Wages price

Why tariffs? Consumers benefit from low prices from imported goods. If the US wants to make products at home, then the cost of labor will drive up the cost of goods. Improvements in productivity (new equipment and AI) in new US production facilities, along with lower transportation cost from shorter supply chains and lower energy cost (new small nuclear reactors) can offset some of the increased labor cost. New technology from AI can also reduce cost as well as lower energy cost. One way to force the issue is by using tariffs. If some foreign country controls the supply of TV sets and they cut off supply it is an inconvenience but if they control pharmaceuticals or computer chips it can be dangerous. Are the American people willing to pay a higher price to pay workers a higher wage? Recent experience says yes. In 2000 a McDonalds employee earned $6.25 per hour and a Big Mac cost $4.23. In 2022 the wages rose to $12.50 and the Big Mac cost $5.93. Labor costs represents about 30% of overall cost so this is a proportional increase. As reshoring grows, prices will rise and this will cause wage/price inflation. Depending on how long it takes for productivity to catch up, prices will continue to rise. This could be an issue in the upcoming midterms but there are no solutions except for time. The outsiders running for office will not need a solution just the problem.