IEDC: The Trump Administration and Economic Development

Here is an interesting repost from IEDC.

President-elect Donald Trump has made good on a campaign pledge to fight the offshoring of U.S. jobs.

Trump announced earlier this week that he had negotiated a deal with Indianapolis-based Carrier, an air conditioner manufacturer, that would keep some jobs in Indiana that the company intended to offshore to Mexico (New York Times). In exchange for a state tax incentive of an undisclosed amount, Carrier, a name that went viral earlier this year when an employee recorded the company’s layoff announcement, will keep roughly half (1,000) of those jobs at its U.S. facility.

It’s certainly rare for the (soon-to-be) highest-ranking member of the federal government to involve himself directly in matters typically handled by local and state economic developers. Whether the move is indicative of an ongoing strategy for the new administration is still unclear; the Carrier deal is just a drop in the bucket in a sector for which automation is a far greater threat to jobs than offshoring. What policies the new administration plans to adopt to encourage job creation and retention on a larger scale remains to be seen, but the announcement has led to speculation on how the Trump administration will impact the work of economic developers.

Mark Barbash of the Council of Development Finance Agencies sees potential positive and negative effects stemming from a more hands-on approach from the federal government. Some of the good could be more federal dollars for business retention, either directly on a company-by-company basis or through a larger budget for the Economic Development Administration. Some of the negatives could be an emboldening of companies to threaten offshoring unless they are granted lucrative tax breaks. And a focus on large, already-profitable companies could come at the expense of initiatives that support small businesses, workforce development, and innovation.

At the very least, the announcement is likely to intensify the incentives debate (Washington Post).

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