The Trump administration continues to pursue the most aggressive tariff policies since the Smoot-Hawley Tariff Act of 1930. The intent of this trade war is to reshore a wide variety of American industries. Reshoring seeks to redress the economic harms that resulted from a systematic effort to move manufacturing to lower-cost labor markets abroad, a process that has been occurring for several decades.<\/p>\n
But in the national debate over offshoring and reshoring, and the factors that lead to our current situation, one issue has been overlooked: the contribution of health care costs to the decision to move jobs offshore.<\/p>\n
Two decades ago, one of us met with a major donor to a university medical center, a textile manufacturer with 1,500 employees in the U.S. That year, health insurance premiums for their employees increased by $1,000 per employee. When they looked offshore, they found they could get the same work performed in a low-wage country for just the per-employee cost of the health insurance increase. Several years later, they had only two employees left in the U.S.<\/p>\n
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