A Slice of Change: The Cost of Bringing Manufacturing Home

One of the most significant forces shaping the price of consumer goods over the last forty years has been the globalisation of manufacturing. Companies chased lower costs around the world—establishing supply chains that spanned continents, where each node was optimised for efficiency, cheap labour, and scalable production.

It worked. Goods became cheaper, margins fatter, and the range of what was “affordable” to the average consumer widened dramatically. A £100 pair of trainers or a £1000 smartphone conceals the fact that only a tiny fraction of that cost—sometimes as little as 1%—goes to the person who assembled it.

But as trade dynamics shift, so too does the equation. Rising geopolitical tensions, pandemic-era disruptions, and new protectionist policies are forcing a rethink. Tariffs and trade barriers, intended to protect domestic industries or correct imbalances, have a side-effect: they wipe out the benefits of low-cost overseas production. The economic case for offshore manufacture becomes murkier. The alternative? Bring production home.

But that’s where a fundamental tension emerges.

Let’s take two familiar consumer goods: iPhones and Nike trainers.

In China, the workers who assemble iPhones at factories like Foxconn earn roughly $3 an hour. In Vietnam, the people—mostly women—who stitch and glue Nike trainers earn between $1 and $1.50 per hour. These are repetitive, physically demanding jobs, often involving long shifts, intense pressure, and little job security. And yet, in many cases, these jobs are highly sought-after, providing incomes otherwise unavailable in rural or undeveloped areas.

Now imagine relocating those production lines to the United States.

The federal minimum wage in the U.S. is $7.25 an hour. The average manufacturing wage is closer to $29 an hour. That’s ten times the cost of a Foxconn worker, and nearly thirty times that of a Vietnamese shoe assembler. The immediate implication is clear: either the cost of goods goes up, or wages go down.

But wages aren’t just a line in a spreadsheet—they’re someone’s rent, groceries, childcare. You can’t fill manufacturing jobs at $3 an hour in a country where rent is $1,200 a month. In other words, you can’t import low-cost manufacturing without importing low living standards—or paying the difference.

It’s also not as simple as just “taking the hit” on product cost. Labour makes up a small part of an iPhone’s total manufacturing cost—maybe 1–2%. Even if Apple moved all assembly to the U.S. and paid fair wages, the result might be a $50–$100 increase per device. A price bump, but not a crisis.

However, because the manufacturing process for iPhones is highly automated and specialised, a shift to U.S. production wouldn’t mean tens of thousands of new assembly jobs. It would bring some highly skilled roles, new facilities, and an uptick in local income tax revenue—but not in proportion to the increased cost. In other words, consumers would face higher prices without a commensurate boost in domestic employment or economic growth. The labour-saving efficiencies that make high-tech manufacturing possible also limit its benefits as a large-scale job creation strategy.

But for labour-intensive products like trainers, where wages are 10–12% of the manufacturing cost, the impact is sharper. Multiply those wages by 20 or 30, and the shoes might cost 50–60% more at retail—unless automation steps in or margins shrink dramatically.

This is not a statement about what should be done, only an observation about what is at stake. Tariffs may protect domestic industry in the short term, but they also signal a retreat from a long-standing economic model built on labour arbitrage. Replacing global manufacturing with domestic production demands more than patriotic slogans—it means confronting questions of cost, fairness, automation, and the true price of what we buy.

We’re used to a world where the cost of goods reflects the minimum someone, somewhere, was willing—or forced—to work for. Change that equation, and everything else changes with it.