Republican Senator Ron Johnson exposed himself in a meeting with the President and other representatives when he said, “…it makes no sense to me to try and bring back high labor content manufacturing America…”
Johnson made the claim that industries have not been able to hire enough people to work in American factories. The tight labor market Ron Johnson is opposed to is actually what drives wages up.
Johnson was not the only one against President Donald Trump getting tough on trade, Senator Lamar Alexander (R-TN), Senator Mike Lee (R-UT), Senator Pat Toomey (R-PA), and Senator Roy Blunt (R-MO), all spoke out against America first trade policies because some business rely on imports instead of using American products.
If American factories are having a hard time finding employees to fill their ranks, it is because they are not offering the right compensation that would compel the millions of Americans who have left the labor force to join back in.
President Trump brought this issue up and reminded Johnson that under the current system, companies are competing with the government for people, because the United States welfare system has allowed many Americans to make more in welfare than they would if they had gainful employment. And, the press was right there watching.
Manufacturers note that in order to stay competitive, they can only offer a certain level of compensation. The problem then becomes who are they competing with and how are they able to manufacture at such a reduced cost.
Companies based outside of the United States are pumping their products into our country and are able to sell them at a much lower rate for a multitude of reasons.
One reason foreign companies are able to have major success selling their products in the United States is the fact that they do not have to conform to the same regulations as companies based here in America.
While American companies are not allowed to simply pollute the air, rivers, and ground surrounding them, many foreign nations hold their production facilities to a much lower standard. This makes manufacturing costs in the United States higher than it would be abroad.
Another reason companies can achieve large margins of success in the United States is tariffs. India has a tariff of 50 percent on motorcycles the United States ships into their country, while we do not tax their motorcycles at all when they come shore-side.
This makes American products far more expensive in India and shrinks our market share. Because of this, and because production costs in India are much lower than in the United States, and because they pay no taxes on their motorcycles we import, they are able to unfairly gain market share in our country while eliminating United States competition in theirs.
Many of the countries that are importing products in the United States have much lower wages and standards of living. American auto manufacturers keeping production facilities in the United States are forced to pay Americans a living wage.
This drives companies like Dodge to build plants elsewhere and ship their products in, such as the RAM truck plant in Mexico they currently build pick-ups in for the American market. Mexicans in Mexico work for far less and Americans who are being forced to compete with these third world laborers.
The United States is engaged in several trade deals that are not beneficial to our country. These deals have decimated the manufacturing sector and contributed to the stagnation of wages which has taken place over the last five decades.
Our representatives should be looking to eliminate any trade imbalances that we have between our country and foreign nations in an effort to increase our competitiveness overseas. The United States should work to fix the lopsided tariff arrangements we have with other countries, but these men have other plans. Thankfully, the president sees right through them.
The price of goods will undoubtedly increase if Americans are buying products theta are made here instead of in China. The increased prices, however, will more than be offset by the increase in wages.
If products increase in price by five percent but wages increased 25 percent, the market will be in much better shape and the economy will be far more robust than its current state.
Moving toward these policies will also contribute greatly the United States’ ability to sustain itself because we will no longer rely on other countries for products, raw and otherwise, to meet domestic market demands.
Fixing these main issues is of paramount importance if the United States is going to create jobs and resume our place as a manufacturing powerhouse.
Senators such as Johnson represent corporations whose core values are not in line with the interest of the country. And, President Trump just played them, exposing who they really support.