Washington, DC, December 1, 2016 — Good Jobs First executive director Greg LeRoy issued the following statement today regarding the announcement by President-elect Donald J. Trump that Carrier Corp. will retain some jobs in Indiana:
“As someone who became an accidental student of economic development incentives while creating a consulting practice against plant closings starting 32 years ago, I applaud this and every effort to save U.S. manufacturing jobs.
“However, nothing yet known about the subsidy deal assembled by Indiana Governor and Vice President-elect Mike Pence suggests that this case offers any systemic solution to the decades-long decline in U.S. manufacturing. Nothing about this deal challenges the longstanding elite consensus in America that capital is free to move: offshore, across town, or across a state line, with workers and their communities left behind to suffer declining living standards.
“I applaud former Indiana Lt. Gov. John Mutz for his candor to Politico, in which he indicates that Trump and Pence employed the leverage of Defense Department contracts with Carrier’s parent company, United Technologies, to save some of the jobs that had been slated to move to Mexico. Otherwise an incentive package worth $700,000 per year could never outweigh $65 million in annual savings the company projected it would save by moving.
“Doing a one-off on a shutdown that happened to be announced during the primary campaign season is not a systemic solution to offshore job flight. Nor is Trump’s proposal to cut the corporate income tax rate. Indeed, as Citizens for Tax Justice has documented, for a recent five-year period in which United Technologies was profitable every year, it paid an average rate of just 11 percent in federal income tax-less than a third of the often-cited but seldom-paid 35 percent statutory rate. Last year, it paid just 9.4 percent.
“To those who have argued that Carrier’s behavior could inspire ‘job blackmail’ behavior by other companies, the fact is job blackmail is a long-established, deeply entrenched practice in economic development in America. It says everything about how corporate-dominated economic development in America has become.
“Thanks to Mutz’s candor, we apparently have some credible information about why United Technologies is partially changing course. But officially, as always, we taxpayers will never have access to the corporate decision-making black box. We’ll be forced to take whatever the company says at face value. Of course, the standard script calls for the company to praise the politicians and claim the tax breaks actually mattered, so that the politicians can appear active on jobs. As the recipient of more than 800 federal, state and local subsidy awards worth more than $880 million, United Technologies knows the drill.
“While I congratulate those fortunate workers whose jobs will be retained, I hope no one will mistake this episode as any kind of policy breakthrough. By swapping taxpayer dollars for political favors, this Carrier deal is very much business as usual.”
LeRoy also refers the media to a blog he wrote in September praising an Indianapolis Star investigation that revealed the Pence administration gave tax breaks to numerous companies that have offshored jobs. LeRoy also sets out specific ways the State of Indiana could challenge capital flight if it actually intended to.
Good Jobs First is a non-profit, non-partisan watchdog group on economic development incentives. Founded by Greg LeRoy in 1998, it is based in Washington, DC. Greg is the author of No More Candy Store and The Great American Jobs Scam.
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