{UAH} Can tariffs actually bring back American manufacturing jobs, or is that just wishful thinking?

By Mwene Rugosi 

As someone who makes my living consulting for some of the best manufacturers in the world, the tariffs can absolutely bring back American manufacturing jobs.

But here's the thing: these operations were offshored for a reason and that reason is lower labor costs, along with a casual disregard for the environment and public safety. All of those cost advantages disappear when on-shored.

The DAILY minimum wage in the Philippines, a place where I've worked as a consultant, is between $7.42 to $11 USD, plus a buck or two in benefits such as lunch and uniforms. Typical US factory wages in the US with FICA and benefits roll up to around $50 an HOUR. US based manufacturers do have a couple of advantages. Transportation costs and access to automation are the key ones. But these are still not enough to offset the labor cost advantage.

So when these products are brought back to the US, one of three things have to happen: either raise prices dramatically (inflation), cut wages to far below the poverty line, or more likely, automate those jobs out of existence.

That's the reality. I suspect that the only thing that Trump knows about tariffs is that when we relied on tariffs for revenue people like him didn't have to pay taxes. Didn't even have to bother with tax evasion. Of course, that was in the age of the Robber Barons, and poverty was widespread in this country. The cost was borne by the consuming public, then as in now. And right or left, none of those outcomes are good for OUR country.

"Everyone becomes an expert after the FACT"

 

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