(10 am. – promoted by ek hornbeck)
“There is evidence here of reshoring because of transportation costs and lead times,” Mr Bergmann said. “The global supply chain allows you to chase lower cost of labour, but the total costs are reflected in the decision on where you produce for a given geography.”
The decline of the American middle class have finally reached the point that American workers can compete against Chinese peasants. Victory is in sight!
With any luck our corporate masters will soon be installing suicide nets outside our factories.
The biggest reason for this change of fortune is that Chinese workers are pricing themselves out of the market.
A decade ago, a factory worker in China made 58 cents an hour. Today, wages are more than $ 3.00 and there are predictions of $6.00 an hour by the year 2015.
$3 an hour?!? Who do they think they are? Rockefeller? No wonder manufacturers are moving back here.
Of course its important to analyze all the reasons for this sudden surge of love for the American worker.
Boston Consulting Group, which advises companies on their supply chains, recently made an extended case that the United States is like the China of wealthy countries (awesome analogy!) because of how cheap it is to make stuff there.
What it shows is that labor and energy costs are a lot lower in the US than in Europe and Japan, and are no higher, combined, than in China. Overall, in 2015, manufacturing in the US will cost only about 5% more than in China.
5% isn’t much, and considering the way that median wages are dropping here in The States, we should reach Chinese peasant wages in no time at all.
Of course its important to look at the key reasons why the American worker is getting so darn cheap.
The report notes that a significant reason for lower US labor costs is that it’s easier to fire people and shut down factories:
Doesn’t reading that leave you with a warm, fuzzy feeling all over? The American worker is getting cheaper because the American worker is the most disposable.
All that love for the American worker shows up in all sorts of ways, such as vacation days.
Or should I say, lack of.
Just in time for the Labor Day “holiday,” a new survey reveals that nearly all employed Americans-91 percent-do work-related tasks during their personal time.
A total of 37 percent of employed Americans work 10 or more hours per week during their supposed personal time, compared with 27 percent of Australians and 18 percent of British workers, according to the survey of 2,034 workers.
Businesses don’t have to pay for vacation time or sick time, and get a whole bunch of unpaid hours of work above and beyond the normal 40+ hours.
All that translates into higher corporate profits that comes directly from paying less compensation (at least to non-CEOs).
Before everyone gets excited about those sweatshop jobs being reshored, let’s keep it in perspective.
So far, the effect on jobs has been modest. Since January 2010, the United States has added 520,000 manufacturing jobs – and of those, just 50,000 have come from overseas firms moving here, according to the Reshoring Initiative. (That includes 115 in the new Lenovo plant.) That’s a decent number, but it pales beside the 6 million factory jobs that the Bureau of Labor Statistics says vanished between 2000 and 2009.