On Thursday, President-elect Donald Trump traveled to the Carrier factory in Indianapolis, Indiana to tout the deal he helped orchestrate to keep about 800 manufacturing jobs in the United States in exchange for state and federal incentives, including $7 million from Indiana.
“Companies are not going to leave the United States anymore without consequences. Not going to happen. It’s not going to happen, I’ll tell you right now,” Trump said during a speech at the factory.
What Trump didn’t mention, either then or during a subsequent “thank you” rally later Thursday in Cincinnati, is that the deal he and Vice President-elect Mike Pence helped broker won’t prevent Carrier from outsourcing more jobs than are being saved in Indiana. The company will keep about 800 jobs at the Indianapolis plant, but will still move 600 jobs from Indianapolis to Mexico. Another 700 jobs are being moved to Mexico from a separate factory in Huntington, Indiana, which will be closed.
In sum, about 800 American jobs are being saved, but another 1,300 are disappearing. Those painful details were acknowledged in a letter Carrier sent to affected workers on Thursday that was posted to Twitter by Indianapolis-based journalist Rafael Sánchez.
Trump’s deal with United Technology, the company that owns Carrier, is good news for the workers who will keep their jobs, of course. But doling out huge tax breaks and other incentives to entice companies to keep jobs in the United States is bad economics, as Trump himself acknowledged on the campaign trail when he denounced government officials for believing that providing economic incentives to corporations keeps jobs in the United States.
During a Thursday appearance on CNBC, conservative economic policy analyst Jimmy Pethokoukis went so far as to call Trump’s speech at the Carrier plant “absolutely the worst speech” about economics in more than 30 years.
“The idea that American corporations are going to have to make business decisions, not based on the fact that we’ve created an ideal environment for economic growth in the United States, but out of fear of punitive actions based on who knows what criteria exactly from a presidential administration,” Pethokoukis, a scholar with the conservative-leaning American Enterprise Institute, said. “I think that’s absolutely chilling.”
On Friday, the latest jobs numbers reinforced that Trump’s Carrier deal comes amid a long-term downturn in manufacturing jobs in the country. While a net 178,000 private and public positions were added in November and the unemployment rate fell to 4.6 percent, the lowest since August 2007, manufacturing jobs fell by 4,000. For the year, manufacturing jobs across the country have fallen by 78,000.
“Outsourcing is the smoking gun of the rigged economy.”
— Robert Kraig, Executive Director of Citizen Action of Wisconsin.
Companies extort tax breaks and subsidies by threatening to withhold jobs. After their demands are met, they instead outsource the promised jobs. For the workers who remain, the threat of outsourcing causes their wages to fall. As Donald Trump said, if companies outsource jobs to places where workers make less, then “… you’ll come back … because those guys are going to want their jobs back even if it is less.”
But lately people have been figuring out ways to start doing something about these kinds of things. People are organizing to build power, making noise that the public and elected officials can hear and making clear demands that force politicians answer the question, “Whose side are you on?”
Wisconsin’s Privatized Economic Development Corporation (WEDC)
One group organizing people and forcing public officials to declare whose side they are on is Citizen Action of Wisconsin, a People’s Action affiliate. They are an “issue focused coalition of individuals and organizations committed to achieving social, economic, and environmental justice.” Citizen Action of Wisconsin is taking on the Republican Scott Walker administration over their privatization and use of the state’s “jobs agency” Wisconsin Economic Development Corporation (WEDC) to subsidize corporations even as they move jobs out of the state.
… In July 2011, WEDC was launched “with the mission of elevating Wisconsin’s economy to be the best in the world.” The quasi-public agency is run by a 15-person board chaired by the governor.
The agency was soon caught up in controversy. In July 2012, allegations of bid-rigging forced it to cancel a planned award to an information systems company. In October the Milwaukee Journal Sentinel reported WEDC had lost track of some $8 million in funds. In May, WEDC was slammed by the federal Department of Housing and Urban Development for misappropriating $10 million in federal funds.
In May 2013, the Wisconsin Legislative Audit Bureau found that WEDC had awarded a portion of these grants, loans and tax credits to ineligible recipients, for ineligible projects and for amounts that exceeded specified limits.
WEDC controls an extraordinary amount of taxpayer funds. In fiscal year 2011-12 alone, Walker’s WEDC administered “30 economic development programs through which it authorized local governments to issue $346.4 million in bonds, awarded $41.3 million in grants and $20.5 million in loans, and provided $110.8 million in tax credits to businesses and individuals,” says the audit bureau.
With all that taxpayer money, how many actual jobs have been created?
The answer, in 2014, was, “Two official state data sets indicate that for every verifiable job Walker’s WEDC managed to create, the state lost more than two to plant closings and layoffs.” Then 2015 audit found that the problems had only gotten worse.
In response to a series of outsourcing scandals Governor Walker’s troubled jobs agency, the Wisconsin Economic Development Corporation (WEDC), adopted in 2014 a 30 day advanced notification policy. This policy is supposed to give state policymakers early warning if a corporation receiving state economic dollars plans to outsource jobs or downsize more jobs than they are paid to create.
An open records request by Citizen Action of Wisconsin found that despite a series of additional incidents of WEDC funded corporations outsourcing Wisconsin jobs, there are zero 30 day notifications in WEDC’s files.
Data kept by the U.S. Department of Labor shows that at least 11,331 Wisconsin workers have had their jobs outsourced to other countries since Governor Walker’s scandal ridden jobs agency, the Wisconsin Economic Development Corporation (WEDC), was launched July 1, 2011. This is a very low-end estimate of the impact of outsourcing in Wisconsin because it only accounts for groups of workers who successfully applied for Trade Adjustment Assistance from the federal government by proving their jobs were eliminated because of global trade agreements. It does not account for outsourcing to other states, or downsizing where it is not possible to prove the jobs landed in a foreign country or were impacted by global trade deals.
Both Governor Scott Walker and U.S. Senator Ron Johnson have consistently supported a rigged economic system which allows multinational corporations to pit Wisconsin workers against low-wage foreign workers.
Citizen Action of Wisconsin reviewed a database on the Wisconsin Economic Development Corporation website and found the agency reported supporting and investing in the creation of 483 jobs in Sherman Park located on the city’s north side. When the nonprofit researched the companies adding those jobs, it found the companies to be located outside Milwaukee.
Summary: Republicans privatized the state economic development agency, awarded subsidies to companies that included campaign donors, stripped safeguards, and “lost track” of where millions of taxpayer dollars went. Meanwhile, companies receiving subsidies intended to create jobs in Wisconsin were actually shipping jobs out of the state and country, as part of an effort to pit state workers against low-wage workers and force down wages. WEDC aided that effort by misrepresenting the jobs numbers, and even reporting nonexistent job-creation.
Outsourced Wisconsin Tour
In response Citizen Action of Wisconsin has launched what they call the “Outsourced Wisconsin Tour” to “focus attention on corporate outsourcers who are taking public job creation dollars.”
Following last week’s revelation that over 11,000 Wisconsin jobs have been outsourced in the past five years, advocates for good jobs launched a statewide tour on Thursday of corporations who are outsourcing while taking public job creation dollars.
The first company on the tour is the Rexnord Corporation in Milwaukee:
At a news event today community leaders detailed how Rexnord outsourced Wisconsin jobs at the same time it took millions in public job creation dollars from Governor Walker’s scandal plagued Wisconsin Economic Development Corporation (WEDC).
[. . .] According to data from the U.S. Department of Labor and WEDC, Rexnord has actually outsourced more jobs than it has been paid with public dollars to create. The company has received $2.75 million in WEDC funds, but has so far outsourced 130 more jobs than it is has created.
“The Smoking Gun Of The Rigged Economy”
Robert Kraig, Executive Director of Citizen Action of Wisconsin explained the reason for the tour.
“Outsourcing is the smoking gun of the rigged economy. It would stun most Wisconsin workers to learn that state leaders are aiding and abetting economic treason by giving public dollars to corporations who are outsourcing more jobs than they create. It’s long overdue for federal and state government to side with workers by using it leverage to build an economy where everyone who wants a good job can get one.”
You can join their effort to end outsourcing, and say, “Enough!”
“With so many Wisconsin workers struggling to find family supporting jobs, our state and federal governments ought to be focused on creating an economy where everyone who wants a good job can get one. Shamefully, elected leaders who are supposed to work for us often aid and abet corporate outsourcers, helping them rig the economy against average people. They vote for trade deals which make it easier for multinational corporations to ship more of our good jobs overseas. In Wisconsin Scott Walker gives huge subsidies and tax giveaways to unpatriotic CEOs engaged in outsourcing our jobs.”
This post originally appeared on ourfuture.org on September 12, 2016. Reprinted with Permission.
Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.
The huge crowd outside the Verizon Center in downtown Washington, D.C., Saturday wasn’t there for a basketball game or concert. They came to tell Verizon to stop its attack on middle-class jobs.
The Verizon Center demonstration and dozens and dozens of other actions at Verizon worksites and Verizon Wireless stores are part of the growing support for the 45,000 Communications Workers of America (CWA) and Electrical Workers (IBEW) members forced on strike by Verizon Aug. 6.
The company, with $32.5 billion in revenue in the past three years, is demanding $1 billion in concessions from workers, which amounts to $20,000 per Verizon worker per year. While talks resumed last week, those demands remain on the table. Says CWA Communications Director Candice Johnson:
If wealthy companies like Verizon can continue to cut working families’ pay and benefits, we will never have an economic recovery in this country. This is a fight for all middle-class working families.
Verizon’s demands include outsourcing jobs overseas, gutting pension security, eliminating benefits for workers injured on the job, eliminating job security, slashing paid sick leave and raising health care costs.
CWA filed unfair labor practice charges against Verizon Aug. 12 with the National Labor Relations Board (NLRB), charging the company with refusal to bargain in good faith.
Union workers and community allies are joining striking CWA and IBEW members on the picket lines. Barbara Smith of CWA Local 1109 In Brooklyn, N.Y., told Labor Notes that when Verizon Wireless pickets are up:
pedestrians stop and thank us because they understand that this fight is about more than Verizon.
While Verizon is demanding that workers take home less, it paid its top five executives more than $258 million over the past four years, including $80.8 million for its former CEO Ivan Seidenberg. Friday night, more than 500 CWA, IBEW members and their allies held a candlelight vigil outside Seidenberg’ West Nyack, N.Y., home.
They carried a coffin to symbolize the death of the middle class. CWA Local 1101 member Ron Canterino, told reporters:
The middle class is dying here, and we’re here to be together as one class, one people—whether it’s union or nonunion working people.
Here are some other actions you can take to support the strikers:
“Like” the strikers on Facebook here and change your Facebook and/or Twitter profile picture in solidarity here.
Click here to demand that Verizon CEO Lowell McAdam value employees’ work and share his corporation’s success with those who make it possible.
Click here for a list of picket sites in the New York and New Jersey area. `
Click here to sign and Tweet an act.ly petition demanding Verizon drop its outrageous concessionary demands.
To Tweet about the strike, use the hashtag #verizonstrike and feel free to direct to @VZLaborfacts.
This blog originally appeared in AFL-CIO Blog on August 15, 2011. Reprinted with permission.
About the Author: Mike Hallis a former West Virginia newspaper reporter, staff writer for the United Mine Workers Journal and managing editor of the Seafarers Log. He has written for several federation publications, focusing on legislation and politics, especially grassroots mobilization and workplace safety. When his collar was still blue, he carried union cards from the Oil, Chemical and Atomic Workers, American Flint Glass Workers and Teamsters for jobs in a chemical plant, a mining equipment manufacturing plant and a warehouse. He has also worked as roadie for a small-time country-rock band, sold his blood plasma and played an occasional game of poker to help pay the rent.
On Mother’s Day in 1999, Custom Bus Charters’ bus driver Frank Bedell veered off a highway near New Orleans, killing 22 passengers and injuring 20 others. Just 10 hours before this trip, Bedell was treated at a local hospital for “nausea and weakness.” He had been treated at least 20 times in the 21 months prior to the accident, and 10 of those times involved hospitalization for “life-threatening” heart and kidney disease. You can read more about this horrific crash, which remains one of the nation’s deadliest bus crashes, at NOLA.com: Loopholes let sick man drive, safety board says. Also of interest: Breaking the law went with the job.
This accident brought the issue of the medical competence of commercial drivers to the public attention in a dramatic way. In its subsequent report of the accident after the investigation, The National Transportation Safety Board (NTSB) determined that “…the probable cause of this accident was the driver’s incapacitation due to his severe medical conditions and the failure of the medical certification process to detect and remove the driver from service. Other factors that may have had a role in the accident were the driver’s fatigue and the driver’s use of marijuana and a sedating antihistamine.
The incident and investigation prompted NTSB to issue Safety Recommendations revolving around medical certification of commercial drivers.
How are we doing today?
Nearly a decade later, how are these safety measures designed to protect the public from medically unsafe commercial drivers working out? Not too well, according to a recent investigative report by News21, which was published by MSNBC in the article Truckers fit to drive — if a chiropractor says so: “From 2002, when the recommendations were made, through 2008, the last year for which data is available, there were at least 826 fatal crashes involving medically unqualified or fatigued drivers, according to a News21 analysis of the FMCSA Crash Statistics database.”
The article paints a scary portrait of a driver medical certification program that is pretty broken. Truck drivers can pop into roadside clinics to pick up certifications issued after a cursory examination by almost any health professional. And that’s a good scenario – drivers can also download online certificates and fill them out themselves or ignore the requirement entirely. Forgeries are a common occurrence. Being caught without a certificate might result in a slap-on-the-wrist fine. While there have been calls for a national registry for medical certification of commercial drivers, the idea has made little progress. It will probably take the next big incident to ignite public outrage to motivate any change.
For a resource on current regulations, see the US Department of Transportation Motor Carrier Safety Administration’s Medical Programs, which includes medical regulations and notices, including drug and alcohol testing.
The News21 story on commercial drivers is the third part in a series of four articles that deal with transportation and public safety. Here are the others:
Part 1:Driving While Tired: Safety officials are slow to react to operator fatigue:
“NTSB does not track fatigue-related highway accidents on a regular basis. But in 1993, the board commissioned a study expecting to learn about the effects of drugs and alcohol on trucking accidents. Investigators studied all heavy-trucking accidents that year and made an unexpected discovery: Fatigue turned out to be the bigger problem. NTSB Crash investigators said driver fatigue played a key role in a bus accident in Utah in 2008 that killed nine people returning from a ski trip.
The study found 3,311 heavy truck accidents killed 3,783 people that year, and between 30 percent and 40 percent of those accidents were fatigue-related.”
Part 4:Outsourcing safety: Airplane repairs move to unregulated foreign shops
“More maintenance has moved overseas. Airlines are not required to use regulated repair shops. Foreign repair stations can go five years between inspections, and even then are often tipped off that inspectors are coming. Manuals are in English, but not all the workers read English. Drug tests of workers are illegal in some countries.
A News21 analysis of Federal Aviation Administration data showed that about 15,000 accidents or safety incidents in all aviation travel can be attributed at least in part to inferior maintenance or repairs since 1973, when the FAA started keeping such records. In these accidents at least 2,500 people died and 4,200 were injured.”
Most wanted list: transportation safety improvements
The NTSB keeps a most wanted list of transportation safety improvements, in which it makes recommendations for critical safety improvements for various transportation sectors. Recommendations are designed to improve public safety and save lives, but many have been on the list for years. In some cases, individual states may have requirements, but these recommendations are national in scope. While issues on the “most wanted list” are pending, individual employers might use the list as best practice guidance for safety programs to limit exposure both for workers compensation and other liability issues that might arise from commercial transportation accidents.
You can find more reports on transportation and public safety at News21, “a national initiative led by 12 of America’s leading research universities with the support of two major foundations” with a purpose of furthering in-depth and investigative reporting. In 2010, one of the main areas of focus has been Breakdown: Traveling Dangerously in America.
About the Author: Julie Ferguson is an insurance industry consultant with more than 20 years experience developing and implementing communications programs for workers compensation, workplace health & safety, employee communications, and general insurance programs. She founded and serves as editor for the nation’s first insurance weblog, Lynch Ryan’s Workers Comp Insider. She also founded and manages HR Web Café, a weblog for ESI Employee Assistance Group; Consumer Insurance Blog for the Renaissance Insurance Group; and is one of the administrators of Health Wonk Review, a bi-weekly health policy carnival. If you have a question for Julie, you can reach her at email@example.com.
People who work in knowledge-based fields like information technology, accounting, graphic design or legal research are probably well aware that their jobs are susceptible to being outsourced to a low wage country. In fact, I suspect that economists underestimate the impact that this practice will have on the job market as improving technology makes offshoring cheaper and more accessible to smaller businesses. That may be especially true if weak consumer demand continues to push businesses to focus on cost-cutting rather than revenue growth.
But what about people who have jobs that involve physically interacting with their environment? Those jobs can’t be offshored, right? Well…
There’s an article in the San Jose Mercury News today on the emerging remote-controlled robot industry:
The declining prices for telepresence robots will encourage experimentation among companies and entrepreneurs, who will find new uses for them, analysts say.”These robots will have a network effect,” said Hyoun Park, an analyst at the Aberdeen Group, a technology research firm. “The more robots there are, the easier it will be to work remotely in ways we haven’t thought about before.”
As as these technologies become more prevalent, I think one of the new ideas that will emerge will be offshoring the control function. So you’ll have a worker in India or Bangladesh who can do a job that requires physical proximity in a developed country. Some jobs that “can’t be outsourced” … might just get outsourced.
I have a section on this in my book The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future (get the free PDF), which focuses on how technology and globalization are likely to result in increasing structural unemployment:
Those jobs that require significant hand-eye coordination in a varied environment are currently very difficult to fully automate. But what about offshoring? Can these jobs be offshored?In fact they can, and we are likely to see this increasingly in the near future. As an example, consider a manufacturing assembly line. Suppose that the highly repetitive jobs have already been automated, but there remain jobs for skilled operators at certain key points in the production process. How could management get rid of these skilled workers?
They could simply build a remote controlled robot to perform the task, and then offshore the control function. As we have pointed out, it is the ability to recognize a complex visual image and then manipulate a robot arm based on that image that is a primary challenge preventing full robotic automation. Transmitting a real-time visual image overseas, where a low paid worker can then manipulate the machinery, is certainly already feasible. Remote controlled robots are currently used in military and police applications that would be dangerous for humans. We very likely will see such robots in factories and workplaces in the near future.
As I’ve written previously, I don’t think economists understand the extent to which technology is playing a role in the current unemployment crisis–and more importantly how things are likely to progress in the future. Technology and globalization are not going to stand still while we wait for the job market to recover. They will continue to progress and even accelerate. That will make it very difficult to drive the unemployment rate back down without some very effective policies in place.