http://mjperry.blogspot.com/2009/08/manufacturing-employment-drops-to.html <br /></span><br /><a href="http://4.bp.blogspot.com/_otfwl2zc6Qc/So3S7XtDAII/AAAAAAAALCA/ndwHHvtfGQQ/s1600-h/mfg.jpg"><img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 327px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5372181847939940482" border="0" alt="" src="http://4.bp.blogspot.com/_otfwl2zc6Qc/So3S7XtDAII/AAAAAAAALCA/ndwHHvtfGQQ/s400/mfg.jpg" /></a><span style="font-size:78%;"> <center><span style="font-family:georgia;">Originally posted at </span><a href="http://mjperry.blogspot.com/"><span style="font-family:georgia;">Carpe Diem</span></a><span style="font-family:georgia;">.</span></span> </div></center><div style="clear:both; padding-bottom:0.25em"></div><br>
Explains a lot. And the Dem rhetoric is "we need to revitalize manufacturing"... How can we when there is competition from low-labor cost countries whose people are happy to work for $1 per hour or less?
I think I have commented before that the labor content of many capitol intensive products is less than 10%, and is not the determinative factor in plant siting. Ford manufactures in Canada because it does not have to pay for health insruance for workers or retires in it's Canadian operations. GE manufactures the CFM 56 in France and the Netherlands because its cost of capitol is/was 3% in that location, plus it does not pay any taxes of profits on engines manufactured and sold outside the United States as long as it does not repatriate the profits to the US. BTW the CFM 56 is the US military F101 with a high bypass fan and without the afterburner. Uncle Sam paid for the design, and pays for the research for the blade upgrades, which are then applied in France. Note neither France or Canada are low wage countries. The cost of Capitol ie the interest rates on loans to build a factories in China is from 1.5 to 3%, depending on how popular your partner is with the Chinese govt. That is why I have seen capitol intensive processes with 3% labor content shipped to China. The difference in labor cost to manufacture in China will not even pay for the shipping from China, but you can get a loan to manufacture in China, in America not so much.
It's a race to the bottom in terms of wages for doing most anything, from manufacturing to reading imaging films. Whichever nation is willing to have its people work the cheapest, and provide subsidies in terms of tax incentives, training, waivers of environmental contamination, any labor laws, etc., will win the jobs because they have the competitive and comparative advantage. This is what "free trade" has wrought. So, enjoy those cheap goods at WalMart but know the price to be paid may be your own salary or job security decreasing.