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 ...
“we’ll probably have to get engineering students from India and Pakistan to run them, as math and sciences are “courses Americans don’t want to take.” “
The USA actually already graduates an adequate number of Science, Technology, Engineering and Math (STEM) degrees every year. Many American kids have seen which way the wind is blowing, or have been well advised. STEM enrollment has been growing for some years. They are hard pressed to find initial jobs because of the many foreigners in the field, but it usually works out for them if they keep pushing. Still works a lot better than a degree in transgender food studies or some such.
By making wide use of several types of visas, tech companies can get the cream of the crop from overseas, for below average US wages. So they get both a quality and a cost advantage.
Additionally, those foreign STEM workers can’t jump ship and take a higher paying job, and take their proprietary knowledge with them - they are bound to the company that sponsored them for the visa, like an indentured servant, if they want to stay in the USA (it is still a great deal for them usually).
In addition to the H1-B visa which gets a lot of press and leads to permanent residency and citizenship, companies also make great use of other visas, which allow them bring the employees of their foreign subsidiaries to work in the US, often for years on end. Their pay is based on the rates in their home country, plus travel and a stipend for living expenses. Many are thrilled to get to visit and train in the States.
Quality counts for a lot in the tech area, where it is not uncommon for a good software coder to be more than ten times as productive as an average one, or where one idea can result in a billion dollars. So keeping the best and brightest coming here is something that benefits the Nation strategically, even if there is some downside as well.
We need to push hard on STEM education regardless, because in ten years, robots will be taking over simple jobs en masse. Google and Uber are working to replace human taxi drivers, starting in just two to five years from now.
Wal-Mart’s website has a Made in America section, last time I looked.
My plant qualifies as a machine shop, and 50% of the workforce is Mexican. Legal Mexican. Try to find a Millenial to do my work, lol.
It is not time to “bring” manufacturing back home to the US. It is way way past time to shred the mountains of regulations and remove or drastically lower the taxes on businesses and capital so that businesses can return to the US and remain solvent.
I can’t blame any company for outsourcing jobs from the increasingly hostile to business environment in this country.
Re: “There are now 5.1 million fewer American manufacturing jobs than in 2001.”
The author does not mention that the total inflation adjusted value of manufactured goods produced in the USA in 2014 was the highest in American history!
No matter how many manufacturing jobs we “bring back” from China, automation and computer software will keep job growth in USA manufacturing near or below zero!
Re: “[USA] societal demand for local, sustainable, and responsible manufacturing is rising.”
Really?
Here in Seattle, any manufacturing facility that pays less than $15 per hour has a workforce that is at least 50% foreign born!
The same fact is true for “locally” grown food.
So, exporting our jobs to foreign countries is bad, but importing foreign citizens to work in our local factories and farms is good?
Yeah, right.
Re: “A final factor is free-falling energy costs...Yet most companies don’t seem to list energy costs as a primary driver of their re-shoring efforts.”
That's because most business managers know that the price of oil and natural gas could go right back to record highs because of embargoes, environmental extremists, or deranged government policies.
Re: “Tech companies can get the cream of the crop from overseas.”
They could if they were willing to pay for them.
But almost all the “cream” come from western Europe, Japan, the English speaking countries, and the oil rich Middle East.
The cream go home, or stay home, because the pay is just as good, or better, than in the USA.
The H1-B program is nothing but Third World engineers and scientists who desperately want Green Cards.
Their skills are average, and they replace 40 year old American born engineers and scientists who cost too much and don’t want to work 60 hours a week.
-—— Moreover, while these jobs will be more rewarding and better paid, they will restore only a fraction of the number of jobs lost-——
His opening statements plainly state that while there will be some return of manufacturing, the status quo ante is not returning. His statements seem to contradict his thoughts further doen in the article.
There will not for instance see a return of the textile industry. We will likely no longer manufacture paint brushes made by Italian manufactured machinery that was shipped to China.
SAP will continue to integrate the efforts of far flung elements of companies operationg on a global scale
Most of the stuff they import are now from Vietnam or Bangladesh.
When did I sell it Todd?
Your subliminal mind can surely solve that one.
Sell it?
BTW my 422 per oz gold is doing just fine.
I confess, not all of it. Ha!
Good, I'm real glad to hear that.
They are hard pressed to find initial jobs because of the many foreigners in the field, but it usually works out for them if they keep pushing....
In addition to the H1-B visa which gets a lot of press and leads to permanent residency and citizenship, companies also make great use of other visas, which allow them bring the employees of their foreign subsidiaries to work in the US, often for years on end.
It sounds like whole 'nother cottage industry...a private sector entity based on the concept of watching foreign professional guest workers who have overstayed their visas. This for the
You must admit that when Gold was taking off you were calling everybody names and ridiculing the “Goldbugs”.
We were correct in 2005. I actually purchased in 2003 at 340. 422 was my last purchase.
I’ll take that margin over the market any day.
(This for the) purpose of creating openings in the field for US citizens.
Can we start with manufacturing a few billion rounds of 22lr please? The fact that America has not been able to get this product on the shelves for five years now is just embarrassing.
Yes I was. Some of their claims were ridiculous!
I’ll take that margin over the market any day.
That's great! Where did you sell?
There is a price point where you can get a stable domestic workforce.
Austin Rare.
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