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This is not the first company, which I have read about, that is moving their operations back to the USA. We can only hope that the Campaigner-in-Chief is replaced next year so that the new President can repair some of the damage done to the business climate.
This is not the first company, which I have read about, that is moving their operations back to the USA. We can only hope that the Campaigner-in-Chief is replaced next year so that the new President can repair some of the damage done to the business climate.
That is why the administration just passed free trade deals with South Korea, Columbia and Panama. China is just becoming too expensive.
I just don't see the scale of outsourcing, potentially, with South Korea, Columbia and Panama that exists with China. South Korea is higher up the income ladder than China, so I doubt you would see U.S. manufacturing shift there unless it is higher-value items. With Columbia and Panama, you don't see the labour pool size that China offers. And, I suspect, that quality control is harder to maintain in S. America as opposed to China.
An unfortunate, but fortuitous, result of the stagnation of wages in the U.S. will be that it makes us more competitive in labour costs as the standard of living rises in the BRIC nations (and others).
Outsourced manufacturing will likely continue to return to the states. The catch is, it won't create nearly as many jobs as were once required. In fact, most of this reshoring will go largely unnoticed. Technology allows 1 worker to produce the same amount of work that it once took 100 workers to produce 30 years ago. Because of this, manufacturing will never employee 25% of the population again. Most of these jobs will be lower paying "operator" or "technician" level jobs.
Due to the lag involved with shipping goods halfway around the world, it makes no sense to offshore what could be automated. Automation also allows for more competitively priced goods. As the yuan appreciates in value, and wages continue to rise in China, it will make even more sense to reshore. Whatever cannot be reshored will either continue to be done in China, or move to even cheaper labor countries. China is showing major signs of a slowdown, and is looking to join in the global recession. It will be very interesting to see how effectively they respond to this.
This is not the first company, which I have read about, that is moving their operations back to the USA. We can only hope that the Campaigner-in-Chief is replaced next year so that the new President can repair some of the damage done to the business climate.
That is an excellent point RedNC, the moving of manufacturing jobs overseas hit 5th gear way before current administration was in office.
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