Robert Reich: The Ugly Truth About Trumponomics
When Donald Trump spoke at Boeing’s factory in North Charleston, South Carolina—unveiling Boeing’s new 787 “Dreamliner”—he congratulated Boeing for building the plane “right here in the great state of South Carolina."
But that is pure fantasy.
Trump also used the occasion to tout his “America First” economics, stating “our goal as a nation must be to rely less on imports and more on products made here in the U.S.A.”
Trump seems utterly ignorant about global competition—and about what’s really holding back American workers.
Start with Boeing’s Dreamliner itself. It’s not “made in the U.S.A.” It is assembled in the USA. Most of the parts and almost a third of the cost of the entire plane come from overseas.
The center fuselage and horizontal stabilizers came from Italy.
The aircraft’s landing gears, doors, electrical power conversion system—from France.
The main cabin lighting came from Germany.
The cargo access doors from Sweden.
The lavatories, flight deck interiors, and galleys from Japan.
Many of the engines from the UK.
The moveable trailing edge of the wings from Canada.
Notably, the foreign companies that made these parts don’t pay their workers low wages. In fact, when you add in the value of health and pension benefits, most of these foreign workers get a better deal than do Boeing’s workers.
These nations also provide most young people with excellent educations and technical training, as well as universally available health care.
To pay for all this, these countries also impose higher tax rates on their corporations and wealthy individuals than does the United States. And their health, safety, environmental, and labor regulations are stricter.
Not incidentally, they have stronger unions.
So why is so much of Boeing’s Dreamliner coming from these high-wage, high-tax, high-cost places?
Because the parts made by workers in these countries are better, last longer, and are more reliable than parts made anywhere else.
There’s a critical lesson here.
The way to make the American workforce more competitive isn’t to build an economic wall around America.
It’s to invest more in the education and skills of Americans, in on-the-job training, in a healthcare system that reaches more of us. And to give workers a say in their companies through strong unions.
In other words, we get a first-class workforce by investing in the productive capacities of Americans—and rewarding them with high wages.
Economic nationalism is no substitute for building the competitiveness of American workers.