by Tyler Durden
There
are a plethora of reasons underpinning the fact that manufacturing jobs
are not coming back to the USA. Perhaps the simplest is purely
economic. As McKinsey notes in a recent report,
manufacturings' role in job creation shifts over time
as manufacturing's share of output falls and as companies invest in
technologies and process improvements that raise productivity. A
critical finding is that as manufacturing's share of national output
falls, so does its share of employment - following the inverted 'U'
curve below.
Manufacturing job losses in advanced economies have
been concentrated in labor-intensive and highly tradable (read
globalizable) industries such as apparel and electronics assembly. Thanks to the increased productivity and a
'high' credit-enabled standard-of-living, the US has simply priced itself out of the global manufacturing business
(and so is China as its GDP per capita rises). Unless Americans are
willing to put the twinkie (and iPad) down, those jobs will continue to
bleed overseas (to India based on the chart below) building the
ever-more self-fulfilling vicious circle of a nation dependent on
state-aid to survive as only the 'unlucky' few remain employed.
http://www.zerohedge.com/news/2012-12-21/why-manufacturing-jobs-are-not-coming-back
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