‘NO COMPANY WANTS TO BE IN THE TRUMP CROSS HAIRS’
Walmart, GM join parade of firms vying for good publicity — but is it just for show?
What started as a trickle of companies boasting about their plans to boost their U.S. employees has become a cascade — all appearing to be aimed at currying favor with President-elect Donald Trump.
General Motors and Walmart were the latest to join up Tuesday as various large companies have announced plans that have included adding thousands of jobs in the U.S., retaining plants or canceling plans to move jobs to Mexico.
But while such declarations seem to work magic when it comes to attracting supportive tweets from Trump, they call into question whether companies are actually changing direction away from expanding in other countries and are now focusing their job-creation efforts on the U.S.
Economists and others paying close attention as corporations have portrayed themselves as showing a renewed interest in the U.S. since the presidential election see a mixed picture.
“There is some substance that is colored by smoke and mirrors,” says Harley Shaiken, a University of California-Berkeley professor who follows labor issues and globalization. “It’s really both going on.”
Many of the announcements about job creation in the U.S. cover plans that were already in the works but now become worth trumpeting given Trump’s focus, he says. And while the numbers of positions being created sound great, they pale compared to numbers of jobs lost over the years.
GM announced it will add 7,000 information technology and manufacturing jobs in the U.S., which is a lot by any measure, but compares to a current hourly workforce of 56,000. In 1979, The Associated Press reports, GM’s U.S. workforce peaked above 618,000. GM’s manufacturing jobs, as represented by the United Auto Workers union, start at $27.79 an hour under the latest contract.
Walmart said it will create 10,000 new retail jobs in the U.S. this year, but that’s a fraction of the company’s U.S. workforce of roughly 1.5 million. Walmart’s starting wage is about $9 an hour.
They join other companies that stepped up as well, often with similar, bittersweet news. For instance, while Amazon has said it would create 100,000 jobs in the United States in 2017, most are low-paying warehouse jobs that offer little job security. Amazon on average pays its warehouse employees 15% less than the average wage of other warehouse workers in the same region, according to Stacy Mitchell of the Institute for Local Self-Reliance, a nonprofit advocacy group that works on sustainable community development. Most of the jobs had already been announced in the local markets where the warehouses are located.
“Given that there’s no real news here, one certainly has to wonder if Amazon’s announcement is mainly aimed at currying favor with President-elect Trump,” Mitchell says.
Corporations are making their announcements largely out of fear, wanting to avoid being scolded in Trump’s tweets the way that Ford Motor was singled out for expanding in Mexico during the presidential campaign. (Sure enough, Ford found itself back in Trump’s good graces on Twitter this month by canceling plans for a $1.6 billion plant in Mexico).
“No company wants to be in the Trump crosshairs,” says author and researcher Alan Tonelsen, founder of the RealityChek blog who has written extensively on labor issues. “Big multinational companies hate bad publicity.”
The spin may be creating the reality, he says, rather than vice versa. As the announcements pile up, it is creating a climate STORY CONTINUES ON 2B
“There is some substance that is colored by smoke and mirrors. It’s really both.” Harley Shaiken, University of California-Berkeley professor
where companies realize they move jobs offshore at their own peril. In the case of automobiles, the mere threat of imposing 35% tariffs has been enough to entice companies to wave the flag.
The question becomes whether the Trump factor will continue to be enough to compel companies to keep up the “Made in the USA” patter. Some are already lining up to say they’ve seen enough.
“I do not believe it will be feasible or represent good policy for the president to strong-arm individual companies into making business decisions that are not in their best economic interests,” says Michael Farr, CEO of Farr, Miller & Wash- ington, a money management firm.
No matter what side you’re on, what we’ve seen so far is likely just the beginning.
“This is the opening salvo,” says Josh Bivens, research director for the Economic Policy Institute, a Washington-based think tank. “We will be seeing much more coming out of the Trump administration.”