New economic news today indicates that the economy under the Obama administration continues to improve and the unemployment rate is lower now than before the housing bubble burst in 2007/2008. This is likely confusing news for those who voted based on their perception that Obama had done a poor job with the economy. These indicators should not be a surprise as the economy has been steadily improving.
There is a negative trend if you look closer. The manufacturing sector continues to lose jobs and this trend in the “rust belt” was the focus of the Trump campaign. The recent Trump claim that he had orchestrated the salvage of Carrier manufacturing jobs has been offered as proof of a strategy to reverse this loss of manufacturing jobs and seems to appear as a demonstrate of what Trump has in mind during his future presidency.
Here is the thing about manufacturing jobs. These jobs have been steadily declining for years. Improving technology is partly responsible. As companies have rebounded from the downturn following 2008, they have rehired fewer workers in certain areas. In part, the companies have improved profit margins by doing so.
Keeping manufacturing jobs in the U.S. through a combination of incentives (corporate welfare) and sanctions may save some jobs. However, it will also increase the cost of goods for the American consumer and for international customers buying American goods. The long-term impact on the economy is yet to be determined. Goods will cost more. The subsidies (lower taxes) offered to companies to keep jobs here must be offset in other ways (fewer services or increase taxes in other sectors). Subsidies to businesses have a way of benefitting the companies (owners and investors) as much or more than the line workers (note the results of the banking bailout).
As president-elect Trump has been saying – this is the way business works. Clearly, some will benefit. However, at the level of what is best for the country, any given outcome is part of a much larger system both internal to this country and internationally. I would not be willing to bet on trickle down. It has not worked before and the increased efficiencies provided by technology make it even less likely it will work this time.