Jobs are saved, for now


Mac McPhail


“Just the facts, ma’am.” You have to be a person of my generation to remember that line from the old “Dragnet” TV show. Sargent Joe Friday’s cut and dry demand for the information concerning the case he was investigating never changed. He just wanted the facts so that he could crack the case and arrest the crook before the half hour program was over. And he would.

“Just the facts” doesn’t seem that important these days. It’s often just the facts that fit the favored story that are presented. Promoting the desired narrative, and not necessarily all the facts, seems to be the method of many.

Of course, that’s nothing new. There may have been times, when I was growing up, that I didn’t quite tell my parents all the facts concerning my activities, just the facts I wanted them to hear. (There’s really no need to get into specific details of such events, if they happened, at this time.)

Narratives, and the facts behind them, come to mind recently when hearing news reports about Carrier, the heating and air conditioner unit manufacturer, not sending jobs to Mexico. Of course, the narrative and the facts you heard were primarily based on the news source’s opinion of President-elect Donald Trump.

So, here are some of the facts. United Technologies, Carrier’s parent corporation, and Carrier were planning to close down a manufacturing plant in Indiana. The 2100 jobs lost were to be shipped to a new plant in Mexico, where employees average to be paid $3 an hour instead of the $20 an hour average at the Indiana plant. Trump promoted that after pressuring the heating and air conditioning manufacturer, Carrier agreed to keep 1100 of those jobs in Indiana, and not moving them to Mexico. Carrier has since corrected that figure, saying that around 800 of those jobs will remain in Indiana. The state of Indiana, where the Vice President-elect, Mike Pence, is still governor, has promised Carrier $7 million in economic incentives for keeping those jobs there. Carrier stated it received $7 million in financial incentives from the state in return for job retention, and will spend $16 million in capital investment in the plant.

So it looks like around 800 U.S. jobs will be saved. So Carrier is being praised for only sending 1300 jobs to Mexico, and is receiving $7 million in incentives while they are doing it. But, I suppose if you are one of those 800 employees who gets to keep their job, it’s a good deal, for now.

What about the $16 million that Carrier plans to invest in their Indiana plant? Greg Hayes, CEO of United Technologies, stated earlier this month that much of that investment will be used to increase automation at the facility.

In an interview with CNBC, Hayes explained, “We’re going to…automate to drive the cost down so that we can continue to be competitive. Is it as cheap as moving to Mexico with lower cost labor? No. But we will make that plant competitive just because we’ll make the capital investments there. But what that ultimately means is there will be fewer jobs.”

So, many of the remaining jobs at the Carrier plant in Indiana will eventually be done away due to increased automation. Automation, which will be partially funded by the financial incentives given to Carrier designed to get them to stay, supposedly to save jobs. Ironic, isn’t it?

American jobs going overseas is a problem, and our government should do what it can to make the business climate profitable for manufacturers to remain in the U.S. But, when it comes to American jobs, maybe we should be less worried about competition with that worker in Mexico and India, and more concerned about that robot being created in a mechanical engineering lab at some state university.

Why should we be concerned? U.S. manufacturing has become much more efficient. According to a recent column on CNN.com, output at U.S. factories is up 150% in the last 40 years. But U.S. manufacturing jobs have plunged by more than 30% in that same period. And automation is a big reason why. A recent study by McKinsey & Co. said that 45% of the tasks that U.S. workers are currently paid to perform can be automated by existing technology.

The job market in America is changing, and changing fast. So Americans are going to need to change inorder to adapt to it, and adapt fast. And those are the facts, no matter what narrative you favor.

Mac McPhail
http://www.clintonnc.com/wp-content/uploads/2016/12/web1_general-pics-025-13.jpgMac McPhail

Mac McPhail, raised in Sampson County, lives in Clinton and can be reached at rvlfm@instrstar.net.

Mac McPhail, raised in Sampson County, lives in Clinton and can be reached at rvlfm@instrstar.net.

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