Outsourcing Indiana, What the Hoosier State tells us about the state of American manufacturing

Edmund Kozak, Lifezette 

Former Carrier employees — joined by leaders of the AFL-CIO and USW, Sen. Joe Donnelly, and presidential candidate Sen. Bernie Sanders — held a rally and march outside of the Indiana State Capitol in Indianapolis on Friday to protest Carrier Corp.’s decision to close an Indiana plant and outsource 1,400 jobs to Mexico.

Carrier’s decision, first announced in March, was met with utter shock by not only its employees, but Americans across the country as footage of Carrier employees receiving the news on the factory floor went viral.

Carrier’s decision is just another symptom of the sickness that afflicts Indiana and other states across the country — a toxic disease of bad free trade deals, overregulation and Big Labor.

Indiana’s manufacturing base have suffered harder than many states over the last two decades, and although it is actually doing slightly better in manufacturing job creation than some states at present, it still is a long way off from reaching its pre-recession years.

Northwest Indiana lost roughly 5,500 manufacturing jobs during the recession, but the region has only recovered about 35 percent of them by the summer of 2014, according to Micah Pollak, an assistant professor of economics at Indiana University Northwest.

The American Community Survey, an ongoing statistical survey administered by the U.S. census bureau, found that in 2005 Indiana had 597,542 manufacturing jobs. By 2014 the number was 578,141.

indianajobs_small Outsourcing Indiana, What the Hoosier State tells us about the state of American manufacturing

In total, Indiana lost over 100,000 manufacturing jobs between 1994-2015, according to the Bureau of Labor Statistics. Moreover Indiana’s trade deficit more than quadrupled between 2010-2014 alone, from just over $2.5 billion to more than $11 billion, representing a deficit increase at a rate more than 10 times faster than the national trade deficit.

Trade with China has much to do with Indiana’s suffering. Steel manufacturing company ArcelorMittal, one of Northwest Indiana’s largest employers lost over $1 billion in 2015.

“The already challenging operating conditions have further deteriorated during recent months, largely due to additional declines in steel prices caused by exceptionally low Chinese export prices,” ArcelorMittal Chairman and CEO Lakshmi Mittal said.

But Carrier’s decision was also largely driven by U.S. government regulation. “This move is intended to address … ongoing cost and pricing pressures driven, in part, by new regulatory requirements,” said Chris Nelson, Carrier’s president of HVAC systems and services for North America.

Despite Indiana’s slight gains in manufacturing jobs over the past two years, it is unlikely the state will ever nurse its manufacturing base back to pre-recession levels if the economic climate in America continues to encourage decisions like Carrier’s.

As long as long as government overregulation, Big Labor’s stranglehold on the American labor force, and bad trade deals continue unchallenged, Friday’s march outside the Indiana state capital will be repeated in cities across the country, from Pennsylvania to Illinois, from Wisconsin to Iowa.

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