People, like Ed Morrisey at Hot Air, are wondering how #Donald Trump worked the deal with Carrier that saved the jobs of about 1,000 workers in Indiana. By all accounts it involved the president-elect picking up the phone and making a call to the president of the air conditioner company, kicking off some negotiations that involved Mike Pence, still officially the governor of Indiana. The final deal seems to involve an incentive package more that Trump’s threat to slap a 35 percent tariff on products that are produced by outsourced factories..
What has Trump actually accomplished?
First, by fulfilling a campaign promise to save American jobs from being outsourced even before being sworn in as president, Trump has saved Christmas for a 1,000 registered voters and their families. Each and everyone of them is now the president-elect’s supporters for life Moreover, blue collar workers and their families across the country have sat up and taken notice. The man who will be president didn’t just pay lip service to their concerns. He picked up the phone and did something about it.
Strictly speaking, what Trump did was not following Republican capitalist orthodoxy. But it was smart #politics. The president-elect has just won for himself a voting block that used to belong to the Democrats, who abandoned them for coastal elites who are worried more about environmental enthusiasms than industrial jobs. No doubt what happened at Carrier will be replicated as the corporate tax cuts go into effect and as federal lands are opened up to oil and gas drilling and mining.
Lower taxes and lower energy prices will be a powerful incentive for companies to stay in the United States, balancing out the lower labor costs in Mexico and other developing world countries.
However, outsourcing is not the primary threat to manufacturing jobs. Automation will kill more blue collar jobs than outsourcing ever did. Robots do not call in sick, report to work late, or go on strike. The long term solution will be retraining blue collar workers for some of the creative work that is going to be created as a result of the automation of manufacturing. That process will be longer and more arduous than just picking up the phone and working art of the deal magic.