This is what Trump and Sanders get wrong about free trade

Breaking News
tags: election 2016, Bernie Sanders, Trump, free trade



Manufacturing jobs have been on the move for decades, long before NAFTA or any other modern trade agreement. And if free trade isn’t the underlying cause of disruptions in manufacturing employment, then changing or even getting rid of trade agreements won’t be enough to bring those jobs back.

For instance, take Carrier Air Conditioning

Looking into Trump’s favorite example, Carrier Air Conditioning, actually makes this point. Carrier has been moving factories since it was founded more than a century ago. Engineer Willis Carrier invented the first functional air conditioner in 1902. His employer, the Buffalo Forge Manufacturing Co. in Buffalo, created Carrier Air Conditioning as a subsidiary. Carrier became an independent company in 1915. Between 1918 and 1921, it moved its headquarters, research laboratory and production facilities to a technologically advanced plant in Newark. After a series of mergers, Carrier moved again, consolidating its operations at a 30-acre site in Syracuse, N.Y., in 1931. Operating under the slogan, “Weathermaker to the World,” it already had begun selling commercial air-conditioning systems in Japan, Europe and South America.

Buoyed by the surge in suburban home construction after World War II, Carrier continued to expand – and move. During the 1950s and 1960s, it opened production facilities in locations around the United States that had low labor costs, including one in Indianapolis and others in the South. Beginning in the 1980s, the corporation began a global expansion strategy that involved acquiring foreign air-conditioning manufacturers. As early as 1990, almost half of Carrier’s production took place overseas. In 2004, Carrier closed its Syracuse manufacturing facility and offices.

Why all the moving? The factors included proximity to new markets; the need for modernized facilities; evading unions; and local and state tax incentives. But one factor has been constant: the pursuit of low-cost labor.




comments powered by Disqus