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.
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.
Why do you think it would be hard for them to develop those strengths? What if those strengths derive from having a strong manufacturing base?
As their own consumption rises, local companies have a much better chance to design products tailored to the needs of their own expanding markets, effectively expanding them further.
And, as for software development, you'd be surprised by how much is developed outside the US.
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.
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?
Not developing ideas, you say?
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.
There's probably a lot of worthwhile policy steps we can take to help American ex-factory workers, but reclaiming the factories needn't be one of them. Factories may be a dead end.
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.
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.
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.
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.
What's wrong with receiving a handout?
What's wrong with being better off than citizens of another country?
If you don't like the former, go work another job in another city.
If you don't like the latter, go work another job in another country.
- 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.
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.