Ho-hum. Another day, another ill-informed bureaucrat:
To show her support for American workers, President Obama’s labor secretary, Hilda Solis, has junked the standard black limo and purchased a new Chevrolet Equinox to ride around Washington in. The problem: the crossover SUV is built and assembled in Canada from parts also made in Canada.
Of course, the “domestic-content” figure you see on the Monroney sticker includes, by law, Canadian content, and the Equinox, which is considered 66 percent “domestic,” makes a pretty good showing next to, say, Chevy’s Volt, which checks in with 40 percent.
It’s cheaper to build in Mexico, and thanks to 1994’s North American Free Trade Agreement, it comes with little penalty. Labor rates account for less than 10 percent of overall vehicle cost, [Matteo] Fini [of IHS Automotive] says. But within that, the difference is significant. In 2010, Canadian autoworkers averaged $38.77 an hour in U.S. dollars, including benefits. Their U.S. counterparts averaged $33.46. Mexican autoworkers, in contrast, made just $3.75 an hour.
Of course, it might have been better for all involved if instead of engaging in economic nationalist showboating, the Labor Secretary and the rest of the Obama Administration, for that matter used this opportunity to teach people that the world economy is interconnected, that goods and services have a distinctly transnational aspect to them, and that as a consequence, it would be counterproductive (to say the least) to use economic nationalism as an excuse for destructive policies like protectionism, or the imposition of tariffs that lead to a trade war.
But wouldn’t someone have to teach the Administration first?