Indiana Gives $7 Million in Tax Breaks to Keep Carrier Jobs
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 werent 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
Taxpayers left holding the bag, for how long.
muntrv
(14,505 posts)Cryptoad
(8,254 posts)hibbing
(10,095 posts)It's American capitalism at its best.
Peace
Tikki
(14,555 posts)Who will spell out the true details to the American workers by using words like "actually a failure for American workers?"
Tikki
PaulRevere08
(449 posts)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
(67,381 posts)left-of-center2012
(34,195 posts)Saw one of those Carrier employees on TV who said his pay may go from $20 an hour to minimum wage.
SpankMe
(2,957 posts)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
(3,076 posts)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
(128,718 posts)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
(3,076 posts)BumRushDaShow
(128,718 posts)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) -
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
(8,685 posts)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
(8,254 posts)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
(5,801 posts)gotta keep the rubes indoctrinated
Tarheel_Dem
(31,228 posts)keithbvadu2
(36,724 posts)Whether the gov't pays directly or indirectly.
Response to Historic NY (Original post)
Bear Creek This message was self-deleted by its author.