Obama Promises to Bring Back Manufacturing Jobs, But His Plan Gives More Tax Breaks to Corporations
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For Dean Paulson, 36, his roughly five years at Master Lock have been "a great opportunity." He sees the return of the 100 jobs from Mexico and China as "a positive thing." However, he added, "I wish more companies would do that. The biggest thing for helping the unemployed would be bringing the jobs back. If they don't bring the jobs back, it will be harder and harder for people coming out of school to find decent jobs."
Despite the celebration of Master Lock, other corporations continue to off-shore jobs (three Wisconsin firms have recently announced major job shifts to Mexico) and average Milwaukee earnings have plummeted 21.9 percent since 1999. Master Lock is an oasis amid a barren urban landscape pockmarked by abandoned factories, boarded-up storefronts, cracked pavements and weed-grown lots.
For Milwaukeeans, the inner-city represents a "man-made disaster" of squalor and despair created by government policy and corporate flight to low-wage nations, as UAW International Representative John Drew said at the Master Lock event Wednesday. The plant's zipcode is plagued by 60 percent joblessness, an infant-mortality rate rivaling that of Third World nations, and an appallingly-high incarceration rate.
Given this context, Obama appears to have severely overstated the significance of the Master Lock example. As the New York Times' David Firestone pointed out,
It’s great that the lock factory is now running at full capacity with a workforce of 412, but Mr. Obama omitted a key fact: 15 years ago the Milwaukee factory employed 1,154 workers.
Against these daunting problems, President Obama's chief weapon seems to be the use of tax breaks to punish off-shoring firms and reward in-sourcing corporations. But this seems a very hollow threat (and weak incentive) given that two-thirds of U.S. corporations pay no corporate income taxes at all.
Thus, it was astonishing to hear President Obama repeat a bogus Republican talking point by asserting that "companies that are doing the right thing and choosing to stay here, they get hit with one of the highest tax rates in the world. That doesn’t make sense."
The reality is vastly different, and the president ought to know better. Corporate tax rates for U.S. firms are actually among the lowest among the 30 advanced nations belonging to the Organization of Economic Cooperation and Development, reported Citizens for Tax Justice:
According to a 2007 study by the Bush Treasury Department, between 2000-2005 U.S. corporations paid only 13.4% of their profits in corporate income taxes, well below the Organization of Economic Cooperation and Development (OECD) average of 16.1%.
While this suggests that Obama's central strategy for encouraging the creation of U.S. jobs is fatally flawed, the president is still doing good by raising the need for a strong manufacturing base to central importance, and the hopes of working-class people for secure jobs.
If Obama wins a second term, he may realize he has unleashed popular expectations that will present implacable demands. Perhaps then he won't devote so much of his attention to the needs and interests of Wall Street.