Trump and Blue-Collar Jobs

By SETH SANDRONSKY

On the campaign trail, Hillary Clinton and Donald Trump talked about rebuilding the nation’s infrastructure of airports, bridges, dams and highways to boost blue-collar job growth. That was then.

For a preview of this likely $1 trillion policy initiative, we turn to a paper by two of President-elect Trump’s senior policy advisors, Wilbur Ross, his pick for commerce secretary, and Peter Navarro, a University of California-Irvine business professor. The duo stress that infrastructure is a way to create industrial job growth.

They write: “with the decline of manufacturing in our country, infrastructure projects are one of the few high paying jobs that could employ the less well educated segment of our population.”

This fall of blue-collar employment, a stable of the postwar economy, is stunning. American factory jobs dropped from 16,855,000 in January 1994 to 12,338,000 in January 2016, according to the US Bureau of Labor Statistics.

Recall that Trump’s critique of blue-collar job losses scored with some working-class voter in industrial states such as Michigan, Ohio, Pennsylvania and Wisconsin. In these Rust Belt states, scores of factories have closed and moved to low-wage nations such as China and Mexico.

In a presidential debate, Trump called the North American Free Trade Agreement that took effect on Jan. 1, 1994, the worst deal ever for US workers. He also spoke about renegotiating NAFTA.

Recently, Trump has swayed the Carrier Air Conditioning Co. to keep an Indiana factory open versus moving it to Mexico, thanks in no small part to a multi-million tax-cut for the corporation. Further, that corporate welfare policy is not a net gain of new blue-collar employment.

In the meantime, Navarro and Ross push “adequate and innovative financing options” to kick-start American infrastructure projects to spark industrial employment. To this end, they advocate “a tax credit equal to 82% of the equity amount” for investors whose capital fuels public-private partnerships (P3s).

On one hand, infrastructure investment does spur employment. However, two critics question the role of private finance in P3s. Why?

“Trump’s plan frames the infrastructure problem as a lack of innovative financing options,” according to Josh Bivens and Hunter Blair of the Economic Policy Institute in Washington, DC. “This is nonsense.”

Navarro and Ross’ claim that private-public partnerships lower infrastructure costs is untrue, according to Bivens and Blair. They note California’s State Route 91 Express Lanes with tolled-lanes, a P3 project.

That project increased costs when private partners sued to block the building of new non-tolled lanes to handle more traffic. It was a bid to protect profits for tolled-lanes by thwarting competition.

Economists have a term for firms that prevent competition: monopolies. Monopolies are bad news for workers. Why? Monopolies cut the number of firms competing to hire employees. This outcome reduces hiring and wages, according to a paper by President Obama’s Council of Economic Advisers.

In the meantime, the Center on Economic and Policy Research in Washington, DC, will launch the Blue-Collar Jobs Tracker to chart employment growth in manufacturing and mining employment, beginning Jan. 1, 2017. “The BCJT will simply be telling us whether the Trump administration is successful in its efforts to bring these jobs back to the states that have lost them,” according to economist Dean Baker, CEPR co-director.

The BCJT will be web-based, and count state and national industrial employment growth, according to a CEPR news release (http://cepr.net/press-center/press-releases/cepr-announces-the-blue-collar-jobs-tracker).

Seth Sandronsky is a journalist and member of the Pacific Media Workers Guild. Email sethsandronsky@gmail.com.

From The Progressive Populist, January 1-15, 2017

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