To the workers at Carrier who will keep their jobs, the Trump/Pence deal to persuade Carrier to export fewer jobs away from Indiana is big and good news. In the larger scheme of things, however, this is mostly political theater. During the campaign, Carrier’s exit became symbolic of a larger problem – the loss of blue collar, manufacturing jobs that paid well. The deal addresses, to some extent, the symbol but is probably a drop in the bucket in terms of the real issue.
The Wall Street Journal is reporting that Indiana officials have agreed to give United Technologies $7 million in tax breaks over a decade.
United Technologies will invest roughly $16 million in its Indiana facilities, according to the Wall Street Journal.
The deal would save 800 jobs from the Indianapolis furnace plant and 300 research and development positions that were not going to go to Mexico, the Wall Street Journal reported.
The media coverage of Carrier’s exit and now its coverage of this deal is probably out sized. Trump and his supporters will crow about how he’s delivering on promises. Trump’s detractors will complain that the incentives create a moral hazard for companies to reap financial incentives by threatening to move their companies (not unlike what sports franchise owners do with stadium deals, it occurs to me.) Both sides will (probably with justification) accuse the other of hypocrisy.
Around and around we go.
“Trump cures cancer”
After researching this, thanks to Trump the number of poor will continue to increase as they are the ones with the highest mortality rate from cancer.
Plus he only did it to show how health care isn’t necessary in the first place.
Let’s take a practical look about what Indiana, not the Federal govt is giving to maintain 50% of projected jobs that would have been lost. Hoosier direct costs are projected $7m over 5 years. That is over $6,500 per job plus whatever tax revenue was lost on the 1,300 jobs that are leaving *(at $31.91 per hour and IN tax on that around 3.19% est $2.5m per year in perpetuity).
My honest question is could we have spent that money in other job gaining initiatives, and gained way more than 214 jobs a year over 5 years, and took much harder line with Carrier (*the parent company United Technologies). United Tech has $9.5 billion real dollars on the line in 2017 alone. Hoosiers are footing this bill, and from a deals perspective this one stinks. Especially when investing $1 in pre-k can save $7 back in gains back to govt. I think priorities are clear, and not in Hoosiers best interests. Our state officials and future president are short sighted, and would rather invest in bad deals with business than in investing in programs that can benefit us all in a deeper way for a longer period of time.
Reference:
http://wishtv.com/2016/11/30/why-government-contracts-mean-so-much-to-carriers-parent-company/
https://www.usaspending.gov/transparency/Pages/RecipientProfile.aspx?DUNSNumber=001447952&FiscalYear=2017
https://smartasset.com/taxes/indiana-tax-calculator
http://www.ncsl.org/research/human-services/new-research-early-education-as-economic-investme.aspx
More than 50% of the jobs are lost. Carrier announced (originally) they were moving 2100 jobs to Mexico. The 300 or so headquarters and R&D jobs were never leaving but they’ve now been included in the math.
Of those 2100 jobs in Indiana that were leaving, roughly 700-800 are staying. I also understand that around 75% of the workers made $26 an hour and 25% made $14 an hour. Will be interesting to see the wage mix for those remaining jobs.
It’s a PR stunt by a man in Mike Pence who many people forgot was actually still the governor. Without his ability to open the wallet wider, I doubt the deal happens. But for those who kept their jobs, I feel glad for them.
Christopher Hamm said: “Especially when investing $1 in pre-k can save $7 back in gains back to govt.” Actually the scientific studies (as opposed to the ones done by those who profit off pre-K) of pre-k show no such return or any positive return for that matter. The Head Start study (actually two of them were done) by the federal government and a recent study out of Tennessee show that pre-k simply offers temporary improvement and than non-pre K students quickly catch up. Even the liberal Brookings Institute concluded after examining pre-K programs that they don’t offer long-term benefits. As far as non-educational benefits claimed by pre-K advocates (such as reduced crime,) there is zero studies that support those claims.
Sorry to digress from the topic at hand, Doug. I’ve written a lot about pre-K and when I see claims like this it’s like nails on a chalkboard.