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US Manufacturing

  1. Don W profile image82
    Don Wposted 11 days ago

    So one of the goals of the new administration is to "bring back manufacturing jobs". A laudable goal.

    But if the cost of manufacturing something in a foreign country and shipping it to the US, is cheaper than manufacturing it in the US, why would a company bother to manufacture in the US? If the goal of a company is to maximize profits for its owner(s)/ shareholder(s), then isn't it obliged to go with the cheaper option? Can the cost of US manufacturing be reduced relative to manufacturing abroad?

    One of the reasons it's cheaper to manufacture abroad is because some foreign countries have less protection for workers, which means they can be more easily exploited. Another reason is because some countries have low, or non-existent, occupational health and safety standards. So in some countries there are lots of sweatshops where people work in unsafe conditions, sometimes with tragic consequences(1).

    So how does a US manufacturer compete with overseas manufacturers who can pay their workers $1 per day and have zero safety standards?

    You can make it more expensive to manufacture abroad by imposing tariffs on imports, but then other countries can do the same, which impacts US exports. You can encourage domestic manufacturing with tax incentives, but that can only do so much. There still comes a point where the only way to make US manufacturing more competitive in a global economy is to cut wages and cut standards.

    Doesn't it then just become a race to the bottom? And the people who suffer most are ordinary workers. If getting manufacturing jobs back means lower wages and standards, is that a price worth the price?

    What have I missed here?

    (1) https://www.theguardian.com/commentisfr … -economics

    1. 80
      Hxprofposted 10 days ago in reply to this

      I've thought about this as well.  Tax incentives may be the only card the Trump administration can play to draw manufacturing jobs back to the states.  Well, that and reducing some environmental regulations.  Will be interesting to see what Trump has in mind.

    2. promisem profile image95
      promisemposted 10 days ago in reply to this

      The U.S. has had stagnant wages for years except for the very rich. At the same time, countries such as China have had a rapid increase in wages.

      Together they are slowly shifting the economic balance back to the U.S. Or so I have read.

      http://www.usatoday.com/story/money/bus … /83406518/

    3. aguasilver profile image88
      aguasilverposted 10 days ago in reply to this

      Gosh it's hard when reality hits home!

      America and Americans have been worshiping the god of consumerism for so long now that cheap and plentiful has become the mantra sung daily by it's citizens.

      Firstly, America is large enough to function well even if it closed itself off from (or was shunned by) the rest of the world, you would simply adjust your consumption with your real needs and abilities.

      Yes stuff made by American workers would be more expensive unless you reduce labour costs, but so what?

      Get some reality and man up to the fact that you have lived as spoiled brats for 50 years, and the time has come to reassess your living conditions and downsize your appetites and ability to consume everything in reach until you reach a point where your lives resume being balanced.

      Being born in America DID NOT give you all the right to rape and consume the assets of the world in pursuit of the perfect consumer lifestyle you all idolize.

      Those abused third world workers are very content to get their couple of dollars a day, I've lived there, sure the abuse is wrong, but they prefer it to starvation and unlike you lot of 'entitled' folk, they hope to improve life for their grandchildren if they can, their own lives they hold forfeit to fate, they were just born into poverty and servitude and they just rejoice that they are less likely in today's world to be killed at the whim of their master.

      Perhaps Trump, who also understands what real life is about, who also has seen the real world, perhaps he will bring some reality to you Americans, you won't like it, but if you bite the bullet and live withing your means, your own grandchildren may have a chance of living a real life, like the ones your grandparents enjoyed, rather than being battery hens producing profits for the 1% while gorging yourselves on as much corn as you can get.

      1. 80
        Hxprofposted 10 days ago in reply to this

        What your addressing is a spiritual condition that will never be satisfactorily dealt with outside of turning to God.....as a nation that won't happen.

      2. rhamson profile image76
        rhamsonposted 10 days ago in reply to this

        This is not a matter of moral turpitude but of basic economics. It is also you can't put the genie back in the bottle. When a whole economy and other countries reliant on it is established on a concept such as consumerism you can't just turn off the spigot and expect the country to prosper or even thrive without the spigots rewards. Yes there is unbridled greed associated with this with kids in Pakistan and India sewing up soccer balls for $0.12 while the manufacturers charge $70.00 to $100.00 for that same ball. The imbalance has plummeted wages in the US and decimated jobs and growth. This is a race to the bottom and where it stops no one knows. If you look to Trump to erase these inequities you are sadly mistaken because he has been profiting from this arrangement for years and as President I don't see him shooting himself in the foot as even as this is being written he is rewriting the situation to favor himself and many other 1%er's.

        1. 80
          Hxprofposted 10 days ago in reply to this

          Well, I certainly agree with you about trusting Trump.  Trump has benefited, yes, but besides that, even if he wished, he'd be unable to noticeably alter the wage situation.  If he was serious about altering things, he'd be stepping on a lot of toes.  Kennedy is a lesson in what happens when a politician gets too  far out of line.

    4. rhamson profile image76
      rhamsonposted 10 days ago in reply to this

      If the goal of globalization is to lift the third world economies up to a more even standard then why aren't the people of those third world nations paid a comparable wage? Because it is a hoax brought on by BS introduced to Congress by the lobbyists. If we are to have open trade with these countries then let us compete fairly and evenly. Make a prevailing wage clause whereby if we make a product here with a set wage then the foreign nation competing should also pay the same wage to their workers. And while we are at it make the agreement hold the foreign nation to the same safety and health requirements. Just saying..........

      1. wilderness profile image96
        wildernessposted 10 days ago in reply to this

        Good point.

        Base wages
        anti-discrimination laws
        liability laws
        Corporate tax rates
        Anti Trust laws
        Unemployment and workman's comp payments
        Corporate FICA taxes
        And the list goes on and on and on and...

        The point isn't whether the laws are good or bad: it is that the playing field is NOT level, not by a long shot.

      2. Don W profile image82
        Don Wposted 10 days ago in reply to this

        Right, so rather than a race to the bottom, standards get pulled up which benefits workers, and evens the playing field.

        But that's not happening. Companies are simply being asked to return to manufacturing in the US. To do that shareholders would need to either accept a voluntary reduction in profit (unlikely), or consumer prices would need to increase (more likely). But then people will just vote with their feet and buy from competitors who still manufacture abroad (which is why manufacturing jobs were lost in the first place).

        The danger is that Trump tries to take what he (and others) think is the best way to reduce costs: slash regulations. That would be a false economy, because the reduction in costs afforded by lower standards would potentially be offset by the direct and indirect costs of higher accident rates, more instances of work-related ill-health, environmental damage etc.

        Sure you can return manufacturing to the US if you make working conditions the same as in some countries abroad (and I can see how that would benefit business ) but that's not going to benefit ordinary workers much. Hazardous sweatshops, low-paid workers, more work-related accidents and illness and damage to the environment, is a high price to pay for being able to say you returned manufacturing to the US.

        1. rhamson profile image76
          rhamsonposted 9 days ago in reply to this

          Then you agree that to reverse the trend to offshoring jobs under the guise of globalization is a ruse? In reality it is just another excuse to manipulate the country into thinking they are serving a better cause by lifting up lesser economies. The byline has always been that America needs to do this to become more competitive in the globalized marketplace. It is a ridiculous claim as reducing the cost by using foreign labor will never be offset by the expensive costs of American products to compete in foreign countries markets. Are we to believe that producing the household items we import is anywhere competitive as selling them our technologies? How does that compare in the many jobs displaced by it?

          The bottom line is it is a manipulation that ultimately puts more money in the pockets of those who profit from the manipulation rather than those who suffer from the losses..

          1. Don W profile image82
            Don Wposted 8 days ago in reply to this

            The idea that companies are offshoring manufacturing for the benefit of developing countries is nonsense. It's for the benefit of their profit margin. So we agree there.

            But while driving improvement in wages and standards into the supply chain could be an unintended benefit for workers in developing countries, there's only so far you can go with that. For example Apple produces a "Supplier Responsibility Report"(1) which lays out the standards the company expects from its supply chain in terms of not exploiting workers, safety, human rights etc, Apple doesn't (and can't) dictate the hourly rate paid by its suppliers. That's dependent on other variables like the stat of supply and demand for labor in the local market, which is itself affected by population and various other demographics. So wage equivalence with the US is not a realistic prospect, which means the US simply cannot compete with developing countries in terms of cost.

            Low skilled manufacturing jobs will continue to decline in the US, and although some of that is due to offshoring manufacturing, it's also because of an increase in labor productivity due to automation and other advances in technology. That affects workers globally, not just in the US. At some stage in the near future, when those developing countries catch up in terms of technology, low-skilled manufacturing jobs will start disappearing globally.

            So will there be legislation against the use of automation and robots in manufacturing, in order to save jobs? That's not the right approach. Instead the labor force needs to be re-tooled. The next generation needs to be gaining the right skills and knowledge (mechanical engineering, programming, artificial intelligence, robotics etc.) to be able to take advantage of the jobs of the very near future.

            Trump does not seem to appreciate or understand any of this. Hopefully the people advising him do, but I have seen no evidence of that.

            (1) http://www.apple.com/supplier-responsibility/

            1. rhamson profile image76
              rhamsonposted 4 days ago in reply to this

              What is a detractor in this forecast is the need for qualified skilled workers. With the rising costs of living and education in the US how many will be able to afford the training and skills necessary to fill these technical fields? Even now you have college graduates working in restaurants and flipping burgers because either they haven't the skills yet or haven't the right skills to fill these technical fields. Is more student debt in order to fill these slots and what kind of wage will be needed to overcome the debt and higher cost of college and technical trade schools?

              1. wilderness profile image96
                wildernessposted 4 days ago in reply to this

                A little confused.  Joe Blow goes to college and gets a degree in a field with no job prospects, whereupon he cannot fill the job of a skilled laborer so instead flips burgers.  What does that have to do with the cost of education?   Had he learned to do something useful and productive, he could have a job, but that's hardly the fault of the college.

                1. rhamson profile image76
                  rhamsonposted 4 days ago in reply to this

                  I've got a better one. Joe Blow goes to college for what his counselors and high school direct him to. Robotics and off shoring his new profession leaves him penniless without a means to pay the now mounting interest college debt. Not everybody comes straight out of high school and knows what it is they want to do. I know, I know, so what. Right? Life is not fair, right? Nobody owes you a job, right? Whatever hard luck story you have doesn't matter, right? I can't help their stupidity, right? Whatever hard ass answer that comes to mind, right? Right?

                  1. wilderness profile image96
                    wildernessposted 2 days ago in reply to this

                    So Joe made a bad decision - still don't see what that has to do with the cost of education, or even who should pay for his useless education.  Joe could have been trained in auto repair, heavy equipment operation, building construction or any of hundreds of other jobs that cannot be sent offshore.  That he made a poor choice, or accepted a poor choice from a third party doesn't change that.

                    The problem isn't education (we already have too many college grads) or the cost of that education (an enterprising youth can still work their way through college with little debt) - it's that far too many jobs are leaving the country in response to consumer greed and demand for ever lower prices.  That's what must be repaired before any education of most kinds can be considered actually useful.

              2. Don W profile image82
                Don Wposted 14 minutes ago in reply to this

                More troubling than affordability of training is the fact that selling labor for pay, which is how people have sustained themselves for years, is set to be significantly disrupted in the coming decades. When there is no further need for manual labor (or significantly less need) what happens then? For some people a low-skilled manual job is all they can do (not everyone has the aptitude for skilled technical jobs). Are those people expected to disappear?

                Societies have adjusted to these types of shifts before (moving from an agricultural economy to a manufacturing economy, a manufacturing economy to a service-based economy etc.) but there's a difference between changing the type of labor, and replacing labor altogether. Part of the issue is that the pace of technological change is going faster than society can adjust. If that's not addressed there is going to be a large swathe of people for whom there will be literally no jobs available.

                The best way to address that is debatable, but I can't see these discussions taking place at a high level (not even in the last administration). It doesn't even seem to be on the radar. A new sustainable economic model is needed, but for that people need to be thinking in decades (even centuries). Instead, we get 750 manufacturing jobs saved in Indiana. Well whoop de doo. Carrier says those jobs will be lost to automation anyway)(1).

                (1) https://thinkprogress.org/carrier-autom … .q67o961g8

  2. ahorseback profile image48
    ahorsebackposted 10 days ago

    Americans have also lost the advantage of maintaining a good work ethic , most Americans are far more apt to find their comfort zone at work , thus adjusting their productive  output to accommodate their personal "off hours "happiness  .    I have manage working class positions for years  and  all too many workers adjust to a  formula of just enough of a commitment to the "okay" amount of compensation  .     One reason , one hand is always on the cell phone.
    People are more apt to adjust the invested workweek to the available formula of personal , vacation, and comp time , The average American has no clue what the puritan work ethic involved , IMO.   The one advantage and main reason for the acceptability of illegal immigration .   How many times I've heard an American worker say , "I'm not doing that ".
    And they don't.

  3. calculus-geometry profile image86
    calculus-geometryposted 10 days ago

    It needs to be a two-pronged approach, not just giving businesses in the US incentive to manufacture in the US, but educating the consumer public about the horrendous working conditions in overseas factors so that they think twice about buying a cheaper product made in China instead of a more expensive version of the same product made in the US.  And that goes for the people in other developed nations, not just the US.  The developed world as a whole has a problem with outsourcing.

  4. ahorseback profile image48
    ahorsebackposted 10 days ago

    Donald Trump has already created more legitimate jobs than Obama --------and he's not even in office yet !

    1. rhamson profile image76
      rhamsonposted 9 days ago in reply to this

      The great thing about dreaming is that to believe your dream you must never wake up. So keep on dreaming my friend.

      1. rhamson profile image76
        rhamsonposted 8 days ago in reply to this

        I find it funny when confronted with plain logic how the BS stops rather quickly.

      2. ahorseback profile image48
        ahorsebackposted 8 days ago in reply to this

        So apparently you have neither read the news or  watched the economic speculation as of late , the entire economic market is  already  moving after years of stagnation !

        1. rhamson profile image76
          rhamsonposted 4 days ago in reply to this

          The entire economic system? Do you mean the stock market? It has been skyrocketing since Obama bailed it out in 2008. The paper society has done well in the great recession as it is made up of speculation. Talk to Detroit or Cleveland and tell them your story.