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re: Made in the USA. Is it possible to bring back manufacturing jobs?
Posted on 2/20/17 at 9:49 am to bhtigerfan
Posted on 2/20/17 at 9:49 am to bhtigerfan
quote:
This is the main crux of my question.
The 2 largest pros of manufacturing products in 3rd world countries is cheap labor and lack of regulations (mainly labor and environmental regs). The biggest con of overseas manufacturing is transportation costs and the time involved to ship products.
Can a huge decrease in corporate taxes, some regulations, and the huge decrease in transport costs make it more cost effective to manufacture in the US?
There's a lot more that goes into it than just labor costs and environmental regulations and, again, it's very dependent on the particular industry and company.
Lay some basic ground rules:
Are you going to be pricing to market or have uniform pricing?
Do you want to be as close as possible to your consumers or do you want centralized supply chains?
Does spoilage matter?
Are you reliant on joint ventures overseas or do you own your operation lock, stock, and barrel?
Is your product commoditized or close to becoming commoditized?
There's a lot of things that these companies have to think about, and straightforward cut taxes/de-fang regs/tax imports approaches aren't going to account for a lot of it.
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Posted on 2/20/17 at 9:50 am to bhtigerfan
Manufacturing in the USA has been on the uptick for several years.
The catch is, robots are doing a lot of it.
The catch is, robots are doing a lot of it.
Posted on 2/20/17 at 9:51 am to Speedy G
quote:Many people are surprisingly.
If American consumers are willing to pay higher prices, which they probably are not.
Would you pay 20-30% more for a product that has a better warranty (that can be serviced in the states) and is clearly a better made product?
Many people are willing to pay more for a better product. It's usually a better financial decision to pay more for a superior product which performs better and lasts longer.
Posted on 2/20/17 at 10:08 am to bhtigerfan
kind of depends on what you mean by "bring back"
we can probably re-shore some, but we're not going to revert to manufacturing jobs being as common as in decades past
we can probably re-shore some, but we're not going to revert to manufacturing jobs being as common as in decades past
Posted on 2/20/17 at 11:38 am to bhtigerfan
quote:You're right, it's expensive to be poor. Take a simple example like work boots. A $50 pair might fall apart in 3 months, while a $100 pair might last a year. It's obviously better to buy the $100 pair, but a poor person that just needs a pair of boots right now may not have that extra $50 at the moment. Also, finances. If you have extra money, you can invest and make even more. But if you are poor, you might end up paying bounced check fees, or some banks even leech your money if your account isn't fat enough.
Many people are willing to pay more for a better product. It's usually a better financial decision to pay more for a superior product which performs better and lasts longer.
That's capitalism, I get it. I'm not hating, in fact I love it. I'm just saying we need to recognize its "flaws" (in quotes because capitalism as a pure ideology is flawless, but the end result on society may be flawed).
So back on topic, the only way to bring back manufacturing jobs is if the cost of US labor gets cheaper (I don't think many want that), the cost of foreign labor gets more expensive (which would probably mean the US's power globally will be reduced, and I don't think many want that), or if a lot of US companies voluntarily cut their own profits by manufacturing here and avoiding automation (
). I guess what I'm saying is, it's not going to happen without a lot of government strong-arming and market intervention. If that happens, we might as well go full communism, right?
Posted on 2/20/17 at 11:44 am to bhtigerfan
The "problem" (if there is one) is automation. US manufacturing output is fine. It just requires less people. The rust belt isn't going to be suddenly flooded with blue collar manufacturing jobs again, no matter what they may think.
Posted on 2/20/17 at 11:51 am to Korkstand
quote:That's what I'm asking. I don't see labor costs decreasing in the US, but, can it be offset by decreasing taxes, regulations, and lower transportation costs?
So back on topic, the only way to bring back manufacturing jobs is if the cost of US labor gets cheaper
Posted on 2/20/17 at 11:53 am to 90proofprofessional
Wow, from 38% in the 40's to less than 10% today. 
We've truly become a consumer nation.
We've truly become a consumer nation.
This post was edited on 2/20/17 at 11:55 am
Posted on 2/20/17 at 11:57 am to bhtigerfan
quote:I assume you mean should we lower corporate taxes on the condition that jobs are brought home? It couldn't work that way (because some businesses can't use foreign labor, so it wouldn't be fair), it would have to be the reverse - a tax penalty for using foreign labor. But then how far-reaching would that go? Would they also be penalized for using foreign-made raw materials and parts? If so, how different is that than a tariff (which you apparently oppose)? And if there would be different rules for those who directly employ foreign labor and for those who just outsource/import/whatever, then how do you stop them from reorganizing to just continue using the foreign labor the cheapest way?
Can a large reduction in corporate taxes offset the labor costs in the US, versus labor costs and the transportation costs of manufacturing abroad?
Capitalism hates jobs. Manufacturing employees are labor expenses, not assets.
Posted on 2/20/17 at 11:58 am to bhtigerfan
I believe that in the short term, manufacturing jobs as we know them will come back to an extent but right now there is a infant elephant in the room called 3D printing that in the future will change how "manufacturing" will be done.
Exactly how is just speculation but it'll change our lives much like the 90s Internet revolution has done.
Exactly how is just speculation but it'll change our lives much like the 90s Internet revolution has done.
Posted on 2/20/17 at 12:55 pm to bhtigerfan
quote:I don't think so.
That's what I'm asking. I don't see labor costs decreasing in the US, but, can it be offset by decreasing taxes, regulations, and lower transportation costs?
First, I don't think the transportation costs are very significant. I don't have any hard figures, but the volume and scale of overseas shipping makes it very cheap. I believe you or I as an individual low/no-volume shipper can have a 40-foot container with 20 tons of shite in it shipped overseas for only a few thousand dollars. That's nothing, and it's likely much, much cheaper for a corporation that's moving a lot of stuff.
As far as decreasing taxes and regulations, I'm having trouble understanding your proposal and its implementation. As I mentioned, you can't give tax breaks to companies for "bringing jobs back". What about, say, restaurant chains that can't really use foreign labor to begin with? Why should only the companies that have been doing us a disservice by using foreign labor get these new benefits? So this concept would have to be implemented as a penalty for using foreign labor, and any tax breaks you want to give would have to be across the board.
So then what you are doing is essentially imposing a tariff on foreign labor. That leaves an obvious loophole to exploit, which is just outsource the finished product (with those labor costs baked in) and avoid your new penalties. So then to close that loophole, we are back to a tariff, which you seemingly oppose.
Posted on 2/20/17 at 1:05 pm to Korkstand
quote:No, I mean cut corporate taxes across the board for everyone.
I assume you mean should we lower corporate taxes on the condition that jobs are brought home?
Would companies be able to compete cost-wise in the US if corporate taxes were much lower, less regulations that costs them, and less transportation costs to manufacture in the US versus abroad?
Basically, is there anything we can do to equal the playing field to where the costs of manufacturing in the US could offset the cheap labor abroad, without lowering wages in the US?
This post was edited on 2/20/17 at 1:10 pm
Posted on 2/20/17 at 1:25 pm to bhtigerfan
quote:Oh, well the answer to this is easy: hell no.
No, I mean cut corporate taxes across the board for everyone.
Would companies be able to compete cost-wise in the US if corporate taxes were much lower, less regulations that costs them, and less transportation costs to manufacture in the US versus abroad?
Think about it... if your personal income taxes were lowered, would you then seek out a lower-paying job so that your take-home pay remained the same? Sounds ridiculous, doesn't it? So why would a profit-seeking company do something similar? They will say "thank you very much" for the lower taxes, and then continue to do what any logical entity would do, and that is reduce expenses however possible.
Posted on 2/20/17 at 1:33 pm to Korkstand
quote:True. They're not going to bring back manufacturing jobs to the US out of the kindness of their hearts.
Oh, well the answer to this is easy: hell no.
Think about it... if your personal income taxes were lowered, would you then seek out a lower-paying job so that your take-home pay remained the same? Sounds ridiculous, doesn't it? So why would a profit-seeking company do something similar? They will say "thank you very much" for the lower taxes, and then continue to do what any logical entity would do, and that is reduce expenses however possible.
They would just take advantage of the tax breaks and the cheap overseas labor and really improve their bottom line.
Well then, I guess the corporate tax breaks should only be given to companies who move manufacturing back to the states or are already here.
Thanks for pointing that out.
Posted on 2/20/17 at 1:46 pm to Strophie
Interesting that someone brought up the US percentage of the global market, and how it makes sense to manufacture close to the customer base. With a global economy, the manufacturing can manufacture anywhere.
In the US, we have made it extremely disadvantageous to ourselves to manufacture in the US. It's easy to dismiss those jobs by saying, "Those are low paying jobs and are never coming back."
Higher wages, our regulatory environment, our taxes, and trade agreements all make it inevitable that the jobs that can go overseas, will go overseas.
What can we change? Lower wages is probably out, especially if we bring more jobs the US and create a higher demand for workers. Decreasing the regulatory burden can be done fairly easy. Renegotiating trade agreements can be done as well. Lower corporate taxes can also be done - especially lowering taxes that allows offshore money to be repatriated.
In the US, we have made it extremely disadvantageous to ourselves to manufacture in the US. It's easy to dismiss those jobs by saying, "Those are low paying jobs and are never coming back."
Higher wages, our regulatory environment, our taxes, and trade agreements all make it inevitable that the jobs that can go overseas, will go overseas.
What can we change? Lower wages is probably out, especially if we bring more jobs the US and create a higher demand for workers. Decreasing the regulatory burden can be done fairly easy. Renegotiating trade agreements can be done as well. Lower corporate taxes can also be done - especially lowering taxes that allows offshore money to be repatriated.
Posted on 2/20/17 at 1:46 pm to bhtigerfan
With automation very few jobs could be added.
My cousins husband went to Japan in 2011 to talk about bringing more Toyota jobs to Mississippi. They had federal money and tax breaks, but due to local and state politics they lost out on bringing Prius jobs.
Trump may run into this problem as well. State and local poltics will hurt just as much as federal politics.
My cousins husband went to Japan in 2011 to talk about bringing more Toyota jobs to Mississippi. They had federal money and tax breaks, but due to local and state politics they lost out on bringing Prius jobs.
Trump may run into this problem as well. State and local poltics will hurt just as much as federal politics.
This post was edited on 2/20/17 at 1:49 pm
Posted on 2/20/17 at 1:51 pm to Korkstand
quote:
I assume you mean should we lower corporate taxes on the condition that jobs are brought home? It couldn't work that way (because some businesses can't use foreign labor, so it wouldn't be fair)
I think the idea is to lower corporate taxes across the board. I think the ideal rate is zero, for corporations. That would provide a great incentive for corporations to bring operations back to the US.
Posted on 2/20/17 at 2:13 pm to Korkstand
quote:
Think about it... if your personal income taxes were lowered, would you then seek out a lower-paying job so that your take-home pay remained the same? Sounds ridiculous, doesn't it?
I don't expect all jobs to come back, but cutting corporate taxes to zero would bring some back, or prevent some from leaving. We would have to give the companies some assurance that the taxes would remain at that level and won't be jacked up by folks wanting corporations to "pay their fair share".
We also need to figure out a way to use the resources freed up by jobs going overseas. We bring in 10's of thousands of H1-B visas, while simultaneously laying off workers here in the US.
I'm not saying that they guy who works in the factory should be hired as a programmer for Microsoft, but that we used to explain the manufacturing jobs leaving as no big deal, because we were transitioning our workforce to more specialized jobs in IT and other technical fields. Now we've decided to replace them with cheaper offshore workers, too.
Posted on 2/20/17 at 2:13 pm to bhtigerfan
The imports of Volvo may decrease and that could help.
Posted on 2/20/17 at 3:06 pm to MizzouBS
quote:Volvo?
The imports of Volvo may decrease and that could help.
Wat?
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