This is probably not a holistic view of costs. The EPA and various environmental regulations greatly increase costs, as does the litigation industry with their government helpers who pass legislation to cause lawsuits. Then, there’s the astonishing political environment. I’ve worked at two companies who had protestors outside their doors for months on end.
Amazing that people can afford to be there every day and not have to work for a living, isn’t it?
You’re absolutely right about that. U.S. manufacturing costs may be getting lower when measured per unit of labor or hour, but it’s impossible to accurately gauge U.S. manufacturing costs over the long term because manufacturers here basically have an open-ended, unlimited liability for environmental costs that can’t be measured.
I would assume the authors considered all costs. But perhaps not.
I also assume the comparative costs vary widely by industry, with the numbers cited an overall average.
There are often hidden costs associated with offshoring. For instance, companies that offshore their customer service centers to India often lost business over time because customers swear they will never buy a product again that will force them to try to deal with some guy in Mumbai they can’t understand.
Some of the worst business decisions are made by people based on bad accounting systems. For instance, in my work I see huge builders repeatedly making the same mistakes in building homes. As a result, they leak and they are on the hook for big repair and cleanup costs.
The problem is that the warranty department is a separate division, and the guys who actually build the homes don’t factor in the cost of repairs needed because they don’t take the very limited additional time and effort to do it right in the first place.
Actually, it is - see BCG. But not all states or industries will share equally in the return of US manufacturing. This is one factor behind Gov. Walker’s push for right-to-work status. Another factor is the rising cost of shipping to/from China, and the logistics issues it poses.