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Made in America: Trend against outsourcing brings jobs back from China
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Don't believe everything you thinkThe liminal space Veteran
The United States may be on the verge of bringing back manufacturing jobs from China.
Harold Sirkin, along with Michael Zinser and Douglas Hohner (all experts from the Boston Consulting Group – a leading management consulting firm), says that outsourcing manufacturing to China is not as cheap as it used to be and that the United States is poised to bring back jobs from China. The three consultants first reached this conclusion in a recently published study titled “Made in America, Again: Why Manufacturing Will Return to the U.S.”
Many companies, especially in the auto and furniture industries, moved plants overseas once China opened its doors to free trade and foreign investment in the last few decades. Labor was cheaper for American companies – less than $1 per hour according to the BCG report. Today, labor costs in China have risen dramatically, and shipping and fuel costs have skyrocketed. As China’s economy has expanded, and China has built new factories all across the country, the demand for workers has risen. As a result, wages are up as new companies compete to hire the best workers.
http://rockcenter.msnbc.msn.com/_news/2012/01/14/10156162-made-in-america-trend-against-outsourcing-brings-jobs-back-from-china
Harold Sirkin, along with Michael Zinser and Douglas Hohner (all experts from the Boston Consulting Group – a leading management consulting firm), says that outsourcing manufacturing to China is not as cheap as it used to be and that the United States is poised to bring back jobs from China. The three consultants first reached this conclusion in a recently published study titled “Made in America, Again: Why Manufacturing Will Return to the U.S.”
Many companies, especially in the auto and furniture industries, moved plants overseas once China opened its doors to free trade and foreign investment in the last few decades. Labor was cheaper for American companies – less than $1 per hour according to the BCG report. Today, labor costs in China have risen dramatically, and shipping and fuel costs have skyrocketed. As China’s economy has expanded, and China has built new factories all across the country, the demand for workers has risen. As a result, wages are up as new companies compete to hire the best workers.
http://rockcenter.msnbc.msn.com/_news/2012/01/14/10156162-made-in-america-trend-against-outsourcing-brings-jobs-back-from-china
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Comments
From the average worker's perspective, it's definitely good if some of these manufacturing jobs actually come back to the US, as well as start-ups like the new TV manufacturer setting up in Detroit. Unfortunately, one of the reasons many of them will be returning is that wages in the US are currently so low, and falling even lower.
For example, one article, referencing data recently released by the Social Security Administration, notes that, "The median wage for the 150 million workers surveyed in 2010 was just $26,363.55 per person. For comparison, the poverty line for an average 4-person household is set at $22,350, while the line for a single person living alone comes in at $10,890." Which means that, by definition, "50 percent of wage earners had net compensation less than or equal to the median wage."
Another recent article points out that, "Over the past two decades -- and especially since about 2000 -- the share of national income that flows into wages and other kinds of worker compensation has been plummeting in various countries [here it's dropped approximately 5% or about $500 billion a year since 1990]."
Furthermore, according to a report by the Nation Employment Law Project, close to 75% of the new jobs added in the last two years are below $14 an hour, while, as Alternet's Sarah Jaffe notes, "60% of the layoffs from the Great Recession were in what the report calls midwage occupations, those that make between $28,142 and $42,973 per year."
In essence, the addition of these new jobs, if they do come, will certainly help, especially when it comes to lowering the persistently high unemployment rate we've been experiencing since the 2008 economic collapse. But they're most likely not going to be very high paying jobs, which is definitely good for capital, but not necessarily so good for labour.
And, of course, nobody talking about this seems to care that for every job we gain, a worker overseas may very well lose theirs. So for me, the potential onshoring of manufacturing trend back to the US is a bit of a mixed blessing when looking at the big picture.