Labor costs would devour shipping costs instantly. The US is approaching full employment again. Even if we had factory capacity, there aren't 10M spare workers to do the jobs. Not without wage inflation.
Because the materials that go into production are located in Asia. It's the second, third, fourth order dependencies that are challenging.
Relocating would mean both building up entire verticals from raw material and all stages of processing, but also everything adjacent - labor force with expertise, transportation and distribution, etc. This is happening in various parts of the world for various industries, but it's slow and capital intensive.
>I don't understand why the US doesn't try to make Central America at least moderately well-off instead of building a wall.
Boy wait till you hear about this new thing called 'NAFTA'. Hey, we gutted our manufacturing sector but those folks in northern mexico sure are happy.
I'm not anti freetrade, but we absolutely destroyed good jobs open to people without a degree, and then had ivory tower economists tell us it was for our own good. It's not hard to understand why such areas would support a horrible person for president if he acted like he was on their side.
Because it's cheaper and easier to build a wall. We can not continue to take in the rest of the world virtually unvetted. Does anyone remember there is a pandemic, housing crunch, and rampant inflation occurring in the US. We should focus on our country at the moment.
It is approaching full employment, yes. You can see this by looking at U6[1] which includes anyone who has been seeking employment within the previous 12 months but have been unable to secure a job and has not searched for work in the past four weeks. It also includes anyone who has gone back to school, become disabled, and people who are underemployed or working part-time hours. It's down to where it was in early 2019. The Labor Force Participation Rate is not a measure of employment unless you think the employment rate was lower in 2019 than it was in 2008[2]. The pandemic prompted more older workers to retire but it's just continuing an existing trend in an aging country.
There is a canonical definition and that's just that there is no more demand-deficient unemployment. Meaning it doesn't even require U3 to hit 0 let alone LFPR to hit 100%. It allows for churn, underemployment as well as unemployables. It's not a metric of achieving utopia, just a situation with almost no slack in the labor market for employers.
Plenty of slack, but those out of the work force need much more incentives to get back in now, which would translate into higher costs as well. Kind of a lose/lose.
Anyone not participating isn't slack. Not unless they come back in and it doesn't seem to be happening. I think a lot of people who were close to retirement were pushed over by both fear of death and a crazy bull market fluffing up their 401Ks
Here is another chance: put some of the manufacturing in Central America where costs are much lower and there's not much of a distance to market.