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Labor costs would devour shipping costs instantly. The US is approaching full employment again. Even if we had factory capacity, there aren't 10M spare workers

by tootie 5y ago

Labor costs would devour shipping costs instantly. The US is approaching full employment again. Even if we had factory capacity, there aren't 10M spare workers to do the jobs. Not without wage inflation.

forinti 5y ago
I don't understand why the US doesn't try to make Central America at least moderately well-off instead of building a wall. Here is another chance: put some of the manufacturing in Central America where costs are much lower and there's not much of a distance to market.
- bpicolo 5y ago
  Because the materials that go into production are located in Asia. It's the second, third, fourth order dependencies that are challenging. Relocating would mean both building up entire verticals from raw material and all stages of processing, but also everything adjacent - labor force with expertise, transportation and distribution, etc. This is happening in various parts of the world for various industries, but it's slow and capital intensive.
- cromka 5y ago
  This is the strategy of current administration, see this from yesterday: https://www.whitehouse.gov/briefing-room/statements-releases/2021/12/13/vice-president-kamala-harris-announces-new-commitments-as-part-of-the-call-to-action-for-the-private-sector-to-deepen-investment-in-central-america-now-totaling-over-1-2-billion/ https://www.whitehouse.gov/briefing-room/statements-releases...
- wing-_-nuts 5y ago
  >I don't understand why the US doesn't try to make Central America at least moderately well-off instead of building a wall. Boy wait till you hear about this new thing called 'NAFTA'. Hey, we gutted our manufacturing sector but those folks in northern mexico sure are happy. I'm not anti freetrade, but we absolutely destroyed good jobs open to people without a degree, and then had ivory tower economists tell us it was for our own good. It's not hard to understand why such areas would support a horrible person for president if he acted like he was on their side.
- keyboardCowBoy 5y ago
  Because it's cheaper and easier to build a wall. We can not continue to take in the rest of the world virtually unvetted. Does anyone remember there is a pandemic, housing crunch, and rampant inflation occurring in the US. We should focus on our country at the moment.
cool_dude85 5y ago
Approaching full employment? Again? Take a quick gander at labor participation rates and rethink this prediction.
- thunderbird120 5y ago
  It is approaching full employment, yes. You can see this by looking at U6[1] which includes anyone who has been seeking employment within the previous 12 months but have been unable to secure a job and has not searched for work in the past four weeks. It also includes anyone who has gone back to school, become disabled, and people who are underemployed or working part-time hours. It's down to where it was in early 2019. The Labor Force Participation Rate is not a measure of employment unless you think the employment rate was lower in 2019 than it was in 2008[2]. The pandemic prompted more older workers to retire but it's just continuing an existing trend in an aging country. [1]https://fred.stlouisfed.org/series/U6RATE https://fred.stlouisfed.org/series/U6RATE [2]https://www.bls.gov/charts/employment-situation/civilian-labor-force-participation-rate.htm https://www.bls.gov/charts/employment-situation/civilian-lab...
  - skrowl 5y ago
    Everyone that's looking for a job can find a job (good job market / lots of openings) ..is VERY different than... Everyone capable of working is actually working (full employment)
    - brewdad 5y ago
      By your definition of full employment, the US has never had "full" employment.
      - tootie 5y ago
        There is a canonical definition and that's just that there is no more demand-deficient unemployment. Meaning it doesn't even require U3 to hit 0 let alone LFPR to hit 100%. It allows for churn, underemployment as well as unemployables. It's not a metric of achieving utopia, just a situation with almost no slack in the labor market for employers. https://en.m.wikipedia.org/wiki/Full_employment https://en.m.wikipedia.org/wiki/Full_employment
partiallypro 5y ago
On the contrary, while the market has improved labor participation is way way way below where it was before COVID hit. There is plenty of slack.
- mym1990 5y ago
  Plenty of slack, but those out of the work force need much more incentives to get back in now, which would translate into higher costs as well. Kind of a lose/lose.
- tootie 5y ago
  Anyone not participating isn't slack. Not unless they come back in and it doesn't seem to be happening. I think a lot of people who were close to retirement were pushed over by both fear of death and a crazy bull market fluffing up their 401Ks
missedthecue 5y ago
Even with wage inflation, you're just poaching from other companies creating new vacancies, you aren't creating new humans

by tootie 5y ago

forinti 5y ago

I don't understand why the US doesn't try to make Central America at least moderately well-off instead of building a wall. Here is another chance: put some of the manufacturing in Central America where costs are much lower and there's not much of a distance to market.

bpicolo 5y ago
Because the materials that go into production are located in Asia. It's the second, third, fourth order dependencies that are challenging. Relocating would mean both building up entire verticals from raw material and all stages of processing, but also everything adjacent - labor force with expertise, transportation and distribution, etc. This is happening in various parts of the world for various industries, but it's slow and capital intensive.
cromka 5y ago
This is the strategy of current administration, see this from yesterday: https://www.whitehouse.gov/briefing-room/statements-releases/2021/12/13/vice-president-kamala-harris-announces-new-commitments-as-part-of-the-call-to-action-for-the-private-sector-to-deepen-investment-in-central-america-now-totaling-over-1-2-billion/ https://www.whitehouse.gov/briefing-room/statements-releases...
wing-_-nuts 5y ago
>I don't understand why the US doesn't try to make Central America at least moderately well-off instead of building a wall. Boy wait till you hear about this new thing called 'NAFTA'. Hey, we gutted our manufacturing sector but those folks in northern mexico sure are happy. I'm not anti freetrade, but we absolutely destroyed good jobs open to people without a degree, and then had ivory tower economists tell us it was for our own good. It's not hard to understand why such areas would support a horrible person for president if he acted like he was on their side.
keyboardCowBoy 5y ago
Because it's cheaper and easier to build a wall. We can not continue to take in the rest of the world virtually unvetted. Does anyone remember there is a pandemic, housing crunch, and rampant inflation occurring in the US. We should focus on our country at the moment.

cool_dude85 5y ago

Approaching full employment? Again? Take a quick gander at labor participation rates and rethink this prediction.

thunderbird120 5y ago
It is approaching full employment, yes. You can see this by looking at U6[1] which includes anyone who has been seeking employment within the previous 12 months but have been unable to secure a job and has not searched for work in the past four weeks. It also includes anyone who has gone back to school, become disabled, and people who are underemployed or working part-time hours. It's down to where it was in early 2019. The Labor Force Participation Rate is not a measure of employment unless you think the employment rate was lower in 2019 than it was in 2008[2]. The pandemic prompted more older workers to retire but it's just continuing an existing trend in an aging country. [1]https://fred.stlouisfed.org/series/U6RATE https://fred.stlouisfed.org/series/U6RATE [2]https://www.bls.gov/charts/employment-situation/civilian-labor-force-participation-rate.htm https://www.bls.gov/charts/employment-situation/civilian-lab...
- skrowl 5y ago
  Everyone that's looking for a job can find a job (good job market / lots of openings) ..is VERY different than... Everyone capable of working is actually working (full employment)
  - brewdad 5y ago
    By your definition of full employment, the US has never had "full" employment.
    - tootie 5y ago
      There is a canonical definition and that's just that there is no more demand-deficient unemployment. Meaning it doesn't even require U3 to hit 0 let alone LFPR to hit 100%. It allows for churn, underemployment as well as unemployables. It's not a metric of achieving utopia, just a situation with almost no slack in the labor market for employers. https://en.m.wikipedia.org/wiki/Full_employment https://en.m.wikipedia.org/wiki/Full_employment

partiallypro 5y ago

On the contrary, while the market has improved labor participation is way way way below where it was before COVID hit. There is plenty of slack.

mym1990 5y ago
Plenty of slack, but those out of the work force need much more incentives to get back in now, which would translate into higher costs as well. Kind of a lose/lose.
tootie 5y ago
Anyone not participating isn't slack. Not unless they come back in and it doesn't seem to be happening. I think a lot of people who were close to retirement were pushed over by both fear of death and a crazy bull market fluffing up their 401Ks

missedthecue 5y ago

Even with wage inflation, you're just poaching from other companies creating new vacancies, you aren't creating new humans