Overblown ogre of 'outsourcing'

The Washington Times ^ | 18 Aug 03 | By Bruce Bartlett

[.cnI redruM]

Everybody seems to be worried about manufacturing these days. All the Democratic presidential candidates condemn the practice of "outsourcing"

[.cnI redruM]

Another myth exposed. Gephardt should read it and weep. We produce a higher percentage of our GDP through physical manufacturing than we did when we had mobilized to fight the Nazi's in WWII!

[ChromeDome]

ping

[tkathy]

There is a lot more to outsourcing than cutsey little statistics. This is a serious problem, and the party that puts out phoney spin is going to lose big time.

[jim_trent]

> Remember, what really matters for employers is not absolute wages, but unit
> labor costs — how much the labor costs to manufacture a given product.

Reminds me of the old Fruehauf Corporation ( an over-the-road trailer manufacturer). They decided to close down the Fort Wayne manufacturing plant and open one in Scott County Tennessee. The wages were $11 to $14 in Ft. Wayne and were $6 to $8 in Tennessee (this is in mid-1970's dollars). They figured that they would save $1,000 per trailer.

Unfortunately, they were never able to match the hours needed to produce the trailer -- even with brand new equipment and a year and a half of ramping up the speed (to get the workers ready). The Tennessee plant took more of those lower cost hours to make each and every trailer. The cost savings was not there. Makes me wonder about sending work to Mexico or India.

Fruehauf is now out of business and the last I heard, the Tennessee plant was closed down. So much for low wage rates.

[kms61]

"The truth is that manufacturing is doing just fine in every way except employment."

Other than that, Mrs Lincoln, how was the play?

The free trader pundits clearly are feeling the heat and have their talking points. What they fail to comprehend is that none of their statistics mean a damn thing to a man whose job has been outsourced.

If the Republicans don't get a handle on this, come November 2004 they'll be trying to get the license plate number of the truck that hit them.

[Uncle Miltie]

"The truth is that manufacturing is doing just fine in every way except employment. However, few economists would judge the health or sickness of any industry solely based on employment. By that standard, agriculture has been the sickest industry of all for decades. Rather, such things as output, productivity, profitability and wages better determine industrial health. On this score, manufacturing is actually doing quite well in the United States."

Exploding Heads Alert!

[.cnI redruM]

exactly. That's why the US produces a greater proportion of it's GDP in factories today than it did in WWII. People try outsourcing and come back when here when they want to produce something that has enough quality to market somewhere other than Walmart.

[.cnI redruM]

What's so phoney about those statistics? Refute them with an objective rather than a subjective sritique that suggests the decline and fall of US manufacturing. If the US is producing a greater proportion of it's economic wealth via manufacturing than it did in either WWII or The Gilded Age, how is the manufacturing sector actually in decline?

[BlackbirdSST]

Spin it any way you want it. Blackbird.

[Cronos]

No, it isn't in decline. BUt the gloom n doomers and the anti-Bush, anti-Americans here would like you to think so and they'd like their socialist agendas put up including protectionism and tariffs and high taxes.

[.cnI redruM]

Percentage of GDP produced in factories 2003 - 39.6%.

Highest percentage of GDP produced in factories during the 40's - 35%.

Highest percentage of US GDP produced in factories ever (2000) - 40%.

A 0.4% decline in the proportion of GDP produced in factories over a three year period is not a deep and fundamental change in our national economic paradigm.

Spin it any way you choose. redruM.

[ChromeDome]

Remember, what really matters for employers is not absolute wages, but unit labor costs — how much the labor costs to manufacture a given product. If a U.S. worker is 5 times as productive as a Mexican worker making one-fifth as much, they are exactly equal from the point of view of a producer.

Great, so you only have to work 5 times harder than everyone else to have a chance. Sounds fair to me </sarcasm>

[mhking]

Notice that they've completely ignored the effect of outsourcing on the high tech sector...

"It's OK, you can ignore it now..."

[scottlang]

Yes, exactly. People are feed up with it. I know of several that are for the first time in ages considering voting for dems because of how they feel Bush has screwed up the economy. To quote one, "If a conservative is a liberal who has just been mogged, a liberal is a conservative who was just laid off because his job is going to India."

[maui_hawaii]

However, few economists would judge the health or sickness of any industry solely based on employment.

Its the 1000 pound gorilla though.

Fortunately those out of work can vote, and those companies and corporations can't.

[Walkin Man]

The truth is that manufacturing is doing just fine in every way except employment.

I'm sure that will make the millions of unemployed sleep better at night under the overpass in their cardboard boxes!

[.cnI redruM]

Ever heard of leveraging technology? Work two times smarter and your easily five times more productive.

[maui_hawaii]

"conservatives" in denial BUMP

[Lazamataz]

"It's OK, you can ignore it now..."

Actually it would have been much funnier if they had written:

Outsourcing Not Found. (A)bort, (R)etry, (I)gnore?

[Lazamataz]

There is a lot more to outsourcing than cutsey little statistics. This is a serious problem, and the party that puts out phoney spin is going to lose big time.

It seems to be our guys.... I've got a bad feeling about this....