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Why It's Time to Bring Manufacturing Back Home to the U.S.
Forbes ^ | February 2, 2015 | Thomas Roemer

Posted on 02/07/2015 5:52:17 PM PST by 2ndDivisionVet

In the last decade, we’ve lost millions of manufacturing jobs to outsourcing. According to U.S. News and World Report, there are now 5.1 million fewer American manufacturing jobs than in 2001. The lure of low wages, tax advantages, and other cost savings has made for a seemingly straightforward calculus, and manufacturer after manufacturer, supported by intricate spreadsheets, has abandoned ship, until offshoring has become the emerging mantra of the new millennium. U.S. companies that still manufactured locally have slowly become outliers.

Interestingly, this dynamic now seems to be changing, as we’re beginning to see more manufacturing in the U.S. Total output from American manufacturing relative to gross domestic product is back to pre-recession levels, with more than half a million new jobs. According to the Reshoring Initiative, 15% of this job growth results from reshoring alone. There are many reasons for this shift back to the U.S.

More bang for the buck.

The first has to do with cost. It used to be cheaper to manufacture outside the U.S.; now the costs are now converging. In the manufacturing sector, the U.S. is still among the most productive economies in the world in terms of dollar output per worker. To be more specific, a worker in the U.S. is associated with 10 to 12 times the output of a Chinese worker. That’s not a statement about intrinsic abilities; it merely reflects the superior infrastructure of the United States, with its higher investments in automation, information technology, transportation networks, education, and so on....

(Excerpt) Read more at forbes.com ...


TOPICS: Business/Economy; Culture/Society; Editorial
KEYWORDS: economy; employment; jobs; manufacturing
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To: discostu
It’s not going to equate to jobs though. It’ll be automation.

Fewer jobs, different jobs, no doubt. Robots do not unionize, they do not require health coverage, they do not call in sick and they will work 24/7. They do not require maternity leave and they do not drop whatever they're doing at 3:00 because of family responsibilities.

141 posted on 02/08/2015 8:40:10 PM PST by gogeo (If you are Tea Party, the eGOP does not want you.)
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To: P-Marlowe
You want to bring back manufacturing into the United States? Then we either lower our wages down to third world rates, or we introduce tariffs.

I don't think so. The regulatory environment discourages small business formation. I read about it and I live it.

Anybody who has tried to operate a business, anyone who has encountered the business end of government should realize that involving government in business is toxic to business.

There are reasons manufacturing has been offshored. I don't see any discussion of those reasons here.

At least you can count on support from the union bosses...doesn't that make you pause, even a little?

142 posted on 02/08/2015 9:08:31 PM PST by gogeo (If you are Tea Party, the eGOP does not want you.)
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To: central_va
Labor cost is only ONE of MANY component in manufacturing. A TV cost breakdown consists of labor, materials, engineering, taxes, warehousing, overhead, equipment, machinery, electricity,profit , advertising, management.

So, there's no labor component in any of those? Tell us more.

143 posted on 02/08/2015 9:14:00 PM PST by gogeo (If you are Tea Party, the eGOP does not want you.)
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To: zeestephen

Well said!


144 posted on 02/08/2015 9:15:41 PM PST by gogeo (If you are Tea Party, the eGOP does not want you.)
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To: central_va
You think Americans would pick lettuce in 100 degree heat for $15 bucks an hour?

Dream on.

Here is a chart showing the effective wages for doing nothing:

Now admittedly Virginia pays much less than California, but California is where the lettuce grows and here you can make over $17 an hour doing nothing but watching Oprah.

145 posted on 02/09/2015 6:14:18 AM PST by P-Marlowe (Saying that ISIL is not Islamic is like saying Obama is not an Idiot.)
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To: P-Marlowe
OK the average costs per head to pick it and packing it is 3 cents per head. The average retail of a head of lettuce is $2.00 per head.

So labor is a tiny fraction of the cost of a head of lettuce. So lets say current pickers get $15.00 hour which translates to .03 per head. YOU COULD TRIPLE their pay to $45.00 per hour and that would increase the retail price 6 cents per head. This is an increase for sure, but look at gas it fluctuates 6 cents in a day. So the retail price gong from $2.00 -> $2.06 is not going to kill the lettuce market. There is no reason to import the third world to save 3 cents on a 2.00 head of lettuce. Someone has to say no.

146 posted on 02/09/2015 6:30:02 AM PST by central_va (I won't be reconstructed and I do not give a damn.)
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To: central_va

America has been importing field laborers for 400 years. How do you propose they stop?


147 posted on 02/09/2015 6:35:32 AM PST by P-Marlowe (Saying that ISIL is not Islamic is like saying Obama is not an Idiot.)
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To: P-Marlowe
America has been importing field laborers for 400 years. How do you propose they stop?

Just stop issuing visas and close the border. Easy peasy.

148 posted on 02/09/2015 6:39:04 AM PST by central_va (I won't be reconstructed and I do not give a damn.)
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To: 2ndDivisionVet
Looks like we are seeing the biggest increase in manufacturing jobs in 20+ years:


149 posted on 02/09/2015 6:40:01 AM PST by Wyatt's Torch
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To: central_va
YOU COULD TRIPLE their pay to $45.00 per hour and that would increase the retail price 6 cents per head.

Why would I pay someone $45 an hour to pick lettuce when you admit that you would be willing to do it for $15 an hour?

Are you suggesting raising the minimum wage to $45 an hour?

What should the minimum wage be?

150 posted on 02/09/2015 6:43:29 AM PST by P-Marlowe (Saying that ISIL is not Islamic is like saying Obama is not an Idiot.)
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To: central_va
OK the average costs per head to pick it and packing it is 3 cents per head.

That would mean that the average field worker would have to harvest 100 heads of lettuce every hour to make $3.00. To get to $15.00 per hour, he would have to harvest and pack 500 heads of lettuce every hour and roughly 5000 heads every day.

I think your math is a little fuzzy.

151 posted on 02/09/2015 10:55:51 AM PST by P-Marlowe (Saying that ISIL is not Islamic is like saying Obama is not an Idiot.)
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To: central_va

The cost of labor in a head of lettuce would include planting it and maintaining it over months as it grows. Do you think lettuce just pops out of the ground for free??


152 posted on 02/09/2015 11:02:20 AM PST by GeronL
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To: P-Marlowe

picking and packing it is not the only labor involved, it has to be planted and taken care of for months and months


153 posted on 02/09/2015 11:03:41 AM PST by GeronL
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To: Toddsterpatriot
Near-perfect? That's funny.

Not my coinage. Someone in the financial press was describing the information available to big players like Morgan Stanley and especially Goldman. Those big investment bankers have so many contacts over at the Fed (esp. former fellow employees who leak like collanders) that it's like having live video feeds.

Like I said, I didn't make that one up.

154 posted on 02/09/2015 11:11:59 AM PST by lentulusgracchus ("If America was a house, the Left would root for the termites." - Greg Gutfeld)
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To: lentulusgracchus
Someone in the financial press was describing the information available to big players like Morgan Stanley and especially Goldman.

I guess Bear Stearns, Merril Lynch and Lehman didn't have "near-perfect" information?

Did you have any proof of your gold claims?

155 posted on 02/09/2015 11:18:29 AM PST by Toddsterpatriot (Science is hard. Harder if you're stupid.)
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To: Toddsterpatriot
Did you have any proof of your gold claims?

What, you mean the stubs? <snort>

Go look at the gold sites, pick a few well-chosen search terms, and go find and read the same stuff I did. You could start with Silverbear.com, Seekingalpha, and hell, just about any search term with "gold" or "hedge book" in it. It's old news -- where were you? Sneering at real-estate skeptics and Freddie Mac doubters?

156 posted on 02/09/2015 11:35:29 AM PST by lentulusgracchus ("If America was a house, the Left would root for the termites." - Greg Gutfeld)
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To: Toddsterpatriot
Okay, maybe I was a little tough on a fellow FReeper, so a better way to say it would be to offer this online article by a couple of Europeans, and suggest that it contains a number of search terms for further metasearching:

http://www.usagold.com/gildedopinion/siebholz.html

That should get you going.

157 posted on 02/09/2015 11:50:30 AM PST by lentulusgracchus ("If America was a house, the Left would root for the termites." - Greg Gutfeld)
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To: GeronL

I know that. In the end when the supermarket sells the lettuce for $1 the supermarket is lucky to make 4 cents. That single head of lettuce goes through at least a dozen hands before you ever look at it in the store. And by then it might be spoiled.

It is a miracle that it ever makes it to the consumer.

Mr. Central VA thinks that paying field workers $45 an hour would only increase the cost by 6 cents. But if we are paying the field hands $45 an hour, what will we have to pay the truck loaders, truck drivers, warehousemen, buyers and retail clerks? If you are paying $45 an hour for unskilled labor, what will we have to pay for skilled labor?


158 posted on 02/09/2015 11:54:45 AM PST by P-Marlowe (Saying that ISIL is not Islamic is like saying Obama is not an Idiot.)
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To: P-Marlowe

$0.03 X 500 heads/hour = $15.00/hour. That works out to about 10 heads per minute or one head every 6 seconds.


159 posted on 02/09/2015 12:07:36 PM PST by central_va (I won't be reconstructed and I do not give a damn.)
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To: central_va
$0.03 X 500 heads/hour = $15.00/hour. That works out to about 10 heads per minute or one head every 6 seconds.

Is it surprising to you that I read this to mean Islamic beheader pay?

160 posted on 02/09/2015 12:10:44 PM PST by Lazamataz (With friends like Boehner, we don't need Democrats. -- Laz A. Mataz, 2015)
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