Trump and Carrier’s Publicity Stunt
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The Trumpence deal “saved” 600 employees at $64k yearly is a $38.4 million expense. Why say $64k yearly? Here’s the previous deal offered:
The Indiana Economic Development Corp. said it has offered Carrier $5 million in conditional tax credits based on a plan to retain 1,069 jobs with an average wage of $30.91 per hour, spokeswoman Abby Gras said. [Reuters]
The US military accounts for roughly 10% of Carrier’s $56 billion in operating revenue — that’s $5.6b [WSJ].
Carrier’s total US workforce is about 50,000 people, which is $3.2b in expenses at $64k yearly. Which is fairly insignificant when your revenue is $56 billion.
For a $7 million tax break (over 10 years, so $700k yearly), Carrier will keep 600 jobs here and invest $16 million into their Indiana plants (in year one).
1,300 Carrier jobs (an expense of $83.2 million at $64k yearly) will be exported to Mexico, where the minimum wage just raised this year to $4.30 an hour with a 48-hour work week, coming to a total of $10,732.80 a year. Operating those 1,300 jobs in Mexico will cost $13.9 million, for a savings of $69.3 million yearly [Washington Post].
Take $38.4 million yearly out to keep 600 jobs in, then take out a one-time $16 million investment. Finally, add in $700k yearly in tax savings.
Carrier comes out $15.6 million ahead year one, and $31.6 million ahead for the following 9 years.
- Carved out about ⅔ of their workforce in these Indiana plants
- Saved $331.6 million over the next 10 years
- Used it as a misinformation tool to appear working-class-friendly in the news and give Trump his first post-election “win”
- Did not broker this deal; Indiana Governor and Vice President-Elect Mike Pence did
- Can not act as if he was tough on Carrier, whom he called out and promised to save the jobs of, via steep tax consequences specifically
- Lied about the means they would use to retain Carrier’s jobs in the United States
- Lied about the number of Carrier jobs the deal would retain in the United States