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THE ROSE GARDEN LAST MONTH AND ANNOUNCED HIS TARIFFS ON FOREIGN COUNTRIES, HE SAID JOBS AND FACTORIES WILL COME ROARING BACK INTO OUR COUNTRY. CAN AMERICA PIVOT BACK TO A MORE MANUFACTURING BASED ECONOMY? ARE THERE WORKERS TO DO THOSE JOBS? MARTIN EICHENBAUM IS A FORMER STEELWORKER TURNED ECONOMIST. HE’S THE CHARLES MOSKOS PROFESSOR OF ECONOMICS AT NORTHWESTERN UNIVERSITY. IT’S SO NICE TO HAVE YOU WITH US. PLEASURE TO BE HERE. TALK TO ME ABOUT THE HISTORY OF MANUFACTURING IN AMERICA. LIKE RIGHT THIS MOMENT, WHAT PERCENTAGE OF AMERICANS ARE IN MANUFACTURING RIGHT NOW? 8% OF THE LABOR FORCE ARE EMPLOYED IN MANUFACTURING INDUSTRIES. THE HISTORY IS VERY INTERESTING BECAUSE IT GIVES US A CLUE ABOUT WHAT’S FEASIBLE, WHAT’S POSSIBLE GOING FORWARD. AFTER THE WAR. ROUGHLY SPEAKING, 35% OF THE US LABOR FORCE WAS ENGAGED IN MANUFACTURING AFTER WORLD WAR TWO. IN THE LATE 1940S, YES. SO YOU HAVE 35% DOWN TO 8%. THAT DECLINE HAS BEEN MIRRORED IN EVERY MAJOR COUNTRY, DEVELOPED COUNTRY IN THE WORLD. IT HAPPENED IN SOUTH KOREA. IT HAPPENED. IT IS HAPPENING IN CHINA. SO ALL OF THE RELATIVELY RICH COUNTRIES AND THOSE THAT ARE BECOMING RICH, THEIR POPULATION IS EMPLOYED LESS AND LESS IN MANUFACTURING. AND WHY IS THAT? BECAUSE WE’RE JUST MORE PRODUCTIVE EVERYWHERE AT DOING IT. SO IF YOU ASK HOW MANY PEOPLE DID IT TAKE TO PRODUCE A CAR IN 1947 FOR THE SAKE OF ARGUMENT, LET’S SAY FIVE, BECAUSE OF ROBOTS AND TECHNOLOGICAL ADVANCES, MAYBE TWO. OKAY, WELL, THAT MEANS THOSE PEOPLE HAVE TO GO ELSEWHERE. AND IN A FREE MARKET ECONOMY, THEY GO WHERE THEY’RE NEEDED. WHAT INDUSTRIES DO THEY WORK IN NOW? WELL, THAT’S THE MAGIC OF CAPITALISM. WORKERS DID FIND OTHER TYPES OF JOBS WHICH ARE ACTUALLY HIGHER PAID ON AVERAGE, HIGHER EDUCATION, HEALTH. MOVIES, FINANCIAL SERVICES WORKERS HAVE FLOWED INTO THESE INDUSTRIES. THE ISSUE IS, DO YOU WANT TO STOP THAT FLOW? AND KEEP PEOPLE IN AN ATTEMPT TO KEEP PEOPLE STUCK IN MANUFACTURING? OR DO YOU WANT TO LET PEOPLE GRAVITATE TO WHERE THE THINGS THEY DO BEST? TELL ME A LITTLE BIT ABOUT YOUR EXPERIENCE BEING A STEELWORKER. WHEN I WAS JUST STARTING COLLEGE, I WENT TO MY DAD. IT WAS A TOUGH IMMIGRANT GUY. SO I SAID, DAD, YOU KNOW, I REALLY I NEED A CAR. SO HE CALLED UP A FRIEND THAT HE HAPPENED TO KNOW AND GOT ME A JOB IN A STEEL MILL. IT WAS AMAZING TO SEE WONDERFUL PEOPLE DOING A REALLY TOUGH JOB. SO WHEN PEOPLE SAY MANUFACTURING IS GREAT, IT WAS HARD WORK. THESE WERE REALLY HARD WORKERS. THEY TOOK GREAT PRIDE IN THEIR WORK, BUT IT WAS NOT FOR THE WEAK OF HEART. BUT SOME OF THE NOSTALGIA IS AROUND THIS IDEA OF A PERSON WHO IS WORKING IN MANUFACTURING COULD HAVE A CAR, COULD HAVE A HOME, COULD RAISE A FAMILY, HAVING NOT GONE OFF TO COLLEGE AND HAVE A GOOD LIFE IN AMERICA BACK IN THE DAY. SO IF YOU ACTUALLY LOOKED AT THE CAR THAT THAT PERSON DROVE, IT WAS NOT LIKE OUR CARS. TODAY, THERE IS AN ISSUE OF THE CAR OR THE HOUSE, WHICH IS TINY. RIGHT. THE AVERAGE SIZE OF A HOUSE HAS GOTTEN MUCH BIGGER. BUT AGAIN, WHETHER WE HAVE THE NOSTALGIA OR NOT, WE CAN’T GO BACK THERE UNLESS WE BREAK ALL THE ROBOTS, RIGHT? I DON’T THINK ANYBODY THINKS WE’D BE BETTER OFF IF WE JUST BREAK ALL THE MACHINES. COULD THE MATH WORK OUT EVEN OUR MINIMUM WAGE IN THIS COUNTRY IS MUCH HIGHER THAN OTHER COUNTRIES. COULD YOU PRODUCE A BMW OR AN APPLE PHONE THAT DOESN’T COST $190,000 FOR A BMW, OR $3,000 FOR AN APPLE PHONE? COSTS WOULD HAVE TO RISE WHEN YOU DO ALL THE DETAILS, SO PRICES WILL RISE. AND TO THE EXTENT THAT PRICES RISE ON ALL THESE GOODS, THAT REPRESENTS A WAGE CUT FOR ALL AMERICANS. MARTIN EICHENBAUM IS THE CHARLES MOSKOS PROFESSOR OF ECONOMIC