Saving jobs one corporate bribe at a time?

December 8, 2016

Danny Katch untangles the facts from the fiction in Donald Trump's deal with Carrier.

LAST WEEK, Donald Trump announced that he was personally responsible for righting a wrong that had, during his presidential campaign, become a symbol of the worsening plight of blue-collar workers in the U.S.: mass layoffs of Carrier workers whose Indianapolis air conditioner factory was closing down, with the work being relocated to Mexico.

Trump claimed that he saved the jobs through his mastery of the "art of the deal." Vice President-elect Mike Pence, still governor of Indiana, offered Carrier the carrot of $7 million in tax breaks and other incentives, while Trump reportedly brandished the stick of future "consequences"--perhaps tariffs or a loss of military contracts for Carrier's parent company United Technologies--should the company go ahead with its relocation plans.

Another factor, according to company CEO Gregory Hayes, was that his conversation with Trump gave him "a renewed confidence in the future of manufacturing" inside the U.S.

As for Carrier workers, they were elated. "We're so excited," one worker, wearing a Trump cap, said to a Washington Post reporter. "I'm just a common Joe guy working here in Indianapolis. And this man isn't even in office yet and he has saved my job from going to Mexico. If he can do this and not even in office yet, what's he going to do for our country? Make America Great Again. That's what it's going to be all about."

Donald Trump addresses reporters at a Carrier plant in Indianapolis
Donald Trump addresses reporters at a Carrier plant in Indianapolis

IF ALL this sounds too good to be true, that's because it is. As is always the case where Trump is involved, there's a lot of hyperbole and bluster that needs to be separated from the facts.

A few days after Trump's triumphant announcement, Carrier worker and United Steelworkers (USW) representative T.J. Bray reported, "We found out today that more jobs are leaving than what we originally thought. It seemed was 1,100 [jobs saved], then it was maybe 900, and now we're at 700. So I'm hoping it doesn't go any lower than that."

Carrier is only keeping 730 factory jobs in Indianapolis, along with 70 salaried positions. The company is still planning to relocate 550 jobs in Mexico and close its entire factory in nearby Huntington.

WTHR in Indianapolis reported that Trump's claim of saving 1,000 jobs included "350 research and development jobs that were never going to move to Mexico in the first place. Those were jobs that Carrier said all along would stay in Indianapolis."

Beyond the number of jobs is the matter of how Trump negotiated to save some of them. As Bernie Sanders wrote in a Washington Post opinion article:

Just a short few months ago, Trump was pledging to force United Technologies to "pay a damn tax." He was insisting on very steep tariffs for companies like Carrier that left the United States and wanted to sell their foreign-made products back in the United States. Instead of a damn tax, the company will be rewarded with a damn tax cut. Wow! How's that for standing up to corporate greed? How's that for punishing corporations that shut down in the United States and move abroad?

In essence, United Technologies took Trump hostage and won. And that should send a shock wave of fear through all workers across the country.

Or as MSNBC's Steve Benen summarized: "Trump is directing $7 million to a company that's sending more jobs to Mexico than it's keeping in the U.S.; he's relying on the opposite policy he promised to pursue as a candidate; and he's exaggerating the number of saved jobs."

Benen ended by asking sarcastically: "This is the president-elect's big public-relations triumph?"

But unfortunately, the answer is yes. It's actually a pretty big public relations triumph, and it shows that Trump has the potential to use his skills for dramatic symbolic gestures and blatant lying to increase his support among working people--if the labor movement doesn't show that unions can offer a better way forward by fighting the bosses instead of bribing them.

AS HE did during the campaign, Trump has shown over the past few weeks that he is a master at manipulating the news cycle, whether through an outrageous tweet or a highly publicized "feud" with a multinational corporation like United Technologies.

The president-elect is making fresh headlines this week with his tweeted threats to cancel Boeing's contract to supply new Air Force One planes for costing too much. It was pure coincidence that the threats came minutes after the publication of a Chicago Tribune article in which the Boeing's CEO recommended that Trump "back off" his criticisms of trade with China.

The prospect of a U.S. president using his position to reward supporters and punish enemies in Corporate America--or, as Pence put it more diplomatically, make decisions about different companies "on a day-by-day basis"--is one of the things that made most of the ruling class establishment nervous about Trump during the campaign season.

His promise to punish companies that outsource jobs, which the Washington Post noted would mark "an unusual level of intervention by the White House into private enterprise," has met with resistance in some conservative quarters, including Trump's fellow right-wing populist Sarah Palin, who blasted the Carrier deal as "crony capitalism."

But these complaints are out of step with Republican Party voters, who are more opposed to free trade agreements than Democratic voters, according to a recent Pew poll.

In any case, Trump is planning to win over his free-market detractors in the ruling class the old-fashioned way--with massive cuts in taxes on corporations and the wealthy. That, of course, will mean even less money for public schools and transportation--which Trump's cabinet picks Betsy DeVos and Elaine Chao intend to privatize anyway.

Trump's overall economic plan is a massive upward transfer of wealth--the biggest score by far for a lifelong con artist. Given that he is the most unpopular winner of a presidential election in memory, he shouldn't be able to get away with it.

But the problem is that wealth was already being sucked upward during the Obama years--an astounding 95 percent of gains in income between 2009 and 2013 went to the richest 1 percent of households. And leading Democrats, from Obama to the Clintons, earned a reputation for caring far more about Wall Street and Silicon Valley than the blue-collar union workers who historically formed a main voting base for the party.

Compared to Obama's determination to deliver nothing on his liberal campaign promises--remember when it took him two full years just to repeal the wildly unpopular ban on LGBT soldiers in the military, and his aides lamely said it was because "he had a lot on his plate"?--even the shabby deal with Carrier that Trump managed can look like an impressive feat of political will.

MEANWHILE, BERNIE Sanders is putting himself forward as a leader who can compete with Trump by restoring the Democratic Party's always undeserved pro-worker reputation. Unfortunately, Sanders is planning to counter Trump's conservative economic nationalism with liberal economic nationalism.

Sanders is putting forward a bill that would punish companies that outsource jobs by denying them federal contracts and banning them from offering large bonuses to corporate executives. That might seem better than rewarding companies with tax breaks, but it's still not identifying the main culprits of job losses in the U.S.

The decline in high-wage jobs in the U.S. isn't mainly due to outsourcing to other countries, but to automation and union busting. The problem isn't international trade, but how that trade is used as one of many tools for corporations to lower wages and increase profits. As Lance Selfa wrote earlier this year for about the North American Free Trade Agreement (NAFTA):

Even after NAFTA went into effect in late 1993, employment in U.S. auto parts and manufacturing increased from 1.1 million to 1.3 million by 2000. The number of jobs then dropped to about 1 million by 2005-06--before falling off a cliff in the onset of the 2007-08 Great Recession. Employment in this sector hit bottom at around 623,000 in mid-2009, before the Obama administration's auto bailout plan and the onset of an office recovery. Auto parts and manufacturing now employs about 925,000, about 50,000 workers below January 1990 figures, according to the Bureau of Labor Statistics.

These figures don't mean that NAFTA had no effect on the jobs and conditions of U.S. autoworkers. But it is clear that auto employment didn't simply take a one-way nosedive from the moment NAFTA was passed.

What else was involved? Anyone who has followed SW's coverage of the auto industry during this period knows that it has been one of declining union membership, speedup, two-tiered wages and greater subcontracting across North America. In 2009, the Obama administration's bailout plan for the industry tore up union contracts, enforced two-tiered wages and required the surrender of a generation's worth of work rules. It was the U.S. government under a Democratic Party president that demanded these concessions, not the Mexican or Canadian governments.

THE PROBLEM with the protectionist measures that Sanders and other pro-union lawmakers support isn't just that they fail to preserve good jobs. They also reinforce Trump's "America first" argument, at a time when we urgently need to revive the socialist idea that the workers of the world need to unite and fight.

It may sound like a far-fetched slogan, but it's quite real. When Verizon workers went on strike this spring, they received solidarity from call-center workers in the Philippines, where some of their work was being outsourced. The way forward for workers facing threats to their jobs is to take on the company the way Verizon workers did.

During the last presidential transition period eight years ago, there was another factory that was scheduled to close down.

Republic Windows & Doors planned to close its unionized factory in Chicago and open a nonunion plant in Iowa. But those plans were thwarted when the workers, members of United Electrical, Radio and Machine Workers (UE) Local 1110, occupied the factory. They won enthusiastic solidarity from the local and national labor movement, especially among rank-and-file workers looking for an alternative to union inaction.

The Republic workers won that round of the fight--and it wasn't the president-elect's deal-making that saved their jobs, it was union power.

Contrast that to the United Steelworkers' response at the factory closure threat at Carrier: circulating an online petition.

If the labor movement isn't prepared for a more militant fight for jobs than that, then unions will continue to lose members to layoffs--and more working-class people will move toward the deadly embrace of the Trump con job.

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