{"id":974,"date":"2016-02-18T10:32:30","date_gmt":"2016-02-18T14:32:30","guid":{"rendered":"http:\/\/jparnell.com\/blog\/?p=974"},"modified":"2016-02-18T10:32:30","modified_gmt":"2016-02-18T14:32:30","slug":"why-carrier-is-shipping-1400-jobs-to-mexico","status":"publish","type":"post","link":"https:\/\/battle4liberty.com\/?p=974","title":{"rendered":"Why Carrier is Shipping 1400 Jobs to Mexico"},"content":{"rendered":"

It was recently reported that Carrier plans to shift 1400 jobs from its plant in Indianapolis to Mexico in an effort to cut costs. Average wages in Indianapolis exceed $20 per hour, but would drop to around $3 south of the border. While union leaders are understandably upset about the move, it\u2019s really about economics.<\/p>\n

http:\/\/www.reuters.com\/article\/us-carriercorp-layoffs-idUSKCN0VP2R6<\/a><\/p>\n

But the story doesn\u2019t end here. According to an article in yesterday\u2019s The Internet Post<\/em>, Carrier received $5.1 million in \u201cclean energy tax credits\u201d as part of the stimulus package in 2013. When receiving the funds, Carrier officials said they planned to use the money to \u201cexpand production at its Indianapolis facility to meet increasing demand<\/a> for its eco-friendly condensing gas furnace product line.\u201d Apparently Carrier officials didn\u2019t mention their Mexico plans when getting the check.<\/p>\n

http:\/\/theinternetpost.net\/2016\/02\/17\/carrier-received-5-1-million-in-obama-stimulus-cash-before-move-to-mexico\/<\/a><\/p>\n

Some are upset simply because Carrier is considering moving jobs from Indianapolis to Mexico. Worker anger was already present before<\/em> the story broke about the $5.1 million stimulus payment. I understand this anger, but companies have a right to move production to minimize costs. The wage gap usually has to be substantial to justify a move outside of the US, but it\u2019s the company\u2019s right to make the decision. The idea that Carrier should \u201csave US jobs\u201d and not move is shortsighted because it assumes that the company can remain profitable while paying higher wages. Whether or not a particular company should relocate production abroad is often complicated and depends on factors unique to the company and its industry.<\/p>\n

However, my view changed completely when I learned of the stimulus payment. While details are still forthcoming, this smells like more cronyism and unintended consequences to me. A government stimulus program is supposed<\/em> to boost production and hiring in the US. As with most government programs designed to spur business activity, the bulk of the money either has little if any appreciable effect on long-term growth or ends up in the hands of cronies. As President Obama put it when confronted with the fact that the $787 billion 2009 stimulus package (ie, the American Recovery and Reinvestment Act) wasn\u2019t working as promised, \u201cShovel-ready wasn\u2019t as shovel ready as we expected.\u201d He should not have been surprised.<\/p>\n

This is a story worth watching and Carrier has some explaining to do. In the interim, it should remind all of us why government meddling in business affairs on either side of the equation rarely makes any sense.<\/p>\n","protected":false},"excerpt":{"rendered":"

It was recently reported that Carrier plans to shift 1400 jobs from its plant in Indianapolis to Mexico in an effort to cut costs. Average wages in Indianapolis exceed $20 per hour, but would drop to around $3 south of the border. While union leaders are understandably upset about the move, it\u2019s really about economics. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/posts\/974"}],"collection":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=974"}],"version-history":[{"count":0,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/posts\/974\/revisions"}],"wp:attachment":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=974"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=974"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=974"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}