Insourcing. That's at the top of my trending list for 2012. But, how do we make reshoring--bringing jobs back from overseas--real? For America to have a thriving economy and lower unemployment, we need to create more good-paying jobs. And to do that, we'll have to win back some of the jobs that have been shipped overseas for the past decade.
President Obama, to his great credit, gathered about a dozen businesses and many more experts at the White House to strategize on how to bring manufacturing jobs back to America. Within the past year, major consulting firms have published a litany of reports urging businesses to take a look at reshoring. This week, the White House issued its own report.
There is no doubt that some progress has been made. American manufacturing jobs have grown over the past two years--the first time that's happened in more than 15 years. Our nation gained 23,000 manufacturing jobs in December alone. Other manufacturing indicators--sales outlook, growth in output--have also been in consistently positive territory. The Center for Automotive Research predicts that the auto industry and its suppliers alone could add 167,000 American jobs over the next three years.
Here are five things the President should highlight in the State of the Union address to ensure that the significant trickle of reshored jobs becomes a genuine trend:
There are also factors beyond our control that can help--or hurt--these efforts to reshore jobs: namely, the value of the dollar, shipping costs, and consumer preferences. But, if you think we can't be a manufacturing powerhouse as a high-wage nation, then think again. Germany, where average manufacturing wages are in some cases double that of American wages, has balanced trade with China (we have an annual $272 billion deficit) and over 20 percent of its economy in manufacturing (we have 11 percent).
It's clear from the job numbers, as well as voter sentiment, that Made in America is starting to make its way back. But we want reshoring to be more than a slogan--we want it to be our national policy.
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http://www.bls.gov/opub/mlr/2010/05/art1full.pdf
Labor costs in India’s organized manufacturÂing sector
"CompensatÂion costs in India’s organized manufacturÂing sector were 91 cents per hour for all employees in 2005; this amounted to about 3 percent of hourly labor costs in the U.S. manufacturÂing sector, but was above BLS estimates of labor costs in China..."
http://www.bls.gov/opub/mlr/2009/04/art3full.pdf
China’s manufacturÂing employment and compensatiÂon costs: 2002–06
"Both employment and compensatiÂon costs in China’s manufacturÂing sector increased rapidly from 2002 to 2006; employment increased more than 10 percent during those 4 years, to 112 million, while compensatiÂon costs increased more than 40 percent, to $0.81 per hour worked..."
The Obama administraÂtion is planning to abolish the BLS's InternatioÂnal Labor Comparison Program that produced those reports:
http://www.manufacturingnews.com/news/10/0212/BLS.html
Obama Puts BLS's InternatioÂnal Labor Comparison Program On Chopping Block
It's on page 12 of this White House document:
http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/trs.pdf
TerminatioÂns, ReductionsÂ, and Savings...
Contrary to the myth of the liberal press, the media are all controlled by the 1% who have spread a lot of misinformation.
The main advantage China has regarding low production costs is not labour but lack of environmental regulations. As the multinationals pollute and poison China, let us remember that we all depend on the same planet Earth. And all those toxins get imported along with the cheap goods we desire.
I don't believe in the myth of high labour costs either. I expect that advertising costs as much as labour and accounts for the astronomical cost of things like cars.
Buy American, demand higher quality items, insist on standardization of things like phone chargers, refuse the ideology of goods that cannot be repaired. Our landfills are filling up with cheap foreign made goods leaching poisons into the ground.
The jobs will come back. Hopefully , these economic ructions have proven to the 99% that jobs with benefits, pensions and stability are the best solution for most social problems.
Free Trade Doesn't Work! http://www.huffingtonpost.com/ian-fletcher
Our proposal is for companies to receive a tax break to create jobs for Americans using technology to route calls to home based customer service representatives. This technology is used in large companies today allowing them to use the Internet as a means of controlling the associated costs of telecommunications on international and domestic calls.
This routing technology can be in the company’s headquarters and when calls come in routed to available operators based out of their homes. This eliminates the need for expensive real estate housing these call centers and allows for greater worker flexibility.
Tax breaks/incentives could be given to companies who hire existing unemployed workers, along with the purchase of equipment to route calls.
Many customers who call customer service are often routed to call centers in other countries and many are frustrated at the quality of customer service provided. This legislation would serve the needs of America by hiring the unemployed, satisfying American consumers who would prefer to speak with a U.S. based customer service representative, and provide good will to companies who transfer their operations back to the United States.
That's a bald faced lie. Manufacturing jobs have not recently grown at the rate of years past, but have steadily grown ever since WWII, unless you are talking about union jobs.
Adopt insourcing tax incentives
Are you proposing we assume control of the currency of a sovereign nation?
Invest in infrastructure
Oh yes, that will work well. We are $15,000,000,000,000 in debt, and will require all contractors to use material that raises the cost of those contracts.
Invest in our workers
Sorry, we have invested about all we can afford in the teachers' unions with negative results. I suggest that the businesses who are now crying that they can find no qualified applicants take the responsibility upon themselves, and expand their training budgets.
"In 2010, the U.S. trade deficit was just a whisker under $500 billion. Much of that trade deficit was with China.
During 2010, we spent $365 billion on goods from China while they only spent $92 billion on goods from us."
(http://theeconomiccollapseblog.com/archives/how-can-america-create-wealth-if-our-industrial-base-is-destroyed-50000-manufacturing-jobs-have-been-lost-every-month-since-2001)
For each manufacturing job lost, 3-4 "support" jobs are lost.
China recently imposed tariffs of 20% of automobiles manufactured in the U.S.
(http://www.msnbc.msn.com/id/45686530/ns/business-stocks_and_economy/t/china-us-auto-tariffs-so-sue-us/)
clearly an issue that crosses party lines,
when I pick something up and it says hecho in china I put it back on the shelf
I try to find domestic alternatives. if their are none then I have to decide if its something I really need or can do without
Then I will look at used if I can find no domestic alternative
http://www.manufacturingnews.com/news/11/0930/madeintheworld.html
European Technocrats May Soon Deprive Americans Of Knowing Where Everything They Buy Is Made
"The World Trade Organization, the OECD, the International Chamber of Commerce and the European Commission are moving aggressively to eliminate "Country of Origin" labeling, claiming that it does not reflect the current structure of global trade. The Europe-based organizations instead want to adopt a "Made in the World" logo for all products on the grounds that global supply chains have rendered country of origin labeling inaccurate and obsolete.
The intent of the proposal is to reduce public pressure on politicians for protectionist trade policies..."
it is a real problem on foodstuffs, medications and personal care products. if there is any indication at all of where the product is from it is usually inside the package that you have to buy and open - like some recent OTC medication I got from Walgreens. inside the sealed package was made in india - you could not tell without opening the sealed package
you have to assume that if does not say made in USA it probably wasn't
we need stronger country of origin labelling not weaker
And it isn't movies or music I'm concerned about.
It's items like electronic components and industrial products like airplane parts. It's been a fairly low percentage up to now - but production and economic issues over the last few years is really getting the counterfeiting operations moving. This should be one of the key points to publicize and press China on - but without local production, there won't be any strength to our position, or any credibility to our threats.
You Don't Know Where Your Drugs Come From And Neither Does The FDA; U.S. Imports 90 Percent Of Its Antibiotics (And Vitamin A) From China
"...The United States needs two tons of heparin per month. Seventy percent of that is sourced from China, says the study. Tainted Chinese heparin (made from pig intestines and used as a blood thinner) supplied to Baxter International caused the death of 81 Americans in early 2008..."
Color me old-fashioned, but I want my drugs made in the U.S.A, inspected by the FDA.
If something goes wrong, at least my heirs can sue in an American court.
o 90% of our antibiotics come from China
o in 2008, tainted heparin from China killed 81 Americans
o many offshore pharmaceutical plants are not inspected by the FDA.
US manufacturing businesses must therefore take advantage of all of the US FREE TRADE AGREEMENTS that were created by US presidents, ratified by the Democratic and Republican members of the US Congress, and then signed into law by US presidents that ECONOMICALLY REQUIRES US Businesses to offshore US jobs and/or import foreign made products (including parts and sub assemblies for assembly in the USA) in order to meet the US CONSUMER'S DEMAND for the absolutely LOWEST POSSIBLE PRICE for each product, without the US manufacturing business going bankrupt by using US labor and US environmental manufacturing costs.
1. Europe's costs are higher.
2. China's quality is lower.
Last year the average income in the industrial areas of China was about $200 per month, or about $2500 annually (1). In the U.S., the average for the bottom 90% of workers was $31,244 (2).
2500/31244 = 12.5
Your other interesting point is cheap electricity. If we would rid ourselves of those pesky environmental laws, we could have cheap electricity, and we could have air quality like China.
References
1. http://factsanddetails.com/china.php?itemid=367&catid=9&subcatid=60
2. http://motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph
3. http://solar.calfinder.com/blog/solar-politics/the-chinese-contradiction-why-the-world-needs-china-to-get-its-story-straight/
http://www.opic.gov/
OPIC: Private Investment CorporatioÂn
http://www.opic.gov/insurance/coverage-types
Types of Coverage | OPIC: Overseas Private Investment CorporatioÂn
"o Currency InconvertiÂbility
o ExpropriatÂion
o Political Violence
o Standalone Terrorism
o Special Coverages
o Small Business Coverage..Â."
http://reason.com/archives/1997/03/01/corporate-welfare-reform
Corporate Welfare Reform - Reason Magazine
"...AnotheÂr "strange bedfellowsÂ" coalition that includes House Budget Committee Chairman John Kasich (R-Ohio) and socialist Bernie Sanders (I-Vt.) has banded together to kill a high-profiÂle example of corporate welfare.
Their target is the Overseas Private Investment CorporatioÂn, which gives loans and "political risk insurance" to U.S. businesses that invest in potentiallÂy unstable countries. Its beneficiarÂies include such large companies as Coca-Cola, McDonald'sÂ, and US West. CongressioÂnal opponents believe the federal government has no business promoting major corporatioÂns overseas. Free market critics say these activities should be left up to the private sector. If private companies won't insure or make loans for some of the investmentÂs that OPIC currently backs, then perhaps those ventures were too risky to begin with. Sanders and others on the left argue that OPIC is, in effect, exporting jobs..."