Getting back to the Carrier deal, I do not think the $7 million in incentives had much to do with this.
The wage differential I heard was $3 an hour vs. $26 an hour. That's a delta of $23 an hour, or $46k per year, per employee. There were going to be $65 Million in savings, with that wage differential multiplied across 1400 employees. And now - we really believe Carrier is going to settle for $37 Million LESS in savings, PER YEAR, in exchange for a measly $7 Million in incentives?
No. They were either shamed into keeping some jobs...they genuinely thought this was worth it to get Trump's ear for a while...or...they were worried about their Government contracts.
Here's a NYT article which seems to suggest some of the points above:
http://www.nytimes.com/2016/12/01/business/economy/trump-carrier-pence-jobs.html?_r=0
The folks stressing the "crony incentives" angle are mostly getting it wrong. They should be playing the "authoritarian" angle. This was a "one-off" deal, precisely because the specific characteristics of this particular deal-target made them more willing to deal than other companies might be. It turns out the incentives were the least part of it. This company is into the taxpayer, Bigly, and wants to stay that way.
(excerpt, for those who care about the details):
"...United Technologies, Carrier’s parent, saw the writing on the wall as soon as Mr. Trump declared victory last month. Offering to preserve jobs, even at the cost of some of the $65 million savings the company expected from the move, could serve its larger corporate interests.“Every penny counts, but if we step back and I’m looking at earnings of $6.60 per share this year, 2 cents is an easy concession if the president-elect listens to some of the company’s bigger concerns,” said Howard Rubel, a senior equity analyst with Jefferies, an investment banking firm in New York.
And Mr. Trump and Mr. Pence, while providing a carrot through the state incentives and promises of future business tax cuts, held an implicit stick: the threat of pulling federal contracts from Carrier’s parent, United Technologies. Mr. Trump and his team were well aware that the amount United Technologies stood to lose in those contracts dwarfed the savings from moving some of its operations to Monterrey from Indiana.
Despite only accomplishing half of what had been promised in the campaign, Mr. Trump and Mr. Pence predicted that the number of jobs ultimately preserved could rise as Carrier follows through on its promise to invest more than $16 million in the state.
That provision, plus the incentives, were worked out between Carrier and officials from the state of Indiana’s economic development office, with Mr. Pence overseeing the process.
The vice president-elect insisted that the incentives did not represent a giveaway on Mr. Trump’s part, and claimed United Technologies had turned down a similar-size package of breaks in March.
What made the difference, he said, was Mr. Trump’s public pressure, as well his promise to cut corporate taxes and ease regulation.
“These jobs were gone,” Mr. Pence said. “I sat the executives down in my governor’s office in the statehouse in early March. They said we aren’t in a position to reconsider this in any way, shape or form.”
Mr. Trump, too, played down the role of the incentives. And he said he did not directly raise the $5 billion to $6 billion in federal contracts United Technologies receives, much of it from the Pentagon.
But company officials are acutely aware that its Pratt & Whitney unit, among other things, supplies jet engines to the Air Force’s most advanced fighter and many other planes, making it much more vulnerable to political pressure than other, lesser-known manufacturers that have been steadily closing shop in the Midwest and moving production south of the border.
“It may have a played a role in their equation,” Mr. Trump allowed. “I never mentioned it. I didn’t feel I had to.”
Sheesh. It's almost like someone in here was saying this all along. Now I wonder, who could that have been?