A couple weeks ago, Sen. David Perdue had lunch with the Golden Isles Republican Women. It must have been a tough lunch for the Senator. He said some things that I can’t imagine our local Republican women would leave unchallenged.
Since I am not a Republican woman, I did not attend the lunch. But The Brunswick News covered it well.
According to The News, one matter Sen. Perdue discussed was the closing of U.S. automobile factories over the years. The senator lamented the closings and said, “I don’t know how to bring those back, frankly, when you’re dealing with $3 an hour labor in China.”
As my colleague Dr. Skip Mounts points out, running a business and understanding economics are two very different things, and knowledge of one does not translate into knowledge of the other.
With his “$3 an hour labor in China” remark, Sen. Perdue provided local Republican women with a case in point. I’m sure they pounced on it.
The notion that firms in a country with high wages can’t compete with firms in a country with low wages is a zombie: it’s dead wrong but refuses to die.
In the 1800s, Britain was the world’s leading manufacturer. Its firms paid the highest manufacturing wages in the world. The same was true of the U.S. in the 1900s, and it’s still largely true today.
Contrary to what some say, the reason manufacturing prowess and high wages go hand in hand is not tariffs. It’s productivity.
Worker productivity depends on capital, technology and the way production is organized. The better the capital, technology and production organization, the more productive workers are.
And the more productive workers are, the more firms pony up for them.
In the U.S., wages are high because worker productivity is high. In China, wages are low because worker productivity is low.
Plus, on a global scale, a manufacturing wage of $3 an hour isn’t bad. In plenty of countries, manufacturing firms pay workers less than $3 a day. So why aren’t manufacturing firms in those countries driving Chinese firms out of business?
Sen. Perdue also told local Republican women that though it’s common for countries to protect certain industries within their borders, he would prefer not to play favorites.
Indeed, the government should not prop up some industries at the expense of others. But the senator contradicts himself, and no doubt our Republican women called him on it.
If the government should not “play favorites,” why is Sen. Perdue all in for the president’s nationalist trade policies?
Imposing tariffs on steel and aluminum amounts to giving domestic steel and aluminum producers fat welfare checks, paid for by domestic manufacturing firms that make products out of steel and aluminum and domestic residents who buy those products.
Nationalist trade policy is the government deliberately overriding domestic businesses and individuals because “it knows best.” I’m sure our Republican women are against that. They used to be, anyway.
Sen. Perdue also expressed dismay about the amount of U.S. government debt owned by China.
Whoa. Our Republican women couldn’t have let that go by. (China owns $1.1 trillion of the $21.9 trillion U.S. national debt, by the way.)
If the senator is so concerned about China owning $1.1 trillion in U.S. Treasury bonds, why are he and his party so unconcerned that the national debt has grown by $2 trillion in the two years his party has had control of the presidency, senate and house?
We are fortunate to have party members willing to hold the feet of one of their own to the fire.
Reg Murphy Center