Trump’s Carrier Deal: What’s The Catch?

By: Ryan Erickson

President-Elect Donald Trump wasted no time touting a “deal” with the manufacturer Carrier, which had previously announced a plan to shift 2,000 factory jobs at its Indianapolis plant to Mexico. This deal will allegedly keep “close to 1,000 jobs” in Indianapolis in a move that the media is hailing as an early “victory” for Trump. On Thursday he’ll head to Indianapolis to celebrate the deal with Vice-President-Elect and current Indiana Governor Mike Pence.

But as with everything else, the devil is most definitely in the details. What exactly did Trump do get his vaunted deal with Carrier? Before Trump can notch this one as a win, we need answers to three key questions.

  • How long are these jobs staying in Indianapolis? Did Trump score a commitment from Carrier to keep the jobs in Indiana for a long time? It isn’t hard to imagine that Carrier, seeking to avoid a barrage of negative publicity from the world’s most infamous tweeter, committed to keeping some jobs in Indiana for a short period of time but will turn around and send the jobs away once the pressure is off. Trump could even be playing along, content to let Carrier send the jobs away down the line, and quietly, having made hay out of the earlier deal. Don’t think companies abandon their promises like this? Consider Boeing, which received a massive tax incentive package from the State of Washington — the biggest the state has even given out to a single company — only to announce less than a year later that it would send about 2,000 jobs to facilities in St. Louis and Oklahoma City.
  • How much are Indiana taxpayers shelling out to keep these jobs? Did Carrier get a payment in the form of a tax incentive or some other way to keep these jobs in Indiana? If so, how much was it and what is the hit to the state’s taxpayers? While this isn’t a new strategy — in fact, governors, state legislatures, and city officials frequently broker deals where they trade payments to corporations or targeted industries to get them to create or keep jobs in their states — it’s an exceedingly terrible one. A 2012 investigation by the New York Times into state and local tax incentives to companies found that states, counties, and cities are giving up $80 billion per year to companies in an attempt to lure them to or keep them in their respective locales. Another report by Good Jobs First also found that these incentives are seldom evaluated for effectiveness, and in plenty of examples these incentives failed to deliver on the job growth or creation promises that the incentives’ supporters guaranteed would result from the deals. That same report found that big corporations and not small businesses benefit the most from these deals. Further, did Trump promise to slash a regulation at Carrier’s request in order to get the deal? Before anyone can celebrate anything, we need to know what the cost of Trump’s deal was to Hoosiers and all Americans.
  • How many jobs are going overseas? Carrier has committed to keeping “close to 1,000 jobs” in Indianapolis, but how many is the manufacturer, a subsidiary of United Technologies Corporation, still sending overseas? Less than 1,000 is a lot less than the 2,000 jobs they company initially said it was preparing to send to Mexico. What’s the final count? And will the company move jobs from other plants it has in the U.S., in a state that is not currently headed by Trump’s running mate, to Mexico?

Despite his big talk on the campaign, it isn’t hard to find evidence that Trump is not looking out for the workers he claims brought him to victory. On taxes, benefits, and collective bargaining, Trump has proven he is no friend at all to workers, and that he is much more likely to deliver a sweetheart deal to corporations than to help these workers out. So before he or anyone else busts out the champagne, let’s find out what Trump actually promised.

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Hard-hitting news + analysis paired with action on the issues that matter most. Working alongside @AmProg.

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