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Dramatic Shifts In Manufacturing Costs Are Driving Companies To US, Mexico 233

Posted by Soulskill
from the let's-debate-onshoring dept.
hackingbear writes: According to a new Cost-Competitiveness Index, the nations often perceived as having low manufacturing costs — such as China, Brazil, Russia, and the Czech Republic — are no longer much cheaper than the U.S. In some cases, they are estimated to be even more expensive. Chinese manufacturing wages have nearly quintupled since 2004, while Mexican wages have risen by less than 50 percent in U.S. dollar terms, contrary to our long-standing misconception that their labors were being slaved. In the same period, the U.S. wage is essentially flat, whereas Mexican wages have risen only 67%. Not all countries are taking full advantage of their low-cost advantages, however. The report found that global competiveness in manufacturing is undermined in nations such as India and Indonesia by several factors, including logistics, the overall ease of doing business, and inflexible labor markets.
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Dramatic Shifts In Manufacturing Costs Are Driving Companies To US, Mexico

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  • Re:Growing pains. (Score:5, Interesting)

    by i kan reed (749298) on Thursday August 21, 2014 @12:28PM (#47721439) Homepage Journal

    Unfortunately, without the democratic framework that the US had in its own gilded age, I'm not sure there's an available set of tools for the populace to push into a progressive era, like the US had, where super corrupt elements of the government(like unelected senators) were run out, and labor was given some basic respect under law.

    Wages only do so much for social stabilization. Some changes have to come into power structures.

  • by WindBourne (631190) on Thursday August 21, 2014 @12:53PM (#47721671) Journal
    The real problem is that other nations continue to manipulate their money relative to the $.
    China, [google.com]
    Indonesia, [google.com]
    India, [google.com]
    vietnam, [google.com]
    etc. are but a few.

    As long as this is ignored, then manufacturing will continue to stay with those nations that manipulate the most.

    What is really helping move this back is NOT so much costs, but the fact that the younger generation are saying no to this and working hard to bring it back. Look at how Target, and Walmart are doing. These are basically front companies for these other locations. They are having no choice but to start bring back North American products.
  • by TiggertheMad (556308) on Thursday August 21, 2014 @12:58PM (#47721723) Homepage Journal
    China also has a long history of violent peasant revolt, so i'm sure it will work out one way or another...
  • Re:Growing pains. (Score:5, Interesting)

    by Amtrak (2430376) on Thursday August 21, 2014 @01:24PM (#47721937)

    super corrupt elements of the government(like unelected senators) were run out

    See I always saw that as a misunderstanding by the majority of people as to what Senators really are. The US Federal Senator's job before the 17th amendment was to represent the interests of the State they were appointed by not the people of the State. (We have the House of Representatives for that) So if your senators were corrupt then it meant that your State Legislator/Governor was corrupt. (A very distinct possibility i.e. Illinois) All we have done is taken the part of the Federal government that was supposed to be stable and turned it into the US House of Reps part II.

    Also I contend that it is easier to buy a Senator now than it was before the 17th amendment. Now instead of buying off the majority of a State Legislator you would only have to buy off one man. Of course given supply and demand (There are more State Legislators than Senators.) the price of buying a Senator may be such that it isn't any different.

  • Re:Growing pains. (Score:4, Interesting)

    by Anonymous Coward on Thursday August 21, 2014 @01:55PM (#47722251)

    Yeah. And we're still in the second transition.

    If we want to make analogies, it's worth considering that industrial workers' rights didn't really happen until the 1930s, over 50 years after the beginning of the industrial revolution in America. Most service workers still have no unions, or anything similar (not sure what it would be), to claw back profits from investors and executives. Which is why wages are flat even though American wealth continues to sky rocket.

    I never understood conservative opposition to unions. In particular, wage slave, blue collar conservatives. Unions are an effectively privatized way to achieve wealth redistribution. The only alternative is taxation and government programs**, or for society to simply live with increased crime and dislocation.

    Unions are the worst way to pursue income equality and social stability, except for all the alternatives.

    ** There's a strong economic argument that direct wealth transfers through taxation are the most efficient way to accomplish this. But I suspect that American politics in particular is just a tad too corrupt to make this a dependable and fair mechanism. There's too much regulatory capture and various forms of internecine backstabbing (among corporations jockeying for loopholes, among blue collar workers "racing to the bottom", etc). Unions are a nice, distributed mechanism which looks ugly and ineffective at the micro level, but at the macro level seems to work out pretty well in terms of outcomes.

  • Re:Growing pains. (Score:4, Interesting)

    by angel'o'sphere (80593) on Thursday August 21, 2014 @01:55PM (#47722253) Homepage Journal

    ROFL,

    posts like this don't really make sense.

    China, on the other hand, has always had plenty of cheap labor. They have solved problems with brute force instead of applying technology.
    So had the USA 150 years ago.

    As that culture changes for China, they will make the exact same mistakes the other industrialized countries have made. Very unlikely as their management of their currency and the investments in third world countries show.

    China's water and air conditions are miserable ... a condition that is reminiscent of the 1900s in the US.
    True and false at the same time. Pollution is bad in China, but they are working on it, just 5 years after it became a majour problem they are trying to fix it. The USA had the same pollution levels into the 1970s!!! not 1900. And they needed decades to even consider fixing the problem. Astonishingly a guy who no one had thought had any clue at all was one of the spear heads of the clean air acts and other legislations: Ronald Reagan!

  • Re:Zooooom! (Score:5, Interesting)

    by frank_adrian314159 (469671) on Thursday August 21, 2014 @02:13PM (#47722457) Homepage

    Well, that depends on the amount the jobs pay, doesn't it? Have average salaries for manufacturing jobs (with respect to inflation) increased, decreased, or remained the same over the past 20 or so years?

    That's how you can have an increase in the number of jobs while simultaneously collapsing a middle class. You can also convert full-time positions with benefits to part-time positions without, decrease sick and vacation days, require people lucky enough to have health benefits pay increasing amounts for them, etc., not to mention taking actions that simply raise stress in people's lives like making people work more erratic shifts, threatening them with off-shoring or outsourcing, basically any psychological gambit that makes the employee feel powerless - which has the follow-on effect of making them too cowed to asked for a fair share of the company's profits, again leading to less money for what was equivalent or better work. Plus that latter thing makes it less likely that workers would organize as a labor block or politically in their communities - a fine multiple win for the factory owners vs. their employees.

    So yes, I can see several ways that a middle class can be hollowed out, even while increasing numbers of even worse, lower-paid jobs are created (and taken). That you don't see how this doesn't make things better for most demonstrates that either you are unaware of how the real world has been working for quite a while or you have some sort of odd ideological ax to grind.

  • Re:Growing pains. (Score:2, Interesting)

    by Anonymous Coward on Thursday August 21, 2014 @02:27PM (#47722657)

    My point there is that democracy, while important, isn't a cure-all. It's inherently adversarial, a conflict which has notably ground today's national legislature to a standstill.

    I'm going to disagree with your point. The founders of the USA designed gridlock into the system, so that if there isn't agreement on what to do, nothing will get done.

    Are you worried about theocrat conservatives? Don't worry; they will never get any of their goals accomplished.

    Are you worried about liberals completely turning the country into a socialist country? Don't worry; there is a point past which they will never be able to go.

    There is plenty to worry about. My biggest worry is that the government is debasing the currency while running up huge debt. In the past, that has been a recipe for disaster but I guess our leaders believe that this time is different [amazon.com].

    You should also worry about the growing trend of using the courts to hammer people just for their politics. Indicting Rick Perry for using his veto? It's like a banana republic [nymag.com].

    My other big worry is how the mainstream news has stopped even pretending to cover the news fairly, and spins every story in favor of the issues and politicians they like, while spinning every story against the issues and politicians they don't like. My most hopeful thought is that, in the long run, people are just going to stop putting any faith in what the mainstream media claims.

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