I think naperlou brings up a good point, which is the trend, to whatever extent it's really going on, that's been shifting jobs back to the US, at one time called "onshoring" or "homeshoring" or variations thereof. Although there's been quite a lot of press about it on and off for several years. I don't know how real it is. But over time, I'd guess that the narrowing pay gap, which is a real phenomenon, would be helping to continue it and perhaps even speed it up.
Good points, Naperlou. I hope you're right that they get better results here. I do wonder about this, though, as I read our articles about the shortage of high school kids willing to pursue engineering paths. If our immigration policies continue to allow companies like Microsoft to bring in loads of non-critical people with H1B visas, why are we sounding the alarm at our engineering schools? If we load up our engineering schools under current immigration policies, will our U.S.-educated engineering students be able to get jobs?
Charles, your point is well taken. I think the employment and underemployment issue is a result of imigration policy. I did some research on H1B visa applications a few years back. I was about to do a contract for an Indian software services firm. What I found was dissiapointsing in the extreme. I looked specifically at Microsoft. They were the largest user of H1B visas that year. None of the jobs I saw were either critical skills or in short supply in the USA. In fact, I found some applicaitons for purchasing agents. The other issue we need to look at is underemployment of engineers in the US. This is especially true of older engineers who have to retire early, or who loose jobs prior to retirement. A study that I saw many years ago, while I was a manager at General Electric, showed that patent production was about as high at the later stage of a career as at the begining. The study showed that mid-career people are more worried about position and advancement, perhaps family, than being creative. Thus, the trend toward early retirements has many undesireable consequences. First,our funding assumptions for retirement do not take into account the longevity. Second, we throw away a large talent pool at a time when they would be even more productive.
Finally, one interesting data point that might bring a little cheer to the discussion. One large company I talked to that has labs all over the world indicated that they have tended to bring the "creative" work back to the USA. What they find is that the pay differential is narrowing and when there is not that inducement to move the work overseas, they get better results here.
In light of globalization, it's like rare than any one particular product can tout all made in the USA or all made in any particular region. Dispersed supply chains mean components are sourced from all over and just because something is assembled on US soil doesn't mean it's all American-made product.
Yes, it's not black and what at all, Beth. It's hard to tell what an American product is these days. Japanese car makers are all over the South, employing American workers. Their shares are scattered through American 401K plans. Meanwhile, American consumer electronics companies are manufacturing their goods in Asia and employing fewer and fewer American workers. At this point, Toyota may be more American than Motorola.
I agree that the American public should demand more domestically-built products. But perhaps it's not such a black and white tradeoff between pushing for environmentally-friendly products and policies and promoting products designed and manufactured in the good old USA.
Ann, there is no incentive to hire or build domestic until we, as consumers demand it. In less than 3 weeks we will no longer have the ability to buy 100 watt incandecsant lights. Argue which ever way you want about the wisdom or folly of the ban, have you seen one of those curly Q's made anywhere other than China? Have you heard a hue and cry from consumers demanding US curly Q's? I'll wager the answer is no. Instead we get ridiculous arguements about what light is better for saving polar bears. Our kids come home crying because their teacher has told them the whole planet is going to die if we do not use the right bulb, while we sit silently by and watch an entire industry disappear.
What CEO in his right mind would stand in front of a board of directors and demand that they continue to produce something that is the subject of mob hysteria? So they wring their hands while sending product lines overseas while some where a collection of tree huggers can congratulate themselves on doing their part in saving mother earth. This same mentality is happening over and over. Government mandate interfers so dramatically with industry that we have almost forgotten when things happened because they were a good idea, not some nebulous pipe dream of a political group. Do you remember when a business had to get bank financing rather than government grants? If I sound cynical it is because I am.
No I do not want to return to high sulphur coal or other such things, so please do not throw that at me. I just want people to demand quality goods made in the USA so my kids will have a chance at my life.
Alex, that's a very heartening article. And it reminds me of the supposed onshoring trend of a few years back for keeping manufacturing jobs here instead of sending them offshore, although I don't think that was in engineering.
If so many executives want to hire American, what's preventing them from doing so?
Good comment, Tool_maker. One thing I'll tell you which I find interesting is that most executives in our industy with whom I've talked WANT to invest in U.S. manufacturing and infrastructure. See this article from July: "Will US Manufacturing Rebound Continue?" I think there is a very slow renaissance/reinvestment in the U.S., which perhaps we won't see until we have the benefit of a little more hindsight. At the same time, there's definitely a corporate reluctance to invest heavily, which stems from uncertainty about the economy.
Alex you have written an excellent article, with many salient comments, however I would like to add one. Unless we are able to restore manufacturing jobs to the US, all of the other things are irrelevant.
In 1990 I was employed by a subsidiary of a Fortune 100 corporation. They were continually expanding, but never with brick and mortar. Only acqusition, followed by consolidation, plant closing and layoff. They sent thousands of jobs to Mexico and seemed to take a particular delight in eliminating union jobs. In a rash moment of foolishness I had the gall to question one of the engineers from corporate headquarters about the wisdom of this. (Titles were very big and important in this place, but I do not remember his title, but he was a much higher pay grade than me.)
At the time I was told there were tax advantages and even though the quality was less and the deliveries poor that would all pick up with experience, because these were unskilled work. When I asked if he was fearful of engineering functions following the production he laughed and said that could never happen. Today we know better.
I do not know how to reverse the trend, but as I said at the outset, without the return of manufacturing, nothing else will matter.
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