In the above-linked article, Jay Foreman, CEO of Basic Fun, Inc., the toy company whose most well-known product is “Lincoln Logs,” whines that the tariffs on China have created “a problem with no solution.” He complains that Trump’s order to American companies to find a new supply chain, preferably in the U.S., leaves him with no good alternatives. If he moves production to another country, like India, he may soon face the same tariff problem there. Move production back to the U.S.? “There’s no labor here,” he says.
“I’m not really sure the American consumer is ready to start making toys in the kind of conditions you might see in factories in India, and there’s no labor here in the United States to manufacture toys,” said Foreman.
In addition to labor condition concerns, Foreman said that moving production to India, for example, is risky because Trump has already criticized that country’s trade practices.
I’m confused. American consumers don’t make toys, especially in India. Workers make things, not consumers. And Indian factories are staffed with Indian workers, not American consumers. I think he’s saying that American consumers might be turned off if they learned that the toys they’re buying are made in deplorable conditions. I suspect that the Chinese factories aren’t that much different.
There’s “no labor here?” What a crock. The U.S. is awash in labor. There are still ten million Americans who haven’t been put back to work since the “Great Recession” in 2009. The only reason that unemployment in the U.S. is so low – 3.7% in July – is that these long-term unemployed have been factored out of the labor force. This is why per capita employment remains approximately 2% below the pre-2009 level. It’s the reason that the American economy is able to add 200,000 jobs every month during this period of economic expansion without any effect on unemployment and barely any upward pressure on wages. The workers seem to appear out of thin air like magic every month. It’s not magic. The workers are here, waiting and eager to be put back to work.
Any time some company executive complains that they can’t find workers in the U.S., it’s because they can’t find workers at the wages they’re willing to pay, which is probably minimum wage or even less, if they could get away with it. Offer $20 an hour, a more reasonable wage for the kind of skilled work required by manufacturing, and see how many workers show up at your door. The impact on product prices would be minimal, and more than offset by rising wages. After all, every consumer is either a worker or is supported by a worker.
Oh, by the way, it’s kind of ironic that Mr. Foreman complains that his toys can’t be made in the U.S. when the most iconic toy in Basic Fun’s line-up, Lincoln Logs – a toy inducted into the National Toy Hall of Fame in 1999, is actually made in Maine by Pride Manufacturing for Basic Fun. And guess what? American consumers still buy Lincoln Logs for their kids. No one complains that Lincoln Logs’ manufacturing should be shipped to China so that they can save a few cents.