The big news today is that Donald Trump and Mike Pence negotiated a deal with United Technologies (owner of the big air-conditioner company Carrier) to keep 1000 of the 2,000 Indiana-based jobs that were slated to be moved to Mexico. Of course, the terms of the deal were not announced (and possibly will never be). That said, it is likely Trump promised Carrier management tax breaks and incentives and other perks to keep 50% of the announced jobs in the US (why not all of them?).
While Trump supporters may see this as fulfillment of a campaign promise made by the Donald, it is nothing more than a PR stunt to suggest that Trump is able to keep jobs in the US and not move jobs to lower cost manufacturing markets like Mexico, Vietnam, Malaysia, Bangladesh, Indonesia and others. Notice that I did not mention China in the list of lower cost manufacturing destinations. That’s because, over the past 10 years, labor and manufacturing costs have skyrocketed in China and manufacturing there no longer makes fiscal or economic sense. Anyway, the Carrier story will be used to show that Trump unlike President Obama is able to stem or reverse the loss of US manufacturing jobs to foreign countries.
The reason for the post is twofold. First, most of the manufacturing jobs in the US have already been lost and they will not be coming back home anytime soon.This is because moving these jobs to lower cost markets has increased corporate profits and elevate public company stock prices. Nevertheless, it is important to note that over 200,000 US pharmaceutical manufacturing, marketing and sales jobs have been lost since 2001 because of outsourcing to lower cost foreign markets. Despite bleeding job losses, neither the Bush nor Obama administrations directly intervened to keep these jobs in the US. Both Bush and Obama likely believed that the US government ought not meddle with or tell private companies how to run their businesses.
Second, despite all of the hoopla, Trump/Pence were only able to save 50% of the 2000 jobs slated to be moved to Mexico. And, putting things in perspective saving 1,0000 “blue collar” jobs is peanuts as compared with the lost of over 200,000 pharmaceutical and life sciences jobs. While saving 1,000 Indiana jobs may seem like a “win” for Trump supporters, I think the whole deal was really designed to distract said supports from other campaign promises that Trump has failed to live up to. For example, his decision to not investigate and possibly jail Hillary Clinton, his appointment of Washington lobbyists and Wall Street insiders to cabinet posts and advisory positions (whatever happened to “cleaning out the swamp?) and considering Mitt Romney for Secretary of State.
Finally, in my opinion, Trump’s personal involvement in negotiations with private companies sets a dangerous precedent because the Executive branch ought not be able to directly manipulate or negotiate private business transactions. To that point, I believe that oversight of US corporate transactions and business deals are best left to regulatory agencies like the Federal Trade Commission and the Justice Department rather than President of the US. That said, President-elect Trump ought to be focused on running the US government; not negotiating business deals with private US corporations.
Until next time,
Good luck and Good Job Hunting!!!!!!