Indiana Gives $7 Million in Tax Breaks to Keep Carrier Jobs

[Historic NY]

Source: Wall Street Journal

The deal would cover 800 Carrier workers from the Indianapolis furnace plant and an additional 300 research and headquarters positions that weren’t slated to go to Mexico, according to another person briefed on the deal.

The company still plans to move 600 jobs from the Carrier plant to Mexico. It also will proceed with plans to close a second plant in Huntington, Ind., that makes electronic controls, moving 700 other jobs to Mexico.

Read more: http://www.wsj.com/articles/indiana-gives-7-million-in-tax-breaks-to-keep-carrier-jobs-1480608461

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Taxpayers left holding the bag, for how long.

[muntrv]

1. Corporate welfare.

[Cryptoad]

11. Corporate Socialism

[hibbing]

16. Socialize the costs, privatize the profits

It's American capitalism at its best.

Peace

[Tikki]

2. Somebody here informed me that this is trump's 'art of the deal' genius.

Who will spell out the true details to the American workers by using words like "actually a failure for American workers?"



Tikki

[PaulRevere08]

5. That's the Trumpet's version of a good deal.

The cost is passed on to others and he get's to profit from it. Does not matter if it is really a good deal or makes nay kind of business sense.

[msongs]

3. real headline: Carrier moving 1300 jobs to Mexico while pocketing $7mil in tax breaks nt

[left-of-center2012]

4. $7 million from the taxpayers' pockets

Saw one of those Carrier employees on TV who said his pay may go from $20 an hour to minimum wage.

[SpankMe]

6. Seven million isn't a lot. Must be some other incentives. Or, more likely, politics.

One thousand jobs at, say, $26/hr (a pay rate for Carrier workers I heard quoted on NPR), when you add benefits, OT pay and the like, that makes payroll for these 1k employees somewhere between $50M and $70M per year.

I don't know how much manufacturing jobs in Mexico pay, but a quick Internet search puts Mexico's average between $2 and $5 per hour. I'll be real generous here and say Carrier would pay $10/hr in Mexico.

So, that would make Carrier's payroll in Mexico something like $20M to $27M per year. That's a savings in labor cost of something like 250% - tens of millions per year.

I don't see how a $7M tax "incentive" (whatever that is) is sufficient to change Carrier's mind. Whether this is a one-time, or yearly tax break, I don't see how this benefits Carrier in the long run given the disparity in hourly pay rates between the US and Mexico.

I small a rat. An orange-faced, pompous, weird-haired rat.

[philosslayer]

7. I think the state of Indiana may come out ahead

Let's do the math. $7 million over 10 years equates to $700,000 per year. For 1100 jobs, that's about $630 per year per job. If the state only gets $630 per year back in income tax from each of those employees, they're already get breakeven. Where is my math wrong?

[BumRushDaShow]

9. The state income tax is 3.3%

The "$630" would be the close to someone making $10/hr or around $19,200/yr (with 20 days of holidays/sick days/vacation/personal days per year) @ 3.3% rate (or making less/hr but working more hours w/o that many days off). I am guessing these folks may be making more than that though, so the state would get more than $630/yr if the employees remained and there was no "incentive".

My brain is a bit fried from work today so you might be able to work out something!

[philosslayer]

10. So given your numbers the state actually comes out ahead

[BumRushDaShow]

13. Found an interesting article from this past February about the original closure

and one of the comments below the article is eye-opening (towards the top of a comment section that is also filled with the usual RW anti-union drivel) -

CLS Susan • 10 months ago

Not $4 an hour, they are going to be paying $5 per day according to what they already pay in their plants there.....And the company JUST accepted over 5 million dollars from the state of Indiana in 2014 to EXPAND and is fighting the return of this money, along with the almost 1/2 Million dollars in training incentives contracted in 2013 from the city that they have received almost all of.....disgrace is NOT the word for it. Very glad I'm seeing (at least in Indiana) the largest HVAC installers and companies are pulling Carrier products from their shelves and warning clients they will no longer bid using Carrier Products and will stick with the two remaining US HVAC manufacturers.

http://www.ibj.com/articles/57162-carrier-plans-to-lay-off-1400-indy-workers-in-mexico-move

The average worker is getting $23/hr, the company received "incentives" just 2 years ago, and were taking them and apparently pocketing them, determined to close anyway. I expect the same will happen with these newest "incentives".

[angrychair]

8. What bullshit spin from tRump

The taxpayers of Indiana are paying $7 million to "save" 800 jobs but 1,300 jobs are still leaving the country. What kind of half-ass deal is that!

[Cryptoad]

12. Did they mention,,,,,

how much of that would be re-funneled back to a Trump-Pence off shore account, the remaining to be paid by all the hard working folk of Indiana!

[not fooled]

18. Or campaign contributions

gotta keep the rubes indoctrinated

[Tarheel_Dem]

14. So the taxpayer picks up the tab? I remember when this was verbotten in GOP world.

[keithbvadu2]

15. Is that socialism or communism for gov't to pay wages rather than the free market?

Whether the gov't pays directly or indirectly.