Buy American
Buying American has a price.
I took a quick glance at the cost of Asian call centers and the price of sending a container from China to the U.S.
Americans are re-thinking globalism. Politicians on both the populist left (Bernie Sanders) and the populist right (Donald Trump) have made a similar point that global trade creates problems in America. The Democratic establishment under Bill and then Hillary Clinton positioned Sanders as fringe. Trump changed the GOP. He condemns Paul Ryan-style free market conservatism and the GOP has mostly gone along. Market-oriented establishments of both parties were clear about who it was helping -- their donors -- but were in denial about who it was hurting. Trump changed it for Republicans. Democrats, too, are adjusting.
American's like things cheap. Business school economics is at odds with political life on the ground. Workers lose their jobs when factories move to low-wage countries, most conspicuously China. Workers are voters.
Globalized world trade brought some 700 million people in China out of crushing poverty, vastly improving their lives. But it also meant that wages for American workers have been flat for 40 years. Democrats argued that more and better education was the magic bullet. Everyone could go to grad school or coding boot camp. Republican politicians caught on earlier than Democrats that most workers didn't want to change and didn't want to re-train. Republicans, especially Trump, said the problem was external not internal. Don't blame America. Don't blame the worker for being uneducated. Blame Mexico and China.
That economic message lines up with the culture war message. Democrats want to fix Americans of their racism, misogyny, homophobia, right along with their job skills. Blame Americans. Republicans think old-fashioned Americans are just fine as they are. The problems are outside, either with woke ideas by liberals or job-stealing foreigners. Blame them.
I had a recent dose of buy-American reality. I experienced an unsatisfactory call to the help line of ADT, the alarm service for my farm house. A person spoke heavily accented English in a noisy, crowded call center. It wasn't his fault. I blamed ADT. Then I had a good experience when I called ADT the next day, having pressed the menu button for cancelling service. This agent was a native speaker of English in a quiet call center in Texas. ADT was making a business decision. "Help" was overhead, a cost, so go for cheap. "Cancel service" was lost revenue, so go for quality.
Call center employees in the Philippines make about 25,000 Philippine pesos a month, which translates to about $450. Indian call center employees make about 15,000 Indian rupees a month, or $200. So there you have it. The American call center employee is at least seven times as expensive as offshoring it. Hard to compete on price.
I put on a tee shirt this morning. The tee shirt was an American brand made in China. I paid $15 for the tee shirt. Every 40 foot shipping container can carry about 50,000 tee shirts. Costs to ship from ports on the Pearl River Delta to Los Angeles are back to about $2,000. It costs four-cents per shirt to ship it here. The similar container could handle 75 full-size refrigerators, only $30 each on a $2,000-plus item.
Americans who presume that physical distance and transportation costs will protect American workers need to re-think. Free worldwide communication and efficient shipping are probably good things for the world, but not for American workers. Protecting American workers means pitting them against American consumers, ourselves. Americans educated by free-market economics professors need to reflect on the "externalities" they learned about in the same classes. Free trade and a connected global economy creates victims here. They vote.
We have seen in other countries, and now the U.S., that disgruntled people are open to populist demagogues. Trump is a symptom. Indicting and convicting him won't fix the underlying problem that created a large discontented group of people open to a populist demagogue. The politics of a democracy needs to adjust enough to protect democracy. It is in the interest of both parties to facilitate that.