Free traders do NOT want to discuss WHY manufacturing is coming back to the USA [View all]

[Zalatix]

Remember all that yapping about how we owe it to the third world to make our workers homeless to make their lives better?

Well, that philosophy has come back to bite free traders on their ass, and you better believe they don't want to hear you talk about this.

Offshoring is wholly dependent upon moving production from America to nations where labor is cheaper and wages are paltry in comparison. In order for free trade to even exist, one populace has to be impoverished. When the nation you export your jobs to sees their people's wages rise, the game is over.

Not even Germany can beat this law of gravity. For instance, BMW and other German companies have been moving production to the United States, where wages are lower, to produce goods that were originally produced in Germany.

Here's a tip: You can shut down any discussion on free trade simply by asking, "What happens when you run out of sources of cheap labor"?

That question has ceased to be hypothetical. That scenario is now happening. America is running out of sources of cheap labor. Jobs, as a result, are coming back to the USA.

So much for the free trade argument. Offshoring is unsustainable. This is being shown by history.

http://blogs.cisco.com/manufacturing/made-in-the-usa-again/

-- Wage and benefit increases of 15-20% per year at the average Chinese factory will slash China’s labor-cost advantage, reducing the savings gained from outsourcing will drop to single digits for many products.

-- Transportation, duties, supply chain risks, industrial real estate and other expenses will minimize cost savings of manufacturing in China compared to the US.

-- Automation and other productivity improvements in China will further undercut the primary attraction of outsourcing to China: access to low-cost labor.

-- Rising income levels in China will create greater demand for goods in the domestic Chinese market, driving production work for the North American market back to the US.

-- Because of rising Chinese labor costs, manufacturing of some goods will shift to other low-labor cost countries. However, compared to the US, those countries do not have the infrastructure, IP protection or political stability that is necessary to mitigate risk, which will encourage manufacturers to return to the US.

Edited to add: and jobs ARE in fact coming back, because of this:
http://www.washingtonpost.com/politics/us-manufacturing-expands-at-fastest-pace-in-10-months-as-orders-hiring-and-production-rise/2012/05/01/gIQAs4R2tT_story.html

The Institute for Supply Management, a trade group of purchasing managers, said Tuesday that its index of manufacturing activity reached 54.8 in April. That’s the highest level since June and up from 53.4 the previous month. Readings above 50 indicate expansion.

The report, which exceeded analysts’ expectations, led investors to shift money out of bonds and into stocks. The flurry of stock buying put the Dow Jones industrial average on track for its highest close in more than four years.

.............

A measure of employment in the ISM’s survey rose to a 10-month high. This showed that factories are still hiring at a solid pace.