DesideriScuri
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Joined: 1/18/2012
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quote:
ORIGINAL: Level
http://business.time.com/2013/04/11/how-made-in-the-usa-is-making-a-comeback/
A little silver lining?
I'm seeing more and more of these type stories.
Perhaps. But, if the article is correct, then the analysis is wrong.
quote:
Some economists argue that the gains are a natural part of the business cycle, rather than a sustainable recovery in the sector. But I would argue that the improvements of the last three years aren’t a blip. They are the sum of a powerful equation refiguring the global economy. U.S. factories increasingly have access to cheap energy thanks to oil and gas from the shale boom. For companies outside the U.S., it’s the opposite: high global oil prices translate into costlier fuel for ships and planes — which means some labor savings from low-cost plants in China evaporate when the goods are shipped thousands of miles. And about those low-cost plants: workers from China to India are demanding and getting bigger paychecks, while U.S. companies have won massive concessions from unions over the past decade. Suddenly the math on outsourcing doesn’t look quite as attractive. Paul Ashworth, the North America economist for research firm Capital Economics, is willing to go a step further. “The offshoring boom,” Ashworth wrote in a recent report, “does appear to have largely run its course.”
Now, the article is stating that this is being fueled (pun intended), in part, by cheap energy inputs. But, what cheap energy is being used? Oil and Nat. Gas. Those aren't exactly darlings of the President or the other Democrats. Remember the whole electricity prices will necessarily have to skyrocket quote? What will that do to our relatively cheap energy equation?
At best, it's a tenuous good news report.
What else could have been behind the shift? quote:
And about those low-cost plants: workers from China to India are demanding and getting bigger paychecks, while U.S. companies have won massive concessions from unions over the past decade.
No, that can't be. Off-shore workers demanding higher wages and Union concessions are making the relative cost-friendly outsourcing labor idea less cost-friendly? Who'da thunk it?
quote:
Today’s U.S. factories aren’t the noisy places where your grandfather knocked in four bolts a minute for eight hours a day. Dungarees and lunch pails are out; computer skills and specialized training are in, since the new made-in-America economics is centered largely on cutting-edge technologies. The trick for U.S. companies is to develop new manufacturing techniques ahead of global competitors and then use them to produce goods more efficiently on superautomated factory floors. These factories of the future have more machines and fewer workers — and those workers must be able to master the machines. Many new manufacturing jobs require at least a two-year tech degree to complement artisan skills such as welding or milling. The bar will only get higher: Some experts believe it won’t be too long before employers will expect a four-year degree — a job qualification that will eventually be required in many other places around the world too.
Super automated means what? Higher productivity per worker since "robots" are doing more and more work. That also means that for any given amount of production, fewer workers will be needed. Hell, the author even says that one challege for US Companies will be to actually discover new tech to make more and more automated factories. A call for plants that won't hire as much?!?
The big silver lining, at least for me and my classmates, is that as factories get more and more automated, they'll need fewer line workers, but more tech workers to keep the automation rolling. Not surprisingly, this is a big part of the reason I chose my current degree track.
Increasing what is made in the USA is good, overall. It would be better for the American worker if productivity would remain relatively low so more are needed to work the factory floor, but that's not going to be the case going forward. Improving production simply by increasing the amount of labor ends up being more expensive a solution than tech-ing up the joint. In the long run, the more stuff that is made here, the better, provided it's being made here by choice, and not by force.
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What I support:
- A Conservative interpretation of the US Constitution
- Personal Responsibility
- Help for the truly needy
- Limited Government
- Consumption Tax (non-profit charities and food exempt)
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Time Magazine: Made in the USA - 
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