Tag Archives: Mexico

Trump’s China Fallacy


One aspect of Trump’s victory was his campaign of economic nationalism – that China was stealing our jobs and he was going to bring them back.  Of course, China wasn’t alone in his analysis – Mexico and Ford played a part as well.

The fact is, labor is a commodity and purchasers of labor will buy it at its cheapest.

If we want people to purchase American labor inn greater quantities, we have to make our labor cheaper.

Coyote lists but a few of the ways that we increase, needlessly, that price:

  • minimum wage laws, rising to $15 an hour in many parts of the country, and increasingly draconian overtime rules, both of which substantially raise the cost of hiring someone.
  • minimum benefit laws, including expensive health care requirements in Obamacare and a myriad of other state-level requirements such as mandatory paid sick leave or family leave
  • payroll taxes that act as sales taxes on labor  — we understand that cigarette taxes are supposed to reduce cigarette purchases but don’t understand that payroll taxes reduce purchases of labor?
  • employment regulations, such as chair laws and break laws in California, that make employing people more expensive and risky
  • employer liability laws, that make employers financially responsible for any knuckleheaded thing their employees do, even when these actions violate company policy (e.g. making racist or sexist statements)**
  • laws that make hiring far more risk, including those that limit the ability to do due diligence on potential employees (e.g. ban the box) and those that limit the ability of employers to fire poor performing employees.

We have yet to see how a President Trump will work to try and make the cost of American labor more equitable.