Conservatives yearning for the 1950s

Trying to preserve low-skilled manufacturing jobs in America today makes little more sense than Friedman’s spoon brigade. And such jobs are only going to become less viable in the face of government policies that make workers even more costly compared to the amount of value their labor provides. This week, Governor Jerry Brown and the California legislature seem to have reached a deal to impose an increase in the minimum wage from its current $10 an hour to $15 an hour by 2022. California is currently home to some 600,000 low-skilled manufacturing jobs. The new minimum wage will put many of those jobs at risk. It makes little difference whether they are taken by robots or outsourced to China or simply eliminated. Those jobs will be gone.

Moreover, many of the manufacturing processes moving overseas are designed to build products not to ship back to this country, but to better serve foreign markets. Shortening shipping distances, avoiding foreign trade barriers, and creating an on-the-ground presence in emerging markets can help U.S. firms sell more products to those countries. In fact, studies suggest that more than 90 percent of outsourcing jobs involves foreign-market considerations rather than labor costs. Slapping tariffs on foreign goods is not going to change that calculation. Indeed, all it would mean is that companies would sell still more of their products overseas and fewer here.

Of course, the change in American manufacturing has been far from painless. Certain cities, regions, and individuals pay a disproportionate price. I was born in a small New England town that was once a center of the textile industry. But within a decade of my birth, that industry and its jobs were mostly gone. At that time they left not for Mexico or China, but for Southern states that had lower wages, lower taxes, and fewer regulations. The destination didn’t matter much, though, for the people left behind. Losing that industry was devastating for the entire community.

But it was also inevitable and had nothing to do with foreign trade.