Biden's inflation plan upends thinking on jobs sent overseas

WASHINGTON (AP) — President Joe Biden has a solution for high inflation that seems counterintuitive: Bring factory jobs back to the U.S.

This challenges a decades-long argument that employers moved jobs abroad to lower their costs by relying on cheaper workers. The trend contributed to the loss of 6.8 million U.S. manufacturing jobs, but it also translated into lower prices for consumers and put downward pressure on inflation in ways that kept broader economic growth going.

It was a trade-off that many corporate and political leaders were privately comfortable making.

Now, with inflation at a 40-year high, the president has begun to argue that globalization is stoking higher prices. That's because proponents of outsourcing failed to consider the costs of increasingly frequent global supply chain disruptions. Recent disruptions have included the COVID-19 pandemic, shortages of basic goods like semiconductors, destructive storms and wildfires and, now, the Russian invasion of Ukraine, which has sent oil prices soaring.

Biden says the federal government can pursue two courses on inflation. It can either pull back on support and cause wages and growth to cool, or it can get rid of the pressure points that can lead to inflation when emergencies and uncertainties occur.

“We have a choice,” Biden said Friday when announcing plans by Siemens USA to add 300 jobs. “The way to fight inflation is to drive down wages and make Americans poorer or have a better plan to fight inflation: Lower costs and not your wages.”

The president then unspooled his thinking that more manufacturing of semiconductors inside the U.S. would lead to more cars and other products being produced domestically. That would fill the supply chain and, in theory, bring prices down.

But this plan would take...