President-elect Donald Trump went to Indiana yesterday to announce a deal that will stop some 1,000 jobs at a manufacturing plant there from moving to Mexico. The high-profile intervention glossed over the fact that more jobs than that are still being moved, as planned, by Carrier, a maker of heating and cooling equipment.
There are many economic reasons why the cost of saving these jobs, however noble, outweighs the benefits. For one thing, it reportedly cost $7 million in tax breaks (paywall) to keep the jobs in Indiana. And if the Trump administration wants to make similar arrangements with companies across the country, it has its work cut out.
In November alone the manufacturing sector shed 4,000 jobs, the Bureau of Labor Statistics said today. At the same time, the economy as a whole gained 178,000 jobs in November, and the unemployment rate dropped to 4.6%, the lowest since 2007.
So far this year, the US has lost 60,000 manufacturing jobs. From its peak in the late 1970s to today, more than 7 million factory jobs have disappeared; the economy as a whole has added more than 50 million jobs over the same period.
As a share of total jobs, manufacturing has been in decline for the better part of 70 years, thanks to automation, trade, and a host of other factors. Trump’s promise to bring back millions of manufacturing jobs through sheer force of will is unrealistic and impractical.
Carrier’s statement addressing its agreement with Trump suggests that it won’t hesitate to move more jobs abroad in the future. The deal they negotiated with the president-elect “in no way diminishes our belief in the benefits of free trade and that the forces of globalization will continue to require solutions for the long-term competitiveness of the US and of American workers moving forward.”