While you’re not wrong about people’s motivations, or the market’s sentiments, I do think this isn’t the right take on globalised industry. There’s no need to close US factories and move workers - it will happen naturally. For example, nobody closed US auto factories to move production to Japan - the Japanese out-competed the US on price and quality. The same is just starting to happen with electric cars now. Greed may have accelerated this transition, but it was inevitable.
People who want access to a 1.2 billion person market, 350 million of which are living close to a first-world lifestyles.
Where are these factories moving? Poorer countries in Asia. Vietnam, Thailand, etc. It's purely a cost-saving measure, due to the rising wages in China.
Despite much wailing and gnashing of teeth about the trade war, those jobs aren't coming back to the US. If neo-liberal economics, and nationalism continues to be a popular in the United States (I predict they will be), its only a matter of time until we'll be talking about a trade war against <The new China>.
> It's hard to just pick up and switch when you are so entrenched.
Companies play arbitrage with the costs of doing business in different countries all the time. Union issues at your plant in Mexico? Close it down (taking a "loss") and switch production to India, or China. It happens all the time as externalities change the profit equation, companies will and do react accordingly.
Raise costs and they export even more jobs. As many as possible.
I see it in what I am doing every day. I truly want to manufacture in the US. I really do. I am angry about this whole situation because of it. Stupid policies prevent me from having the option to manufacture in the US. Policies that are so destructive that you are left with no option but to send the work to China. The only other option is to go out of business.
I do not want to do this! Yet my government and the ignorant masses who vote for them and support their ignorant ways effectively forces me to take that path. It does not have to be this way at all. Yet, on the current path, things are not trending towards getting better at all.
My partners and I have already discussed moving all manufacturing to China. All of it. Just like Apple, we would design here and manufacture there. I am the only one who is stubbornly holding that decision back. And I know I am going to lose. There's nothing I can do about it. It's like fighting the laws of physics. And then I post here and people who don't have a clue refuse to even think about this and attempt to understand. How have we become so ignorant.
It isn't about a single policy. It isn't just about minimum wage. It's death by a thousand cuts.
I'll give you another example that won't be popular. What we are doing with the southern border is absolutely criminal. I haven't kept up with numbers. I think the last estimate I read was that over 1.5 million people got in...and that's the ones we know about.
BY DEFINITION: Every single one of them is unemployed. Yet, they are not counted in unemployment statistics because, well, they don't exist. Even worse, we are not creating 1.5 million NEW jobs per year for them. If we were, there could be justification for accepting people with the right skill sets. We are not. Which means we are importing unemployment. We might even be importing people who will be abused and work for menial wages in the shadows. No matter how you look at it, this isn't a plan for economic growth and stability at all. We are losing jobs and we are importing unemployment.
What's another layer of stupidity? Energy policy. It is beyond belief that we are letting people like AOC even have a word in this conversation. Solar energy is fantastic. I built a 13 kW array. As an engineer, I know everything there is to know about solar and then some. I also know that we need to build nuclear power plants like there is no tomorrow. Solar is far from clean. A solar power plant equivalent to a nuclear plant consumes so much land and resources most would be horrified. Not to mention effects on wildlife, etc.
If we are going to achieve the dream of converting our ground transportation fleet to electric vehicles we are going to need to DOUBLE our power generation capacity (and power transmission infrastructure). You cannot do this with solar. Solar is unreliable and expensive. You have to do it with nuclear, at least a majority of it. That means duplicating the entire US's power generation capacity. We need twice the power. That means we need an ADDITIONAL 1200 GW. A typical nuclear power plant is rated at 1 GW. Yes, that means we need to build somewhere in the order of 1000 nuclear power plants, or maybe 500 and make-up the rest with solar, natural gas, etc.
The other one is the war against oil. This is so ridiculous it hurts to even think about it.
Simple concept: We all want clean cars and clean energy. At scale (300 million vehicles) this means undertaking the largest set of infrastructure projects in the history of this nation. Yes, heavy construction and manufacturing throughout the land.
What do we need to move materials, dirt, concrete, rebar, solar panels, grade and dig the land, etc.? OIL! With oil at $130 per barrel there is no way in hell we can afford the infrastructure development that would be required to transition a nation like the US to clean energy. We need $20 per barrel oil for 25 years. With a mission. In other words, it can't be about lower the cost of oil so we can have cheaper gasoline and diesel. It has to be: We need cheap gasoline and diesel so we can build thousands of solar, wind and nuclear power plants as well as upgrade our entire power delivery infrastructure over 25 to 50 years so we can transition to more those power sources.
Once again, politicians drive the narrative that is most convenient for them in order to secure jobs and remain in power until they retire with nice benefits and pensions. The carnage and long term destruction they create is lost on everyone living for the moment. Sadly, most people don't exercise much in the way of critical and strategic thinking when they vote for and support these charlatans.
Anyhow, yeah, I am angry and frustrated because I want to work in my country and create jobs here but my government and the people who support their dumb policies prevents me from doing this. Even trying to educate people about these realities is futile.
What happens to a lot of business owners --after getting tired of hitting their heads against the wall-- is to capitulate and take a "if you can't beat them, join them" position where they make good money for themselves and stop caring about not being able to create jobs and build full companies here (or in Europe, same problems).
And who in the US will do the work? It's not just the jobs that went overseas, it's also the factories, the molds, and the skills, on top of that we all apparently want cheap stuff.
The primary reason the US lost so many manufacturing jobs since the peak, wasn't China, it was persistent gains in manufacturing productivity.
At the exact same time that is occuring, and while domestic economic growth slows, you import millions of low skill laborers into a declining or stagnant labor demand situation (for that type of labor). What is going to happen? It's obvious: wage suppression due to labor over-supply.
It is simple supply and demand.
Tech workers have gotten to see this up close & personal, as companies from IBM to Microsoft intentionally imported lower cost foreign engineer labor to undercut higher cost domestic engineers.
It's why the Koch brothers are such big fans of unlimited low-skill immigration (and why so many business Republicans love it, that by itself should throw up a red flag), the entire point is to hold wages down and hold down business costs to maximize corporate profitability.
This is also why almost no other developed nation allows unlimited or large amounts low-skill immigration, including Canada. Most developed nations use either a ridiculously strict approach to any immigration (eg Japan, and presently Scandinavia), or specifically operate a skill restricted / merit-based immigration system (eg Canada and Australia).
If we work hard to bring all these manufacturing jobs back, won't this just increase the cost of goods by a great deal, and make people upset because of that? Sure, shipping goods from overseas isn't free, but it still seems like US workers will not accept wages that will keep prices as low as they are now. And I don't blame them; I imagine the salary of your average factory worker in a developing country wouldn't get you very far even in areas in the US with a pretty low cost of living.
Then again, I guess it's better to have a job but be unable to afford the the latest and greatest toys, than it is to just not have a job at all.
If a union wants to negotiate, then you just move the manufacturing to a cheaper country. There is plenty of labor willing to work at a lower price, and that is what happened.
So essentially you're saying, between rising minimum wage, other government involvement, various economic reactions, competition between companies, and the customers desire for cheaper products drives production overseas?
If American society insists that we legislate ourselves into a more comfortable environment (higher min wage, better working conditions) then I think we'll have to accept that certain production will just never happen here.
Offshoring is not magically cheaper. Why do you think manufacturing in the US might be more expensive? One quite possible reason is "some weird pretentiousness of the American workers".
The downstream reality of globalization and JIT. Push domestic labor overseas to eek out more profits, the products reduce in quality, and you get the surface-level appearance of making more money. Really, though, you're just long-term increasing the cost of everything else because what you save in labor, you lose in shipping costs, returns, customer support, and inflation of your national currency (more money printing to offset employment/entitlement deficits created by off-shoring).
The pushback from many whenever it’s suggested that the US should undergo a general trend to bring back manufacturing jobs to America always fascinates me. I always wonder what’s going through their heads when they prefer that things continue to be made on the other side of the world in a sweatshop paying their workers cents on the dollar to make cheap, soulless, throwaway goods in countries with terrible environmental laws, where they’ll then be shipped using a ton of fuel to get those goods across the world to us.
Whatever happened to taking pride in what we make and buy? Quality over quantity? Paying more for something better? Looking out for your neighbors and community by supporting their gainful employment? Independence from countries that literally hate us?
It wasn’t long ago at all that we were making most of the stuff we bought. It’s time to go back to that. Call out every company you see that doesn’t make their products in the USA and ask when they’re going to stop selling out their own neighbors just for a buck.
People: We want stuff cheaply, immediately and in immense volume!
Production: Moves to Asia
People: We want jobs!
Production: Opens a new factory in the USA
People: We don’t want to work that much!
Production: increases pay, which increases product cost
People: this is too expensive. Can we buy from overseas cheaply instead?
Production: Closes USA factory, moves back to Asia.
People: we want jobs…
reply