My generation: missing the boom years?

[SteveR]

And after the companies lose customers in droves due to language and cultural issues, and the outsource employees drive up their salaries when they start wanting bmw's and ipods, the jobs will end up coming back here.

Or they will go to the next country where the cost of labor is very small and people are willing to do it for peanuts. Maybe Africa, Indonesia, Iraq? Who knows? I can't see the labor rate drop enough in the US to ever see these low skilled jobs come back here. Having working in manufacturing environments most of my life and seeing jobs move from US to Puerto Rico, to Granda, to Mexico, to Dominican Republic, to Costa Rica to China, etc.; I have some appreciation for the global nature of low and medium skilled labor costs. The US would have to have a major shift in wage structures and a total roll back of salaries with a corresponding decrease in the cost of living for this to happen. The labor unions would never allow this since they rely on high wage workers to fund their business too.

 

[Jay_Gatsby]

Or they will go to the next country where the cost of labor is very small and people are willing to do it for peanuts.  Maybe Africa, Indonesia, Iraq?  Who knows?  I can't see the labor rate drop enough in the US to ever see these low skilled jobs come back here.  Having working in manufacturing environments most of my life and seeing jobs move from US to Puerto Rico, to Granda, to Mexico, to Dominican Republic, to Costa Rica to China, etc.; I have some appreciation for the global nature of low and medium skilled labor costs.  The US would have to have a major shift in wage structures and a total roll back of salaries with a corresponding decrease in the cost of living for this to happen.  The labor unions would never allow this since they rely on high wage workers to fund their business too.

That would seem to be the way that third world countries become second world countries...and eventually first world countries. In fact, one could argue that's the best way to help the economies of third world countries, rather than just sending billions of dollars in US foreign aid or World Bank loans.

 

[unclemick]

Being a reasonably older phart - also mostly in manufacturing(aerospace subcontracting) - I observed the gradual movement from high wage states to lower wage(and tax) within the good old USA over the decades.

No reason the same principles shouldn't apply on a global basis.

Similarly - perhaps the global competition for baby boomers (those with assets to spend) will heat up more in years to come.

Being from New Orleans - chasing the tourist $ is a familar art form. LA and MS do some moderate recruiting of persons with pensions via some tax relief.

heh heh heh heh

 

[cute fuzzy bunny]

Or they will go to the next country where the cost of labor is very small and people are willing to do it for peanuts.

I was more thinking that the countries who develop more wealth and a desire to spend will end up buying stuff from us. We ARE the pre-eminent maker of overpriced crap that nobody needs but everybody wants...

 

[SteveR]

I was more thinking that the countries who develop more wealth and a desire to spend will end up buying stuff from us.  We ARE the pre-eminent maker of overpriced crap that nobody needs but everybody wants...

That would be great but what are they going to get from us that they can't make cheaper somewhere else? Try to find something that you use frequently, other than household comsumable items, that are actully made here? Seems like darn near everything is from China right now.

The market for rockets, bombs, aircraft carriers, and fighter planes is pretty limited. Drug manufacturing is ramping up in India and China and will eventually kick the US manufacturer's collective butts in cost in the next few years. They will dominate the Generics drug market because the US cannot compete on price. Non-US sources already make the bulk of the active pharmaceutical ingredients used by most US drug companies.

What can be make that the rest of the world can't make cheaper and/or better?

We seem to only be successful at providing natural resources (timber, minerals, refined ore, refined oil, etc.) high tech R&D, fast food, and consumer junk products all selling for $19.95 on late night TV.

So, where do ya'll see as the niche for US manufacturing?

 

[Howard]

Adam Smith, concentrate on doing what you do well, Sales and Marketing are where the US dominates, let someone else make it, let the US distribute and market it.

What are the preeminent brands in the world, and it sure as hell ain't Darkie Cigarrettes like in Singapore.

 

[Nords]

So, where do ya'll see as the niche for US manufacturing?

I think you're answering your own question.

The profit margins on intellectual property are much higher than on manufacturing. I'm not sure why the U.S. would try to compete on the latter when we have the potential to make more money on the former.

http://early-retirement.org/forums/index.php?topic=4733.msg82493#msg82493

 

[Jay_Gatsby]

I think you're answering your own question.

The profit margins on intellectual property are much higher than on manufacturing.  I'm not sure why the U.S. would try to compete on the latter when we have the potential to make more money on the former.

http://early-retirement.org/forums/index.php?topic=4733.msg82493#msg82493

The problem is getting other countries that have substantial manufacturing capabilities (including cheap labor) to recognize and respect U.S. intellectual property. Until they do, the ability of U.S. companies to capitalize on their intellectual property in such countries will be severely hampered.

 

[johnlw]

I've read both "Liar's Poker" and "Wall Street Meat". Both are excellent, very funny books.

I sure hope that Kessler is right about the intellectual capital that the U.S produces and that we will continue to be the leader in this area. However, when looked at closely, some of the arguments he makes may have some holes in them, and as time goes by, that lead may be eroded.

One of the prime points that Kessler makes is that things are invented here, not elsewhere. However, not just back office type work or manufacturing jobs have been offshored. Increasingly, design, architecture, and R&D type of work has been moved to other countries. One would have to think that a potential offshoot of this policy will be a shift of intellectual capital out of the U.S.

In addition, with regard to a statement in the post that was referenced: "But most of the money buys low-risk U.S. Treasuries, and Kessler makes the point that all those T-bills are backed by the tax payments from the high wages that high-margin businesses pay to programmers & engineers instead of to low-salary factory workers. ". Unfortunately, many of those high wage jobs held by programmers and engineers have been offshored to India or China.

 

[cute fuzzy bunny]

The profit margins on intellectual property are much higher than on manufacturing. I'm not sure why the U.S. would try to compete on the latter when we have the potential to make more money on the former.

Egggzactly. Can someone give me the list of innovative new products and marketing campaigns that made you want to spend twice as much on a product because its 'cool' that originated in India or China?

Granted the japanese are pretty dang good at coming up with stuff that makes you say "wow, thats interesting...but who the hell would want to buy a robot dog that craps scrambled eggs?". And the europeans come up with some pretty ordinary cars they get high margins on.

So giving away crappy low margin jobs to telephone sweat shops raises the economic levels in those countries, resulting in their wanting the bling bling. Cha ching.

 

[Jay_Gatsby]

So giving away crappy low margin jobs to telephone sweat shops raises the economic levels in those countries, resulting in their wanting the bling bling.  Cha ching.

That's fine, but companies that "offshore" jobs should offer serious retraining opportunities for workers whose jobs are going overseas. OTOH, many workers (if they were perceptive enough) should know which way the wind is blowing in regards to their jobs, and take advantage of things like tuition reimbursement, on-the-job training, internal training classes, etc... to ensure that they're able to transition into another job/career. As the Marines are so oft to say...improvise, adapt and overcome.

 

[wstu32]

i believe we have another nice run coming in stock market...
i am no expert, but i think people will start taking money out of real estate and put in the market.
its all about cycles!

 

[CybrMike]

Man, what are you guys talking about with this offshore nonsense? Bush says he is going to fix the problem and make science and math a priority again. Problem solved.

 

[Jay_Gatsby]

I'm a Republican, but never use the words "Bush", "fixed" and "problem solved" in the same sentence/paragraph!

 

[Rich_by_the_Bay]

The entire cycle you are pining for took place over maybe 20 years. If you retire at 50, you will have been saving for longer than that and you will gain (and lose) from similar cycles of your own.

Your worst enemy is failure to just dive in and do it. Now. Your very presence on this board suggests that you know this. Hope I am here at 80 to watch you showing the youngsters how to get rich like you did.