’ is almost always an issue among states, or within states, not between the U.S. and foreign locations,” LeRoy noted, before saying Trump appears to be “endorsing the ruinous, corrosive economic war among the states, aka interstate job piracy…We’ve never to my knowledge had a president who endorsed companies whipsawing states against each other.

“Given the nationalist economic frame that President-elect Trump emphasized during his campaign, I would hope that on the domestic front, that would translate into a message that says: ‘All states are in this fight together for good American jobs; We’re not going to let states keep wasting taxpayer dollars stealing jobs from each other. We’re on the same team, right?’”

Source: PAI