Sure, I’ll be happy to explain. There is a misconception that manufacturing jobs are “lost” to other countries when we choose to import goods. In fact, the opposite is true. When two nations trade, both are able to achieve an economic output that falls outside of its domestic gross product. That’s because in any given economy countries exploit their core competency to gain an advantage in trade.
China’s advantage has been primarily low labor cost. Low cost relative to other countries. Economist call this an “unskilled labor.” United States core competency is “skilled labor,” among other things. Every “unskilled job” we export actually creates more than one “skilled labor“ job here at home. I know the “unskilled” part is where a lot of people take offense, but that’s the term.
The real issue is that in any economy there will be those who will not benefit. They will be the economic “losers” even though the nation as a whole is gaining exponentially. Right now, those individuals are the former factory workers, coal miners, steel workers, etc. Now, imagine if we brought all the manufacturing back to America. The economic casualties would be sales people, service personal, logistics workers, etc. There are solution to this problem, but there is no political will to implement them.
So, ultimately it’s what we do for those folks impacted by economic change. We should help, of course. The idea that we should support “buy American” is flawed and not the way to actually help those displaced. If we did this on a large scale, we would quickly give up an advantage that helped us crate the biggest economic engine in the world. In reality we wouldn’t be able to compete on the global stage, real wages would fall, standards of living would fall, inflation would be catastrophic… you get the picture.
