It is unlikely that Trump's pricing policies will increase American manufacturing jobs in the “predictable future”: Wells Fargo analysts
The economists of the bank giant Wells Fargo think that Trump administration's pricing policies are unlikely to reshape a large number of manufacturing jobs in the United States in the “predictable future”.
Sarah House, Nicole Cervi and Aubrey Woessner argue in a new analysis This increase in prices and the uncertainty of policies could have an impact on the capacity of American companies to extend the payroll.
“While downstream industries are faced with higher costs, they must decide to absorb them and accept lower margins, transmit them to higher selling prices or a combination of both. None of the Avenus supports employment growth. ”
Economists say that the reshaping of manufacturing jobs would probably take “many years and have a high cost”.
“American labor costs are an obstacle. The manner-to-the world's resting differentials require that American manufacturing companies be very high in terms of capital to compete on a world market. Thus, an expansion of manufacturing employment would require an investment in significant capital.
For manufacturing employment to return to its historic peak, we estimate at least 2.9 billions of dollars of new net capital investments. Although considerable, we consider this estimate as a lower limit. The construction of new capacities would probably take place over several years, with new increases in the intensity of capital and inflation requiring a higher amount. »»
Wells Fargo analysts also note that a drop in fertility rates and a recent immigration reduction may have a negative impact on demographic growth in working age.
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