CDZ The price of some stuff if it were made in the USA

Regarding manufacturing, Trump has prattled on and on like a "broken record." Bring it back to the USA he says, and he proclaims that doing so would be better for Americans. For all his carrying on about it, Trump has yet to present so much as one set of empirical figures showing the calculus of how much better it'd be and what makes that claim be so.

Well what would that calculus need to credibly show to be convincing? At a high level (where relevant, assume currency and inflation adjusted figures):
  • If one is the manufacturer:
    1. That the net income earned from producing and selling in the U.S. will be higher than the net income earned from producing abroad and selling in the U.S.
    2. Manufacturers that cannot distribute production across the globe:
    3. That the net income earned from producing in the U.S. and selling abroad will be higher than the net income from producing abroad and selling in the U.S. and abroad.
  • If one is a consumer of manufactured goods:
    1. That the price of US-made goods one will have to buy is less than or equal to what one paid for them when they were made abroad.
    2. That the price of "complementary" US-made goods won't increase the cost of "primary" goods. (E.g., cost of US-steel and steel processing doesn't increase the cost of a skillet or car or whatever; the cost of the can/bottle doesn't make a soft drink cost more)
    3. That one's financial position (net equity as increased by annual net income, after eliminating non-purchase-related effects) will be greater when one buys a given "bundle" of goods comprised of a larger share of US-made goods than when one purchased the same "bundle" of goods having in it a smaller share of US-made items.
    4. That existing US manufacturers of goods they make in the US won't increase their prices in response to increases in the relative price of competing goods that previously were imported "now," being US-made, cost more.
  • If one is a government:
  1. Federal:
    • GDP will increase more than it otherwise would have.
    • Tax + tariff revenue increases or stays the same after adjusting for tax code changes that may apply concurrently with manufacturing legislation and tariff impositions.
    • Tariffs result in companies returning production to the US.
  2. State and Local:
  • GSP and/or GLP will increase more than it otherwise would have.
  • Tax revenue increases or stays the same after adjusting for tax code changes that may apply concurrently with manufacturing legislation and tariff impositions.

I think the above pretty well summarizes what key stakeholders need to know. It's certainly what I'd want to know. Where are Trump's credibly developed figures that identify those things? Show me the figures, the raw data, and the methodology used to obtain the results. That's what I want. I know damn well that economists, accountants and finance people at the GAO, CBO, and a few other gov't agencies have performed that analysis. I haven't seen/heard Trump refer to any of it. I'm willing to entertain the possibility that he's right, but I'm not going to accept that Trump's right merely because he says he's right.

With the high level considerations identified, let's look at something that we can look at: the prices of goods we buy.
  • 2016 -- iPhone

    scenario.12v5.chartx746.png

    • 100% Made in the USA from 100% USA-sourced materials -- Not possible
      Alex King, director of the Critical Materials Institute headquartered at the Department of Energy’s Ames Laboratory says that it's not possible because the iPhone uses 75 of the elements on the periodic table and not all of them are even available in the U.S. For instance, the aluminum uses needs bauxite and there is no appreciable bauxite mine in the U.S.

      iphonecharts2x1108.png

      An iPhone contains most of the elements in the periodic table, including ones not mined in the United States.

      The elements known as rare earths (which aren’t that rare but are tough to mine) would need to come primarily from China, which produces 85 percent of the world’s supply. Neodymium is needed for its magnets, like the one in the motor that makes the phone vibrate and the ones in the microphones and speakers. Lanthanum, another rare earth, goes into the camera lens. Hafnium, a metal that is not a rare earth and is rarer than most of them, is essential for the iPhone’s transistors.

      In other words, “no tech product from mine to assembly can ever be made in one country,” says David Abraham, author of The Elements of Power, a new book about rare earth metals. The iPhone is a symbol of American ingenuity, but it’s also a testament to the inescapable realities of the global economy.
  • Jeans
  • Sneakers
    Shoes such as those made by Nike and other footwear companies are among the things for which the TPP would have removed the current tariff. The Footwear Distributors and Retailers of America on say in 2014 U.S. footwear companies paid $2.7 billion in duties, "more than $450 million from TPP partner countries."

    I don't know about you. I don't wear sneakers except when -- not before, not after, only during -- I'm playing a sport or exercising. The overwhelming majority of people I see going about the business of "living," however, seem to wear sneakers. Most kids pretty much live in sneakers. Make of that what you will....
  • Solar Panels
    Just to illustrate another TPP-related cost, I chose solar panels. The TPP would have lowered tariffs on foreign made climate technologies. A 330-watt mono panel from Canadian Solar — which manufactures most of its panels in China and Vietnam — costs 69 cents per watt. SolarWorld, one of the biggest domestic solar panel makers, sells a similar 300-watt mono panel for 85 cents per watt. Considering the typical home uses 7,000 watts of solar power, that difference translates into a price difference of $1,120. (Call one of their sellers yourself to get your own quote.)
    • Canadian Solar -- made abroad -- $0.69/watt (300 watt panel)
    • SolarWorld -- Made in USA -- $0.85/watt (300 watt panel)
    • Suniva -- Made in USA -- $1.00/watt (330 watt panel)
  • 2014 - T-shirt -- generic example


When thinking about the cost to produce things in different countries, thus the resulting retail price of them, people often mention China. The cost of manufacturing in China is increasing to the point that it's nearly on par (last I heard it's about $6.50/hr) with the lowest cost U.S. factory worker wages, which basically is textile workers. Accordingly, Chinese firms are now building factories in the U.S.
If Trump gets his way and lowers the minimum wage, I suppose more will follow. If they do, don't expect wages to increase. People will get jobs, but they'll be low wage jobs. Maybe that's what people want, but I wouldn't have thought so seeing as those exist now too; it's just that they are service jobs rather than manufacturing jobs.

On the upside, the U.S. is benefitting as other nations see losses in the global competitiveness race.

Shifting-Economics-Glb-Mfg-ex1_large_tcm80-167416.png


Shifting-Economics-Glb-Mfg-NEW-ex6_inline_tcm80-167410.png





Now, if you made the effort to click the links for the above charts and read the content there, what you may picked up on is that the natural ebb and flow of the economic cycle began to once again in 2014 head toward favoring the U.S. Whereas at the start of U.S. manufacturing's wane, the U.S. was seeming losing out to low-cost economies. That led to the "us and them" economic worldview; however, that existentiality is already coming to pass just as did the U.S. heyday in traditional labor-focused manufacturing. According to Boston Consulting:
Years of steady change in wages, productivity, energy costs, currency values, and other factors are quietly but dramatically redrawing the map of global manufacturing cost competitiveness. The new map increasingly resembles a quilt-work pattern of low-cost economies, high-cost economies, and many that fall in between, spanning all regions.​
In some cases, the shifts in relative costs are startling. Who would have thought a decade ago that Brazil would now be one of the highest-cost countries for manufacturing—or that Mexico could be cheaper than China? While London remains one of the priciest places in the world to live and visit, the UK has become the lowest-cost manufacturer in Western Europe. Costs in Russia and much of Eastern Europe have risen to near parity with the U.S.​
Now I know a lot of folks will think that's great. In some ways it is. I have to wonder, however, just how good it'll be. If I'm correct, an American manufacturing resurgence will usher in a truly two-class society in the U.S: millions of low wage manufacturing workers and slightly fewer millions of high wage service sector workers. I think that the class-based schism we saw this past election cycle will get worse, not better, if the U.S. recovers its low-wage manufacturing sector.




Just me sharing:
I've been to Foxconn factory and to Huawei's factory in the neighboring town -- coming off the highway, turn right and everything is Huawei, right and it's all Foxconn...The road signs don't even mention the actual town names...We called them "Foxconia" and "Huaweiville." Each town is 95%+ occupied by the employees of the respective companies. The companies even own the businesses -- restaurants, bars, clothing stores, apartment complexes, etc. -- from which their employees buy "everything." Of course, one can shop and do "whatever" in either town, but for workers at either firm, there's no compelling reason to do so. "Foxconia" has about 400K residents.​
You can see Huawei's campus in the video here. The bit where you see the koi pond is in the "executive meeting compound" on the campus. It is totally separate from the rest of what you'll see in the video. The building at the rear is the exec conference center. The little brown building on the right is the executive dining room (the food is outstanding) and senior VP offices. EVPs and C-Level employee owners (Ren, Madame Sun, and the family members) have bungalows as offices, and, no, they don't live there. The bungalows are nestled under the trees you see on either side of the dining room.​
No one is suggesting the sort of absolutes that this poster is offering
 
Any manufacturing g I. China can be done here for a wage of at least 3x more than its done in China.
 
My God it must be awful to live your life worrying about money 24/7. To punch a time card and an alarm clock button your whole life. then dying 3 days after you retire

i just don't understand and never will
 

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