President-elect Donald Trump stopped Carrier Corp from leaving Indiana and moving to Mexico by negotiating a tax break with former Indiana governor and Vice President-elect Mike Pence to avoid job cuts.
A total of around 1,400 manufacturing jobs were threatened, yet the agreement was only able to save 1,000. Even though some jobs could not be saved, the decision Trump made to step in is important to stop the unemployment rate from rising.
Carrier settled on a 10-year tax break of $700,000 a year for staying and keeping at least 1,000 workers in the Indianapolis factory.
According to United Steelworkers, representatives of Carrier, the company “[planned] to pay Mexican workers poverty wages estimated at $3.00 an hour, while continuing to sell their product to a US market.”
Carrier’s plan to pay Mexican workers less could have been achieved due to Mexico’s substandard minimum wage when compared to America. A huge profit could be made by paying workers in Mexico less and selling to an American market where products are worth more.
As of August 2016, the US unemployment rate was at 4.5 percent, or 7.8 million Americans.
Senior Erica Fisher says, “I am not afraid of unemployment. … However, with the new president, he was able to win because he convinced the people that they should not be worried.”
In 2015, about 13.5 percent, or 43.1 million, Americans lived in poverty. In order to solve this crisis, Trump plans to create more job opportunities as well as raise the minimum wage. However, if the wage was to be raised, there would be major economical changes.
Junior Jack Brzozowski says, “If wages were to be raised, then the prices of goods would increase with it. Higher salaries could be beneficial to our economy because people will have more money to spend on goods and increase demand for foreign goods as well.
However, some financial reporters and politicians were against the decision to give Carrier tax breaks.
Senator Bernie Sanders wrote in the Washington Post, “US jobs are less secure because of the deal since companies can simply threaten to move to Mexico in order to get tax breaks from the government.”
The end result of the settlement with Carrier was a sign as to what Trump has in mind for America, which is lowering corporate taxes. As a businessman himself, Trump wants to keep jobs in America by having industries pay less in government fees.