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Steel worker unions and steel makers are running TV ads hoping to persuade you to accept a 40% tariff on the price of imported steel. They claim the tariff is essential for national security - are they right? The tariff would raise the price companies that use steel must pay, though probably not by the full 40%. Still, the price increase would significantly increase the costs faced by steel users and the price of every good that uses steel. At the margin, some steel using companies would go out of business and their employees would lose their jobs. Some goods you would like to buy would become too expensive. This is a price we don't need to pay. The truth is there are many reasons why the U.S. steel industry cannot compete with foreign steel makers. First among these is that the industry IS unionized. The primary effect of unions is to bar workers who would accept lower wages from entering the work force. We have millions of immigrants in the U.S. who would be happy to take steel jobs at lower wages, but steel workers don't want to be forced to seek new jobs in industries where the U.S. is competitive - like computers. A second major reason why U.S. steel makers can't compete in the global market are environmental regulations. U.S. producers face cost-raising requirements like reducing emmissions that foreign producers don't have to comply with. The environmental regulations make steel's argument that it is essential to national security bunk. For example, for years, the U.S. has not been able to produce anchor chain for its ships, not because it didn't have the technology, but because environmental regulations make it illegal to use the forging processes that must be used to make the chain. The U.S. must depend on foreign producers that don't face the same enviironmental regulations for anchor chain. If we wanted to make U.S. steel competitive, wouldn't it make more sense to bust the union and repeal the environmental regulations rather than raise the prices all of us must pay for goods that incorporate steel? Last, even if steel faced no foreign competition, other industries that are important to defense still would. A large part of the industrial base that is essential to making defense products like ships and airplanes is already offshore. For example, the vent motor controllers used on Navy ships are all made overseas, not because the U.S. does not have the technology but because these industries are low tech and pay wages below what U.S. worlkers can earn in more competitive industries. If we're really interested in improving our national security and preserving our economic well being, it would make sense to let industries that can't compete die. Workers in those industries should move to the advanced technologies that make our military the best, like imaging, space, and software. Simple economics means we will always depend on products from foreign nations to provide for our defense. This means we must export our values, to be sure that there are friendly foreign nations. That is the best form of defense. Don't be suckered by union workers who are too lazy to learn more valuable skills. |
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