“For people looking to collect paychecks, however, it doesn’t really matter. A lost job is a lost job.”
Last December, President Trump had some good news for hundreds of American workers at a Carrier plant in Indiana. His administration and Vice President Pence (then governor of Indiana) had worked out a deal to save hundreds of union jobs. As the President then put it, workers were going to have a “great Christmas,” and surely many of them did. Trump also said that the 1,100 jobs he worked to save would be a “minimum.”
Turns out, those 1,100 jobs are likely the upper ceiling. Carrier is embarking on several rounds of layoffs that will see jobs shipped to Mexico. These layoffs were known ahead of time, when Trump announced his initial deal back in December. Carrier will still maintain 1,069 jobs at its Indiana plant, per its agreement to receive some $7 million dollars in state aid.
Much of the media’s current barrage of accusations that “Trump didn’t keep his promise” is simply false. However, Americans still have plenty of reasons to be concerned. The layoffs prove just how difficult it is for government officials to keep jobs in the United States. Millions of dollars have been spent to save only a few hundred jobs, and hundreds more jobs are going to be lost regardless.
Further, about four hundred of the 1,100 jobs saved were white collar jobs that were never really at risk of being outsourced. That means only 700 union jobs, give or take, were actually saved. This means that the Indiana government spent about $10,000 dollars to save each job, an obviously substantial sum.
The United States manufacturing sector has slowly been hollowed out by shifting jobs abroad and automation. Many experts claim that more jobs have been lost to robots, than foreign workers. For people looking to collect paychecks, however, it doesn’t really matter. A lost job is a lost job.
Back in 1970, over a quarter of the American population worked in manufacturing. Currently, only about 10% of Americans still work in manufacturing. The decline has been quite steady over time, though it appears to have accelerated since the turn of the millennium. In 2000, nearly 15% of the population worked in manufacturing. By 2010, only 10% of Americans were still working in factories. The number has since hovered right around 10%.
There are benefits to outsourcing and automation, with cheaper goods being the biggest benefit. American consumers can now buy more goods at a cheaper price than at any point in history. The cost of cars, food, and other goods, relatively speaking, has declined. However, for people struggling to get jobs, even cheaper goods are usually out of reach.
The official unemployment rate has fallen to 4.3%, however this doesn’t tell the whole story. The U-6 unemployment rate, which includes discouraged workers as well as those working part-time but in search of full-time employment, is still at 8.4%. Meanwhile, the labor force participation rate remains historically low at 62.9%. At the turn of the century it was at 67%.
President Trump has promised to work hard to keep American jobs at home. However, it’s hard to see how the President can do so without multi-million dollar corporate handouts. At the same time, the President’s tough talk and constant clashes with foreign leaders may scare away potential export opportunities or injections of foreign cash. This could slow job growth and even accelerate job losses. Keeping this campaign promise may be harder for Trump than he expected.
