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Can Donald Trump Revive the American Economy, One Factory at a Time?

The Trump administration scored a big win with Carrier’s decision to keep manufacturing jobs from Indiana.

By Dwyer Gunn


(Photo: Topical Press Agency/Getty Images)

Last week, American manufacturing giant Carrier announced that it had struck a deal with the incoming Trumpadministration to keep almost 1,000 jobs in Indiana. Throughout his election campaign, Donald Trump had repeatedly attacked Carrier over its plans to relocate some manufacturing jobs from Indiana to Mexico.

Many Trump supporters see this as proof of a new era, one in which companies will have to pay a steep price for offshoring. And, for Trump, this is obviously a big win: In a speech at a Carrier plant in Indianapolis on Thursday, he again doubled down on his promise to keep jobs from going overseas. “Companies are not going to leave the United States anymore without consequences,” he said. “It’s not going to happen, I’ll tell you right now.”

Meanwhile, some economists and politicians have expressed concerns about the terms of the deal (the company reportedly received a $7 million package of tax incentives from the state of Indiana), the precedent it may have set, and the practical scaleability of a factory-by-factory approach to keeping jobs in the U.S.

As the New York Timesreported the day after the deal was struck, there are factories all over the Rust Belt with plans to move manufacturing elsewhere. Can the president-elect really strike deals with all of them?

The debate over Trump’s tactics is a red herring that distracts from the deeper challenges facing industrial and rural areas. Even if American companies completely stopped offshoring (a highly unlikely outcome), manufacturing workers will still have to contend with a much bigger foe: automation.

Consider the chart to the left, from Mark Muro at Brookings (and read this great related explainer from the Washington Post’s Ana Swanson). There is simply no getting around the fact that automation has made it easier to manufacture products without human beings. “America is already producing a lot,” Muro writes. “And in any event, the return of more manufacturing won’t bring back many jobs because the labor is increasingly being done by robots.”

The Carrier deal is, of course, excellent news for the affected workers and their families, and that fact shouldn’t be forgotten. But a successful economic strategy for the working class must consist of more than just saving manufacturing jobs. Or, as Nebraska Senator Ben Sassetweeted:

It’s one thing to challenge offshoring; it’s another to take on the robots.