Nuts, Bolts, and 5% — Fiscally Speaking

Everything made in America is more expensive, right? So why would anyone build a home with only American-made materials?

We’ve run our numbers, and we fully intend to build The All-American Home for about the same price as any other home of comparable size and quality. Just watch us, and if you have any product suggestions, go ahead and shout them out below!

OK, so even if the price is the same, all the research we’re doing to find American-made products is time consuming. Our subcontractors are incredible to go along with this, documenting every single item they put into the house.

Who in their right mind would want to build like this? All jokes about our sanity aside, let’s do some quick math. In 2010, residential construction contributed $2.1 trillion to the US GDP.

$2.1 trillion is a lot of dough. For comparison’s sake, last year home construction brought in as much money as the entire nation of Great Britain. While that’s quite an accomplishment, we as builders could be doing more for our nation’s economy. Most of us buy our materials with a close eye to price and quality, while completely forgetting to ask where the product comes from.

The All-American Home will prove that you can meet quality and price objectives while buying American. But you don’t have to go crazy like us, documenting every nut and bolt to make sure your project is 100% pure American.

With a small amount of effort, any builder can reallocate 5% of construction costs from foreign-made products to those made right here at home. It’s only 5%, but remember, that’s 5% of the equivalent of Britain’s GDP — $14 billion — being redirected back into Americans’ bank accounts.

Now we have to figure that some of that money will go to pay for raw materials, operation costs, machinery and profit. But let’s get conservative and say that only half of it goes to payroll.

How many people could that $7 billion directly employ, people who’ll work in the plants that already make nails and lightbulbs and hinges and refrigerators? Let’s say the workers earn, on average, $40,000 per year.

$7 billion divided by $40,000 per job equals 175,000 jobs. That’s about the same as the population of Providence, Rhode Island.

The wonderful thing is that the job creation won’t stop there, because there will now be 175,000 more people with disposable incomes. They’ll need houses close to work and cars to get them there. They’ll buy computers and TVs and they’ll go out to restaurants. All of that new demand will create more jobs, which will create even more demand.

According to XXXX, the creation of every automobile factory job indirectly creates nine other jobs. Let’s get conservative and say only 5 jobs are created for every construction product factory job.

175,000 times 5 equals 875,000 jobs. By comparison, the entire population of San Francisco County in California is 805,000.

That’s an awful lot of jobs. But again, we have to be honest about the situation. The US labor force is around 150 million people, so 875,000 jobs only accounts for one half of one percent of them. Bottom line, this movement, if it remains only within the ranks of residential builders, won’t be enough to create an economic boom.

But what if the idea of 5% spreads across all industries? We have a GDP of $15 trillion. If you went through all that math again, you’d end up not with 875,000 jobs, but nearly 3 million — enough to drop the unemployment rate some where around 5%!

Your 5% shift could easily get us back to 5% unemployment.

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