Wages

As the reshoring gets underway, the big question is how will the US overcome the wage difference between here and different countries. A good example to look at is the garment business in Bangladesh where the minimum monthly wage is $113 or 63 cents an hour. The first step is to understand the inefficiency. The average number of employees in a US textile mill is 13, while in Bangladesh each mill employs 800. The new mills being built in the US get more product per employee. If the US employee makes $50 per hour including benefits the labor cost is $650 per hour while in Bangladesh the cost is $504 (63 cents times 800) per hour. The US is seeing a resurgence in textile manufacturing, including the construction of new facilities. The newer mills are more efficient due to technology and AI. In addition, the transportation cost from Asia is eliminated and that has increased by 300% in recent months. Having mills in the US allows the companies to change styles more quickly which means more sales. The point is that the oft talked about wage discrepancies regarding cheap foreign labor may not be as great as first appears. This means that if tariffs are removed from all sides the US may be able to compete. .