As China and India make more money, their workers will start demanding a bigger piece of the pie (we're already seeing this). Their prices will go up, meaning that, by comparison, U.S. workers will start to be a bit more competitive.
I've also seen reports that offshoring customers have been bringing back some of their work to the U.S., sometimes because of poor quality but also for tighter coupling and shorter response times.
China is making 'stuff' but they're not developing ideas or creating the software. Our strength is in management, finance, design and software development. I don't think we should shed any tears for a lost manufacturing industry-- hopefully it'll encourage more people to pursue these more intellectual careers.
> China is making 'stuff' but they're not developing ideas or creating the software.
Innovation requires two sorts of deep understanding: what people need, and what one can create. We are losing the latter, because much of the creation has gone elsewhere. A lot of Apple's design power comes because they're still deeply involved with the million physical details most companies now ignore.
Software for the US market may be a defensible competency, because we understand both medium and need. But there's little reason to expect that most of China's software will come from the US; they're developing the capability, and understand their needs much better.
Remember, to get China to send us the stuff, we need to send them something in exchange. Right now for every $1 of goods we send them, they give us $3.5 back. That's not sustainable.
Our strength is in management, finance, design and software development.
So that means that the 90% of the population that doesn't work in these fields is going to be out of luck? Well, looking around I suppose it does. Uh, and there's plenty of software and finance back-office moving to India.
A policy that plays primarily to a "strength" which encompasses only a small portion of the population ... well obviously primarily going to benefit that portion.
So, you're assuming that in our country everyone wants to work in one of these industries... but what if you don't want to pursue an intellectual career?
More interesting, what if you don't have the education for pursuing such career paths? This is the biggest problem for Americans today. Most Americans have low quality schools that cannot prepare for career paths in Engineering and Science. Most of the Engineering labor in the US comes from abroad, either via American universities of the H1B Visa program. What is left for most US citizens educated in this country?
They will need genomic, health research that target their populations anyway. That's enough to occupy them for a while. What I don't seen in these discussion is the fact that I feel soon, Asia will want things for itself and that's a huge amount of people to serve. They will be busy making goods for them and that should drive up labor costs and help make the US labor look cheaper for US companies.
To look at the loss of manufacturing as an American industry while pretending that is was solely populated by those who chose less intellectual careers on the plant floor is to overlook the fact that manufacturing, coupled with our great land expanse and growing population, was the prime enabler for the pursuit of intellectual careers since the 1930's.
Most, if not all of the business practices you'll learn today in a renowned university were conceived in the laboratories of American industry. Universities were founded with the whole purpose of providing trained managers and researchers to the manufacturing industries. Unfortunately, those highly educated and trained managers failed to see that the American success story was industry itself, not their ability to make manufacturing cheaper overseas.
The consequences are more than apparent. Managers have to slave to meet Wall Street's predictions and goals, hard working people have to choose a career between writing software, selling financial products, providing healthcare services or working in a derivative position of such in order to make a decent living, and those who choose the higher intellectual pursuits, well, they get to choose whether to offer you paper or plastic at the checkout counter.
Sadly, those who lack a strong educational background or the finances to improve upon it will be further sidelined and alienated from the growth economy and be forced to compete for continuously devaluated and scarcer positions while being forced to hand their pay over to the few companies that can compete in a global economy. And allowing them to buy cheap flatscreens at a super warehouse is not going to vent their frustration.
How are they vastly better off? Please visit any city in the Rust Belt. Get out of the house and ask how any service sector employees are making ends meet. They went from having honest, well-paying jobs that enabled them to build lives, families and communities to watching their source of income shipped overseas by the very people they worked their asses off to send to college all because the manufacturing industry's market efficiencies didn't match those they taught at business schools.
Policy steps? Open more fast food franchises? What do you do when you terminally impoverish a large swath of your population after exploiting them for sixty years in order to achieve some financial utopia that they didn't need anyway? You can't sell them on owning a house while they make a marginal wage. You can't sell them on seeking out intellectual knowledge while the cost of education soars. You can't keep bombarding them with mainstream images of prosperity when they're worried about making rent. They're going to turn to anyone with a message of hope, no matter how ludicrous. It happens all the time. And then you've lost them.
Reopening factories may not be the panacea, but you cannot innovate across the board when you don't build anything. You cannot innovate while locking a segment of the population out of the process just because they don't have a degree or know the secret handshake. It's the same reason why you can't lock women or minorities out of the process. Otherwise we'd just be a bunch of white guys building apps that address white guy, first world problems and the world would be a shitty place.
This is the point where the new CEO, Mr. Obama, has the honor of addressing the company to tell everyone that we hired way too many people for a product that nobody wants and we'll be retaining the software patents and letting everyone else go. A task he's understandably reluctant to perform.
Increased government spending, entitlement and tax reform, forcing the Chinese to change their monetary policy, investing in nenewable energies, nuking Pyongyang, ok maybe not nuking but really doing something about Mr. Kim would be nice; these are all hard steps that need to be taken but they can only be taken once the leadership comes forward and admits that we have some hard times ahead and that we need to scale back the American Dream a notch and get real.
Unfortunately, one half of the leadership has spent the past twenty years stoking fear and bigotry into a frothy mass with a mixture of penis and religion while the other half has been betting on the kitten at the dog fight, all coaxed on by sources of information that wish the free drama to keep playing itself out. It's time to take a long ,hard look at the landscape and realize that we have a problem and that we need to close the gap before we're in true banana republic territory.
The median household income in Youngstown, OH is $25,000. The average salary in Shenzhen is ~$6000, implying a "household income" of $12,000. People in the rust belt are better off than Chinese factory workers, and Chinese factory workers are better off than the Chinese rural poor.
I don't have 5 additional grafs of politics to give you after this observation, but do note before you get irritated with my comment that our politics are probably very similar; I just think opening more factories is the wrong intervention.
I think you should look into additional graphs; they may help you understand income correlation. And I don't mean to be insulting, but just by looking at the figures, it's clear that the workers in Shenzhen are in the middle of economic growth, while the residents of Youngstown, OH, have ceilinged out at slightly above the poverty level. The income per capita in Shenzhen is ~$14K, growing at +10%. Their per capita income is 200% that of the average rest of China's. Youngstown's per capita is ~$31K and in decline, having never reached higher than ~$32K in 2007. That's 65% of the American average of $47K.
The people of Shenzhen have opportunity on demand. The people of Youngstown have no future. Please explain that to them the next time they max out a warehouse credit card on that 48" plasma they needed to have in order to feel better about themselves.
It's not a political problem, it's an economic crisis and we need those jobs back. Costs will go up and we'll have to hang on to that laptop for a year longer than we planned to, but all boats rise when the tide comes in.
I'm not sure I see what the trendlines have to do with quality of life in either locale. Either Chinese factory workers are better off now than autoworkers in Youngstown, or they're not. Either Chinese factory workers are better of than Chinese subsistence farmers, or they're not.
Similarly, I understand the psychological importance of one's income relative to the community median, but I don't see how being worse off than the average American makes a Youngstown factory worker worse off than the average Chinese person.
You seem to think I'm saying "auto workers in Youngstown will be fine". I don't think that.
We can't just make up new facts to make political priorities we both hold more compelling.
Finally, by making the cost of laptops increase to create what are, in effect, make-work jobs in on-shore technology manufacturing, we also depress demand and penetration of laptops everywhere. Who's better off in this scenario? If we're going to pay a subsidy to people who would otherwise be assembling our laptops in (say) Youngstown, we should do it directly; taking it out of the entire market for laptops is regressive.
- It dehumanizes the spirit and makes the receiver a dependent of the state; later to be vilified by an ignorant society at large when it suits them.
- Comparing apples to oranges is patronizing at best. Being better off is contextual and you cannot compare a child who won't eat broccoli to a Biafran baby.
- A vast majority of people live, work and die within a relatively short distance of where they're born and outside of famine and conflict, you're not going to get them to move away from of their family and/or community networks. The chance that they're even able to do so severely declines with the absence of solid education or an established, dependable contact in another city. Yes, there are plenty of people who do it, but there are usually mitigating factors that affect the decision-making process outside of those who have chosen a career that requires a move. We'd like to think that we're a society on the move but the reality is quiet the opposite.
- That's an even worse suggestion than moving to another city or out of state. Outside of high-skills, training and education protected jobs, there isn't much need for labor in other countries. As a matter of fact, most countries have a surplus of labor, not to mention a wage differential that would basically wipe out any future earnings potential. The suggestion is so ludicrous that I won't even address legal, language, cultural or distance problems that would turn away most people who even dream of doing it. And I say that as someone who spent ten years in a foreign country where English isn't spoken. That's asking the impossible and has very few benefits for anyone involved.
In conclusion, the "love it or leave it" crowd can stuff it.
There's something that bugs me about the phrase "honest work". It implies you need to do (usually) manual menial labour in order to be fulfilled as a person. It seems like the kind of meme the rich robber baron factory owner tells to the poor serfs in order to keep them happy with their lot. The hell with 'honest work'.
If work was so great, the rich would have kept it to themselves.
I disagree. When I think about the mention of honest, well-paying jobs, I visualize jobs where a person is hired on the merits of their experience and character, where their efforts go towards progressing, learning, teaching and helping while growing along their peers with the security of full time long-term work earning a wage that affords for savings after expenses, advancement and the freedom to lobby for change in the workplace. An honest job is provided by the employer with the responsibilities of paying taxes and benefits shared with the employee. It has nothing to do with being menial or even manual for that matter.
A dishonest job is where an employer takes advantage of the employees or market conditions to offer insecure, low-paying wages where the employee is subjected to conditions designed to restrict their wage-earning ability, restrict their freedom of advancement and deny them their legal rights while simultaneously trying to avoid paying proper employment taxation or offering benefits to the employee. An example of this type of employer would be WalMart.