When Donald Trump unveiled his latest executive order, titled “Buy American and Hire American,” he made only the barest effort to conceal the fact that the announcement was nearly entirely one of theatrics and not of substance. He held his talk in Kenosha, Wisconsin, at Snap-on Tools, a firm that buys Chinese and hires Chinese, Argentinian, Brazilian, and Swedish. Seventy per cent of Snap-on’s sales are in the U.S., but many of its plants are in other countries. There is nothing wrong with Snap-on putting its factories overseas, it just makes it an odd place to hold a Buy American announcement. It’s reminiscent of President Trump’s celebration of jobs at a Boeing plant while the company was laying off workers.
The executive order itself is even more puzzling. It’s not clear what, if anything, it will change. The order states that “it shall be the policy of the executive branch to maximize, consistent with law . . . the use of goods, products, and materials produced in the United States” without setting any measurable definition of “maximize.” This is followed by a confusing timeline—in sixty days, the Secretary of Commerce will lead a team, advised by the Secretary of State and others, that will issue guidance. Then, within a hundred and fifty days, the heads of agencies will explain what they are doing in keeping with that guidance. Sometime in mid-September, we will (or we won’t) hear what the hundreds of agencies in the federal government are doing to meet a confusing mandate, with no obvious targets, that will (or won’t) mean that more Americans have jobs.
Snap-on Tools is actually a good example of why Buy American is a fairly meaningless phrase. It is no easy feat to find a product manufactured entirely of material from the U.S., produced by people in the U.S., using tools made in the U.S. In this sense, the executive order recognizes that no blanket order to buy only American will work. The products we buy are made of raw materials transformed into intermediate goods that are then assembled into a finished product. It’s not possible, or even advisable, to insure that an entire production chain will occur in one country. So a politician who wants to increase the percentage of American-made content in the products that are sold here needs to dig deeper. How will the U.S.-made content of a good be defined? Will it be by weight, by dollar value, by labor hours involved? Each metric would have different findings. A car’s bulk, for example, is primarily made up of steel, aluminum, and glass produced by huge machines with not much labor. However, some of the smaller, fussier bits are made by hand in the U.S. Gas tanks, for example, because of strict emissions laws, are surprisingly complex and require a lot of engineering and manual assembly and are often made in the U.S. A gas tank might be relatively cheap and light, but for American workers it’s worth a lot more than many tons of steel. Very quickly, any discussion of the U.S.-made content of any product will turn to the value of intellectual versus physical content. The U.S. does very well in the intellectual work—the engineering, industrial design, marketing, and distribution—that goes into creating, manufacturing, and selling products. Our Chinese-made iPhones and apparel return much higher profit margins to American designers than to Chinese manufacturers. Many firms now run their design, marketing, and engineering work in the U.S. and move the manufacturing abroad. This makes perfect economic sense, but it adds to the core challenge of the U.S. economy: there are increasing opportunities for people with the kinds of education and skill that lead to new ideas, but there are diminished opportunities for those who turn those ideas into physical products.
Trump focussed on two types of jobs in his executive order: U.S. manufacturing jobs and computer professionals. It was an odd pairing, but both fell, in his logic, under the broad umbrella of increasing work for Americans. The order calls for a review of America’s H-1B visa program, under which eighty-five thousand foreigners, each year—most of them computer professionals of one sort or another—are permitted to work in the U.S.
The question of H-1B visas has rhetorical importance far beyond its actual economic relevance. The unemployment rate for computer and mathematical occupations is, currently, 2.1 per cent. This is what economists consider full employment, meaning that pretty much everyone who wants a job has a job or is in a brief hiatus between positions. The number of jobs in those fields is growing fast—by about twelve per cent a year—and the number of qualified workers is not growing enough to catch up. In short, the plight of computer professionals is on few people’s list of urgent concerns. Yes, there have been rough times in the past, when basic computer-programming work was outsourced to India, Ireland, and Eastern Europe, and Americans with those skills lost work. But, on balance, it is a great time to have a computer-science background. Many American businesses are in the process of transferring their data to the cloud and embracing mobile applications, and we are in the very early stages of the “Internet of Things,” and all these developments require lots of computing expertise. According to the Bureau of Labor Statistics, ten thousand computer professionals start a new job every working day. In this context, the eighty-five thousand foreigners given H-1B visas each year represent little more than statistical noise. Though, of course, the issue was surely chosen not because of statistical analysis but because it offered a shorthand way of saying, “foreigners are stealing your jobs and I am going to stop it.”
There is a real problem in the American economy. For much of the twentieth century, there was a wind at the back of working people—a steady increase in jobs, wages, and opportunity for those with basic education and a willingness to put in a hard day’s work. We have shifted from the era of good work for many to the age of the hustle, where those with luck, good connections, education, and ambition can do far better than their grandparents could have dreamt, while those without see their incomes stagnate or fall and face a future filled with doubt. A sober and serious look at the U.S. economy leads, inevitably, to the conclusion that we haven’t cracked this problem yet. In place of serious consideration from the White House, we have absurdist, self-contradicting theatrics.
