Most manufacturing businesses and jobs have left the US to go overseas for cheaper labor. While the cost of production may be cheaper to produce overseas, there appears an economic trade imbalance where the US the importer and other countries are the exporters. Would it be apt to bring manufacturing businesses and jobs back to the US? Or is it mutually beneficial to have a division of this sort of division of labor.
If we want to “bring” them back:
- Cut taxes and regulations
- Strip unions of any unnatural power (beyond a group of organized employees)
- Promise not to undo any of that
I gather then one of the prime reasons manufacturing has gone over seas is over taxation, over regulation, and unions?
That’s my take. What about you?
I conjecture there is a strong profit motive (obviously). However, I do question outsourcing from the US as profitable. Many companies, such as Toyota, Honda, and BMW outsource to the US, while many US car companies outsource to Mexico and the ilk. If foreign companies can make profits outsourcing to the US, couldn’t do US make profits without outsourcing? . Baffling
I don’t know if its necessarly that easy in every case. Polluting the land is a lot easier in places like China than the U.S. Although I can’t give any direct sources I’ve read many cases of the Chinese government being indifferent to the pleas of individuals who have had their land polluted by large manufacturers. This is definetly something that could attract easteners, or stop them from returning to the west.
I think the weak dollar might bring much of it back on it’s own.
mark111, the fact that many companies outsource to us leads me to believe that the polution-aspect is relatively small. In addition, any profit lost from that would probably be gained from being “Made In USA”.
To respond to VS: The companies that outsource to us usually end up in states where unions don’t have employers by the throat. I’m sure one of the reasons they come here is so they can say they make their vehicles in the USA, which can appease the protectionists who only want to “buy American”. In some cases, local governments bribe the companies with tax dollars to “bring in more jobs”.
More evidence in support of the free market. Nice.
I agree, we will probably be seeing more jobs come back with the failing dollar. I think we originally lost so many jobs to oversees because it became such a hastle to deal with the unions, regulation, babysitting employees and minimum wage restrictions. SInce the dollar is failing, it will begin to become more profitable to keep the jobs here. BTW totally irrelevant to the topic but Ego, nice signature [Y]
I thought the current monetary system of the US also favours importing goods by expanding purchasing power artificially.
Thanks!
Companies that “outsource to us” are mainly outsourcing functions that help them sell more in our market - i.e., marketing, distribution, and support. Manufacturing is only likely to come here if the cost of shipping the product outweighs the disadvantages, which are primarily taxes. That’s why I support the FairTax as it not only eliminates the tax disadvantage for manufacturing in the US but generates revenue from the sale of imports. (And before anyone insists that we should have no taxes at all, I’d like to point out my desire for little fairies to dance nightly in my backyard for my entertainment.)
With the dollar still the reserve currency of the world and some countries pegging their currency to dollars, it is almost like we are printing gold. So we can just consume and borrow while the rest of the world saves and produces. When the fed causes inflation the prices rise much more here then is reflected in exchange rates because it is used to back other currencies and dollars reserve status. This creates the incentive for companies to go offshore. With the dollar falling off and I think it will continue to do so over the next few years, this may stop happening. Then it is going to hurt.
Why would you want to bring manufactoring jobs back the US? Employment in the manufactoring sector has been in decline since productivity has been increasing. I think outsourcing manufactoring is a minor factor in the decline of manufactoring compared to rising productivity.
The premise is false. There are more manufacturing jobs here now that at any time in the past. They just aren’t union jobs, the kind the politicians and the media like.
There may be more total but as it relates to the current account we are buy alot more manufactured products from overseas than selling. If we had so many great produces here when compared to the rest of the world we wouldn’t have this trade deficit. We have a 800 billion current account deficit because:
Are you sure? Data from the BLS says otherwise. http://www.bls.gov/bdm/manufacturing.gif
Regardless, the percent of people working in the manufactoring sector is decreasing as productivity increases. Historically, the same trend happened in argiculural sector. Before the Great Depression, around 30% of the workforce was employed in the agriculural sector compared to 2% today.
Yeah, but little fairies dancing in your backyard are impossible–no taxes are just highly unlikely.
[:P]
Um… That is a graph of gains vs. loses, not of gross numbers. Anyway I think the BLS is selective about what they measure.