Peter Whoriskey at The Washington Post:
There is one factory left in the United States that manufactures the basic ironing board, and its survival against Chinese competition demands unrelenting, production-line hustle.
The 200 people at the plant in this small town make their boards very, very cheaply and as fast as 720 in an hour. In three low-slung buildings without air conditioning, coils of cold-rolled steel are cut, welded, riveted and boxed, then loaded onto the Wal-Mart and Target trucks backed up to the loading dock. Paid with piece-rate incentives, workers emerge weary at shift’s end.
“The people on the line are making pretty good money; it can work out to about $15 an hour,” said Dave Waskom, 61, a tool and die maker who readied the plant’s machinery for 37 years. “But they work like dogs.”
Yet loyalty and hard work are not enough.
The company survives in part because it convinced U.S. trade officials that Chinese firms were unfairly dumping ironing boards into the United States at less than fair-market value; in response, the United States levied anti-dumping taxes of 70 to more than 150 percent on its Chinese rivals.
Now, it looks as if the company might get more help: China, under pressure from the United States, has agreed to allow its currency to appreciate against the dollar, a move that would make Chinese ironing boards more expensive for U.S. consumers.
Hamilton Nolan at Gawker:
The Way We Live Now: Wrinkled. Our faces wrinkle from stress. Our money is wrinkled from our tight grasps. And our clothes are wrinkled, because the god damn Chinese are taking over the ironing board industry. Smooth-clothed bastards.
How many ironing board factories would you guess are left here, in America? Twelve? Thirteen? Fourteen? Fifteen? Sixteen? Seventeen? Eighteen? Nineteen? Twenty? Twenty-one? Twenty-two? Twenty-three? Twenty-four? Twenty-five? Twenty-six? Twenty-seven?
Try one, my friend. One ironing board factory, in Indiana, to supply the entire US of A with quality American-made ironing boards. Why? Because entire families in China are willing to live in the dumpsters at massive Chinese ironing-board factories, working on rotating shifts, 24/7, starting at age three, for eight cents per hour, just to flood our fair shores with cheaply-made ironing boards in the special “Chinese” style.
Or so I imagine. Econometrics can be a complicated field. What’s clear is that you, the consumer, are a sheep, easily lured by credit card “discounts” into indebting yourself to the Target Corporation, unto penury. No amount of usurious taxation can stop you from sucking down the soothing smoke of nicotine and fiberglass, rolled by hand, by machine. Though you harbor fantasies of being awarded “The Salary You Want,” you will surely end up receiving only The Salary You Deserve—$138,169 per year. Or, if you’re not a Major League Soccer player, probably around $7.45 per hour.
Today’s Washington Post has a fascinating piece by Peter Whoriskey about the last factory in America that makes ironing boards. It stays in business in the face of Chinese competition only thanks to the fact that it’s persuaded congress to impose an extremely heavy tax “of 70 to more than 150 percent on its Chinese rivals.” If I proposed a 70-150 percent tax on sugary sodas, there’d be a big political debate about it, but this kind of thing goes unnoticed because it’s filed in people’s “obscure trade dispute” mental box rather than their “taxes” mental box. But make no mistake, it’s a tax and it results in more expensive ironing boards.
A soda tax, of course, would have a public health rationale—less obesity, longer lives. The ironing board tax lacks such a rationale. Instead its purpose is to protect the $15/hour jobs of 200 factory workers along with the profits of Chicago-based Home Products International.
What I would like to say is that this is a bad reason to impose extra costs on those of us who iron things from time to time. That if you repeal the tax, the profits will flow away from Home Products International and toward retailers like Target and Wal-Mart. Consumers will spend less money on ironing boards and will either spend more money on other things, or else will save more money generating extra investment funds. Either way, 200 people will lose their jobs but new jobs will be created from the extra investment and consumption financed by cheaper ironing boards. All-in-all, throughout the economy resources would be better-allocated and the vast majority of people will end up better off.
The problem for me is that with unemployment at nearly 10 percent and projected by the Powers That Be to stay above 8 percent for years it’s really hard for anyone to say with a straight face that if the factory closes down the employees will be able to find new jobs.
Katherine Mangu-Ward at Megan McArdle’s place:
Matt Yglesias blogs about the story here, and his analysis is spot on–tariffs cause deadweight losses, keep prices needlessly high, large-scale unemployment tends to inspire more protective tariffs, etc.–but he can’t quite pull the trigger on condemning the whole charade. Why? As Nancy Pelosi would say: Jobs, jobs, jobs. A lost job looms larger in the imagination than a deadweight loss.
Their napkin math, simplified almost to the “assume the horse is a sphere” level, illustrates a very old, very basic idea: A tariff like this one is a rock thrown at America’s front window. Broken windows employ glaziers, but that doesn’t make teenage thugs the drivers of economic growth or defenders of American job security.
Econ 101 aside, though, there’s a more compelling moral reason to condemn this kind of tariff that should help break deadlocks like Matt’s: Jobs lost at home are usually jobs created elsewhere, typically in poorer countries. If anything, jobs are likely to be gained when an industry moves to China, where more aspects of the manufacturing and assembly process are done by hand. They just won’t be created here. If that’s your focus, you have to make the case that American jobs are intrinsically better or more valuable than Chinese jobs.
Talking about American jobs lost to trade is like giving casualty stats for a war and only counting dead U.S. soldiers. It’s inaccurate, and it reveals a skewed, provincial view of the world.
Mark Perry at Daily Markets:
Isn’t this an example of how government trade policy created a coercive, anti-consumer, anti-competitive monopoly? Shouldn’t the Department of Justice investigate?