THE LOGIC (?) OF DONALD TRUMP

The Donald is going to bring manufacturing jobs back to America…by threat, cajoling, or guilt-tripping.  But who will buy those products?  The average manufacturing wages in America is 10 times greater than China.  And although wages in China are increasing, meaning at some point there will no longer be an advantage to manufacturing there, right behind China is Twain, Thailand, Malaysia, Indonesia where labor costs are one fifth as much as China.  If an east-Asian refrigerator sits next to an American refrigerator and is 1/3 or ½ the cost, what will the consumer opt for?

America has been moving away from manufacturing for decades.  Whereas 50 years ago, one-third of U.S. employees worked in factories, today, 8% of nation’s 131 million workers are employed in manufacturing.

The answer is not to threaten companies with tariffs and taxes, but to invest in the sectors that are growing and the only sector where America has a competitive advantage: the service industry (which now makes up 65% of the economy.

Workers laid off from manufacturing jobs need to be retrained for the jobs of the future, not jobs of the past.

Why hasn’t this happened?  In the EU, .6% of GNP is spent on retraining workers; in the U.S. it is .03 (one-twentieth (5%) as much).  That is the problem, not China or Malaysia or Taiwan or Thailand, nor Mexico or Canada.

Donald trump is halting the progress of growth in America, not helping.  The future is service, robotic, technology not manufacture.  We need a president who looks forward, not backwards.  We need a president who has a brain.

American manufacturing costs may, at some time in the future be cheaper than even south east Asian countries, however, it will not be because American workers are paid less, but because of robotic and smart algorithms.  And yes, what few jobs remain in manufacture will go the way of the horse and buggy.

 

 

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