Trump Is Subsidizing Companies That Send Jobs Overseas
On the campaign trail, Donald Trump promised to stop U.S. corporations from offshoring American jobs on “day one” of his presidency.
Just after his election, President Trump claimed to be following through on this promise when he supposedly brokered a deal to stop Carrier from sending jobs at its Indianapolis air conditioning and heating plant to a low-wage plant in Monterrey, Mexico.
This promise to save jobs proved to be nothing more than another of Trump’s false claims.
Within 18 months of Trump’s election, U.S. corporations had shipped 140,000 jobs overseas — including 700 of the jobs Trump supposedly saved at Carrier — according to a new report by Good Jobs Nation.
Even worse, more than 13,000 of these jobs were lost at major corporations that have been awarded billions of dollars in federal contracts by the Trump administration, such as General Electric, AT&T, and Carrier’s parent company, United Technologies (UTC). These corporations have been awarded at least $51 billion in taxpayer-funded contracts since Trump took office, including more than $900 million to AT&T and $2.6 billion to UTC.
In fact, the top 100 federal contractors have offshored jobs at an annual rate of 8,363 jobs per year since Trump was elected — almost triple the average annual rate under the Obama administration, according to our research. What’s more, the total number of jobs offshored by major federal contractors under the Trump administration is the highest on record for any year other than 2008, when the Great Recession hit.
If offshoring continues at this rate for two presidential terms, federal contractors will have sent more jobs overseas than the total number offshored by every previous administration combined.
The impact of this offshoring by major federal contractors has been particularly damaging in states that Trump won in 2016, including Wisconsin, Iowa, Michigan, Ohio, and Pennsylvania. These states account for almost 30 percent of the total jobs outsourced by federal contractors.
Since becoming president, Trump has largely remained silent as offshoring, and the flow of federal money to offshoring corporations, has continued. It wasn’t until Harley Davidson announced that it was shifting production overseas to avoid European retaliatory tariffs that Trump returned to the issue, tweeting that “we won’t forget” Harley’s decision and threatening to “tax [it] like never before!”
There’s no law that allows a president to tax a U.S. corporation for making and selling its products overseas. But there isa law that gives the president the power to stop awarding federal contracts to businesses that send American jobs abroad.
The Procurement Act of 1949 gives the president the authority to establish “policies and directives” for federal contracting. Virtually every modern president has used this power to push through key policy objectives by issuing executive orders impacting the major slice of the national economy supported by federal contract spending — currently running at more than $500 billion per year.
Many of the requirements that federal contractors are currently mandated to follow — including equal opportunity, minimum wage rates, and e-verify — were, in fact, imposed by executive order. Most recently Trump himself used his powers under the Procurement Act to exempt outfitters on federal lands from higher minimum wage rules, so it’s not like he hasn’t heard of it.
Instead of pushing down wages, President Trump could use this power to take immediate action against offshoring by blocking the award of federal contracts to corporations that send American jobs abroad. Otherwise, his promises to help American workers don’t look very serious.