Weakening Dollar Will Not Create Jobs in the US

Here’s a good article from the NY Times discussing one reason why a weaker dollar will not create jobs here in the US – supply for many products manufactured here are sourced from Asian countries (countries with currencies on the flip-side of the weakening dollar).  In other words, material input cost will grow due to strengthening foreign currencies and offset cheaper input cost of US labor.  

There is another, little-talked-about reason why a weak dollar will not create jobs and make US products more competitive vs. Chinese goods- the supply of Chinese labor dwarfs the supply of US labor (especially “unskilled”) so products that rely on “unskilled” labor will always be produced more cheaply in China regardless of currency fluctuations.  Cost of labor is a function of supply (and demand) and the Chinese have a significant, structural advantage over the US due to its huge population….. no way around it. 

-Valentine

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