WW - Those are valid points, although a bit of a wet blanket on good news. It is absolutely true that US (and European) wage standards will not support those low skill/low wage manufacturing jobs (mostly assembly). Luckily, assembly can be automated for a lot of products and I think companies are realizing that the cost of automation, including the reduced number of higher skill/higher wage labor, is still better in the long run than having the work done offshore far away from the target market.
Another benefit of reshoring, that should include jobs, will come from just having the work done here in the US. Innovation happens more where the manufacturing is happening and design is closer coupled to production, and innovation helps drive the jobs economy as new products create need for more resources.
I believe it is also true that there will always be a need for low skill/low wage manufacturing jobs to be done somewhere, but typically for products that cannot command a premium price. Those jobs are gone from the US forever, or until worldwide wages reach some semblance of parity. In other words, not in our lifetime.
It's nice tobuild factories in the U.S.A., nevertheless without people to build subsystems, such as computer systems and elevators, it would seem hard to maintain a larger industrial base.
And our lack of public transportation forcing people to drive to work forces up wages. At least the robots mean fewer people need to drive to work.
Without an overall industrial policy we cannot move forward. Does more industry mean more trucks and more congestion? What do we want to do with railroads?
Are we developing new machinery rapidly enough?
What about an executive class not financially oriented? Is GM a car company or a financial company?
It's too easy just to say build factories. We are at least 50 years beyond the ability to have industry grow just anyway the wind blows.
Even where industry will be located has changed: imigrants went to many marginal places no longer attractive to new generations. Too many peole thnk that an area once full of industry is an automatic restoration.
And cities like Philadelphia, once the largest manufacturing area, is full of service businesses with expensive labor. New York City is the same way. Yet these were the places with public transportation for accomodating a lower cost workforce.
And what do we do with the people not skilled enough to compete for the limited industrial jobs?
My first steps to industrialization involve fundrasing for internships for people who crank wrenches working with racing teams and helping the high school shop departments. And if anyone wants to form a fund to invest in Western Pennsylvania where natural gas is abundent let me know.
I'm also looking into starting a Super Pak to push for industrial development.
Industry is engineering and engineering means industy.
Agree with many comments here. Our best foot forward is to approach the problem with a combination of changes which make the U.S. more attractive. We do have an inherent advantage with shipping costs (with our consumer base) and hopefully energy costs will become an asset. But there is still much to overcome.
Just wait until Obamacare smacks companies. The idea of 'tax' incentives distorts the market and with the current political climate, I can understand the hestitant CEO's. But at least they are giving lip service. In the end, it is about profits and making money. It does not matter if it is the 'evil' corporation or the individual worker, we all want to get ahead and make a little more. If "made in the USA" means better profits (whether it is reduced shipping costs or lower quality costs) then those jobs will be sourced in the US.
I think in some related articles, the need for skilled labor is one possible stumbling block. So real education (and not the go to college just to say you went to college) will be a priority. That means technical colleges, trade schools, internships, as well as traditional colleges need to be affordable (but not just giving them free money by loading students with debt)!
AI, still I feels that wages in china is cheaper or attractive than any other companies. I agree that their wage structure had five fold doubled during last 12 year and increasing at the rate of 12% annually. But one fact is Chinese employs will put more effort in production line than anyone else. I mean they are ready to work for more hours (10-12 hours) with the same salary.
AI, after the announcements of Google for a Made in US product last year, Apple also announces similar decision to shift/focus their production facility to US. These announcements from corporate giants had waved a desi (locally made) movement/feelings with almost all companies and I think based on success rate more companies may shift their operation to US.
Al, I've read some recent discussions of the onshoring trend that say, well, that it's not really clear yet that it *is* a trend. I can't provide any links, but I was reading some articles last week. Apparently, there's some disagreement about how the trend, of there is one, is being measured. Are you aware of the observable phenomena are being measured and can you shed any light on the controversy?
Thanks so much for writing this, Al. I wasn't aware of this trend but it makes complete sense and can only be a good thing for the American economy and for onshore business in general. It also should bolster the adoption in the U.S. of automation technologies that are becoming more innovative by the day.
Fifty-six-year-old Pasquale Russo has been doing metalwork for more than 30 years in a tiny southern Italy village. Many craftsmen like him brought with them fabrication skills when they came from the Old World to America.
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