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Scott Lincicome @scottlincicome
, 13 tweets, 3 min read Read on Twitter
And no mention of the pricetag - in taxes & higher prices - of those job "gains"
Newsflash: the Government giving a handful of well-connected companies a tariff-based monopoly in the US market can, believe it or not, increase those companies' output and employment (at least for a while) /2
The problem, especially when it comes to tariffs, is that those new jobs ALWAYS come at a VERY high, direct cost to US consumers and the US economy more broadly. /3
From my 2017 Cato paper: "studies of specific US import restrictions between 1950 and 1990 found that the measures annually cost US consumers an average of $620,000 in current dollars per job supposedly saved in the protected industry at issue"… /4
So now we have a domestic protectionist group bragging about 11,000 US jobs created by Trump's tariffs. What they curiously fail to mention, however, is the price tag for those jobs, in terms of new taxes (tariffs) and higher domestic prices paid by US companies/consumers /5
So this morning I worked up a rough approximation of those costs, using publicly available data on (1) estimated annual increases in steel/aluminum tariffs paid; and, more importantly, (2) estimated additional dollars spent on newly-high-priced steel in the USA /6
(Yes, this is how I spend my Saturday mornings. Cut me some slack.) /7
DISCLAIMER: this is clearly back-of-the-napkin stuff & surely the actual costs are different, BUT this at least gives us an idea of how much these new jobs cost US consumers. And links are provided so you can check my math (if you are really, really bored). /8
So what did I find? Even assuming all 11k jobs are real (some are just announcements), they'd come at a total annual costs of almost THREE MILLION DOLLARS PER JOB: (~25B in higher prices + ~7.5B in tariffs) / 11k jobs = $2.94M/job / 9
To be clear: this is only jobs so far & I'm calculating annual (all 2018) costs, so the pricetag wld decline if more jobs are announced. BUT even if you TRIPLED the number of new US jobs directly caused by Trump's tariffs, it'd STILL cost a MILLION DOLLARS per job per YEAR! /10
And maybe some of the increased prices aren't tariff-related and maybe some of the tariffs aren't actually paid (instead shifting to domestic production). BUT EVEN THEN, you're still talking HUNDREDS OF THOUSANDS OF DOLLARS PER JOB PER YEAR. /11
And this doesn't even consider (1) the current retaliation by foreign governments, hurting US exporters/farmers; (2) cancelled US investments due to policy uncertainty or higher costs; or, of course, (3) the political dysfunction along the way 😉 /12
So, sure, government creating a global tariff wall can increase (at least temporarily) jobs in the protected sector at issue (duh). But there ain't no such thing as a free lunch, and in this case the lunch costs a freaking fortune /fin
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