The US has higher wages than third world countries for most workers and more than China. So for things that take more human labor, we are disadvantaged if we make them. Those things may be cheaper to but and import. Things with more IP behind them or requiring less labor are more likely to be efficiently produced in the US. So importing those goods that can be much more cheaply in say china or mexico saves everyone in the us from buying a higher made local object.
Tariffs might help a very few people, those working in a factory that makes these 'higher human overhead' objects. But everyone else will (1) first pay more for the object that's probably still not made in the us but not imported at higher cost. Things built by using that now higher priced widget will cost 25% more because of the tariff. so they have to lose most/all profit and/or increase their price, kicking it up the food chain.
So it's a net negative to have tariffs on things that can be made by basic hourly workers. There must be some people helped, like say a steel producer who makes things that was competing with China. But like coal workers, there aren't that many. Remember there are more Arby's workers than coal miners.
Why did Henry Ford pay his workers enough to buy Ford vehicles?
Why is paying higher wages while keeping the money in the community/country a "disadvantage" exactly? Aren't you looking only at consumption without considering production?
Honestly, this sounds like parroted ten year old globalist propaganda. Craft beer has already shot this entire line of argument down, and other industries show signs of beginning to follow that model.
And the sharply increasing cost of long haul as manual truckers exit the industry is hastening the trend in 2018. Historically transportation costs exceeded any efficiency of "comparative advantages".
Henry ford's paying their workers more was considered revolutionary. I am actually in favor of paying people a good living wage, but we have to do something to make it work. I'm a programmer and I bet I make more than someone in India, so I should have to be doing something extra to justify that. I didn't mean to parrot anyone else's ideas, these just seem like obvious idea.
If I was a worker in a factory making things with physical labor, and I have a typical us standard of living, how can I do that more efficiently than someone in china, who gets paid less? I love craft beer, but it's a combination artistic and luxury product. It's not like making ball bearings. It has an aspect of knowing what the micro local market wants. It has a marketing and uniqueness possibly. On the other hand, no one is I know is making craftsman lumber to make houses out of (but they could I guess).
To make a living wage work, we'll actually have to make sure some of the productivity improvements benefit workers. Productivity has grown 6x as fast[1] as pay.
It's not the workers who have to do something extra to justify what they're making.
Ok. So you invest and risk your capital to make your business better and that should somehow benefit people that you pay to do some stuff? People that you need less and less because that's mostly what raising productivity means?
I think the right way is sealing tax system to efficiently gather tax from businesses so that productivity gains can properly benefit everybody and just tax employees less if you want that gains to improve employees wellbeing. Or even subsidise poor people through income tax credit or basic income.
> Why did Henry Ford pay his workers enough to buy Ford vehicles?
Well, the theory was that if his workers could buy his cars he'd make more money.
But that is the same type of logic as selling items at marginal loss and trying to make a profit by moving huge volumes. The fact that it worked so well suggests there was something else going on that I don't know about.
> Why is paying higher wages while keeping the money in the community/country a "disadvantage" exactly? Aren't you looking only at consumption without considering production?
So obviously the absolute number doesn't matter - otherwise we could multiply all dollar figures by 10 at the end of each year and call ourselves wealthy! :D
The relative distribution is everything. The game is to split people up into the nearly-everyone camp who take resources and consume them, and the rare talent camp that can turn resources into more resources. I'll call our rare and talented individuals group 2.
Take a silly example, wood. Give most people wood, and most people can burn it for heat. The more productive individuals can build something out of it, like a house (which is a better long-term investment in terms of conserving heat). Maybe the most productive would turn it into an axe shaft and cut down a few trees, liberating more wood.
The aim of the game is to move as much of societies resources to group 2 as we can reasonably manage, because then we will have massive resource surpluses that we can all enjoy.
"Keeping [resources] in a community" is a fine if your community has a couple of people in group 2 that you can divert them to. Otherwise, you'll find that all your resources get consumed and mysteriously there is no surplus any more. If you give all your resources to productive foreigners, they can give you back the same amount, plus a little extra, and themselves be wealthy. Discovering this little dynamic is the heart of economics.
The downside is that true group 2-ers are rare, and usually busy enough that they aren't very visible. People forget about them and try to divert resources to the deserving but chronically unproductive instead. If it gets extreme, communism happens and everyone starves.
Tariffs might help a very few people, those working in a factory that makes these 'higher human overhead' objects. But everyone else will (1) first pay more for the object that's probably still not made in the us but not imported at higher cost. Things built by using that now higher priced widget will cost 25% more because of the tariff. so they have to lose most/all profit and/or increase their price, kicking it up the food chain.
So it's a net negative to have tariffs on things that can be made by basic hourly workers. There must be some people helped, like say a steel producer who makes things that was competing with China. But like coal workers, there aren't that many. Remember there are more Arby's workers than coal miners.