[copious.abundance]

LINK

U.S. to Gain Jobs as Wage Gap With China Shrinks, Study Finds
Shobhana Chandra, ©2011 Bloomberg News
Friday, October 7, 2011

Oct. 7 (Bloomberg) -- Rising labor costs in China will prompt American factories to move production back to the U.S., creating up to 3.2 million jobs by 2020, the Boston Consulting Group said.

A so-called reshoring of manufacturing activity that was lost to China over the past decade would also trim imports and boost exports, reducing the U.S. non-oil trade deficit by as much as 35 percent to a range of $240 billion to $280 billion from $360 billion, according to the BCG study released today.

[...]

[Sixstrings]

Firstly, any job that comes back to the US is good news, but..

I read somewhere we're expected to lose 40 million jobs to offshoring over the next 20 years. Now add in more automation and efficiency.. it's not good for the jobs outlook.

Look at all the big tech companies like Google, Facebook, Zynga (farmville).. they actually employ only a handful, while serving billions of customers. That's unsustainable levels of efficiency; customers need jobs to have money to buy stuff.

Apple only employees a modest number of Americans because of their US retail stores. As soon as a robot can do those jobs.. poof.. there goes their 40,000 retail jobs (or at least half.. even Walmart is experimenting with self-checkout; as soon as they get it to work then poof they're no longer the nation's largest employer).

[35Kas]

The only thing that will ever return manufacturing jobs to America is the imposition of tariffs on imported goods. Seems to work on many countries, and is very fair, since it imposes a price check that counters the non-existence of regulations (environmental and labor) in these cheap manufacture havens.

I don't mind paying 10-15% more on manufactured goods if it means their quality goes up, profit for 1% goes down, and millions of jobs are created that help communities and revitalize their economies.

[35Kas]

Firstly, any job that comes back to the US is good news, but..

I read somewhere we're expected to lose 40 million jobs to offshoring over the next years. Now add in more automation and efficiency.. it's not good for the jobs outlook.

Look at all the big tech companies like Google, Facebook, Zynga (farmville).. they actually employ only a handful, while serving billions of customers. That's unsustainable levels of efficiency; customers need jobs to have money to buy stuff.

Apple only employees a modest number of Americans because of their US retail stores. As soon as a robot can do those jobs.. poof.. there goes their 40,000 retail jobs (or at least half.. even Walmart is experimenting with self-checkout; as soon as they get it to work then poof they're no longer the nation's largest employer).

This cuts both ways. If people don't have jobs to buy at walmart and products from those other companies, either they will have to sell for cheaper or no one will be able to afford them and they will go out of business.

Meanwhile these efficiencies will continue to funnel wealth at the top 1% while the rest gets ever poorer. W/o means to redistribute this wealth the 99% will revolt or die off.

[prajeshbhat]

It is entirely possible, that the next round of offshoring is for executive positions. For the past 2 decades, very talented B-school graduates have been churned out of Asian colleges. They have worked abroad and have plenty of experience. Many have returned to heir homelands starting their own enterprises. They are well-trained, intelligent and ambitious. And they would cost a fraction of what a western executive would cost you. In fact many top managers are relocating to China and India for a third of the salary(in PPP terms they are earning the same, so they prefer being close to home).

[Oneaboveall]

It is entirely possible, that the next round of offshoring is for executive positions. For the past 2 decades, very talented B-school graduates have been churned out of Asian colleges. They have worked abroad and have plenty of experience. Many have returned to heir homelands starting their own enterprises. They are well-trained, intelligent and ambitious. And they would cost a fraction of what a western executive would cost you. In fact many top managers are relocating to China and India for a third of the salary(in PPP terms they are earning the same, so they prefer being close to home).

I saw an op/ed suggesting this almost ten years ago. It pointed out that a company can save real money by outsourcing the CEO. The theoretical company could probably find a Chinese or Indian to run it for about $250,000 a year and that they wouldn't demand the enormous compensation packages western CEOs expect.

[Pops]

I hate to be the one to point to the cloud behind the silver lining but:

If China, the last low labor cost pool in the world is no longer cheap and in fact becomes a huge consumer, all manufactured stuff will become more expensive...

and if energy, along with other commodities (like food) are increasingly reliant on the miracle technology of EHP (Ever Higher Prices) just to keep up with demand, the basics will take an ever larger share of income...

and if the credit binge of the last 30 years that has supported the current consumption binge isn't somehow re-inflated to continue the gobbling of resources...

Then I'm not sure there is going to be much demand for the huge wad of manufactured stuff all of us gather, simply because we'll be spending more for food, energy and shelter.

[Windmills]

It seems doubtful to me that jobs would return to the US if Chinese labor becomes too expensive. I think they'd simply find other countries with cheap labor. There's still plenty of poor people in Asia, Africa, and South America to exploit. As mentioned above, the only thing that will bring jobs back is a tax on imports. That tax will most likely be in the form of punishing transportation costs due to the high price of oil. Only when it's too expensive to maintain production chains that span the globe will commerce will be forced to re-localize.

[PrestonSturges]

I'm sure everyone is eyeing North Korea, where you should be able to get workers for a fish head and a bowl of rice per day.

[basil_hayden]

Let’s see, 2020…that’s…let’s say 8 years 2 months from now, or, to make the math easy, 100 months.
3,200,000jobs/100 months = 32,000 jobs per month. Big Freaking Deal.

Currently we need 150,000 jobs per month just to keep up with population growth, or 15,000,000 jobs by then just to tread water.

In the immortal words of various ESPN analysts “C’mon, Man!”

[smiley]

What I see happening now is that many companies are lured into offshoring key technologies to China. Most companies are not interested in China as a cheap labor country, there are more options in this field, but they are interested in China as a consumer market.

Basically the Chinese government is saying: "we've got the largest and fasted growing consumer market on the planet, if you want a piece of that we want you to produce here".

What more and more companies are finding out now that their technology resurfaces with government backed local competitors. After the companies have been sucked dry from their technology they are expelled from China. When they head home in embarrasment, they quickly find that these Chinese companies follow them home to compete with them on their own turf.

This pattern you see time and time again wether in aviation, automotive, electronics or green energy.
http://www.bnet.com/blog/sec-filings/le ... -china/562

I can't really blame the Chinese for that, it is just business, the Chinese just exploit the short sightedness of our CEO's and their willingness to risk their whole company for a short term profit..

Bottom line, when these jobs come back to the west be prepared to work for a Chinese boss.

[Oneaboveall]

I'm sure everyone is eyeing North Korea, where you should be able to get workers for a fish head and a bowl of rice per day.

...Slave for soldiers/Till you starve/Then your head is skewered on a stake...