I believe I stated that labor costs in the US is not why our manufacturing base has been in decline. I expressed that point in multiple ways. Unfortunately, many people believe that it is and it’s misdirection.
As I said, the truth of the matter is that all western democracy’s are in decline at the same time. The decline correlates directly with government policy.
You cannot grow any economy with a declining birth rate below the replacement rate.
You cannot grow a economy with a growing government that grows faster than the general economy and that is also carrying a deficit.
You cannot grow a economy where the young find that getting dirty or that physically hard work is beneath them.
You cannot grow a economy when people do not need to work to have a roof over their heads, a large digital TV for entertainment and food to eat. Many people will not work with those circumstances and thus they are a drag on GDP.
My point was, and still is, that wages have zero to do with any of this.
That government policy over decades, does.
As far as off shoring, which has nothing to do with free trade, is concerned. Let me address that since you brought it up.
The costs that are off shored, are generally not directly related to manufacturing cost pie, but are overhead costs associated with some aspect of the business that are considered controllable costs and these costs come off the gross profits on the balance sheet. If you can shave 2-4 percent of a overhead cost, any company would do that without much argument. Overhead costs come off the profitability after you have managed to make your product or service competitive and they are generally value added services.
You have to control them, or simply not do the activity or service and these costs are not part of the labor costs of a product.
These are the activities our companies generally off shore, like customer service, and any other customer related costs associated with marketing or sales overhead expense.
You will not find these expenses in the cost of goods sold column on the balance sheet, so it helps a little if you understand business accounting.
As to manufacturing offshoring, like Apples phones, for example.
Various electronics firms have tried to make complicated or uncomplicated general consumer product here in the US since all the television manufacturers began building sets in Japan and other Asian countries in the 1960s.
We no longer have the willing labor force to do this work, and frankly those who want to cannot even read a tape measure or operate a machine control interface.
Unless the work is related to simple assembly line stuff (mostly done by women), we in the US just don’t have the skilled labor force to do much of this work.
Again....this relates back to my original argument about the welfare state.
Wow, what BS.