As the cost of doing business in China rises, U.S. manufacturing could be on the verge of a renaissance. But that won't necessarily mean a flood of blue-collar jobs.
In the past year, the conversation about U.S. manufacturing has undergone a quiet but remarkable change. Gone is much of the doom and gloom about the death of American factories. Instead, many now seem certain that industry is due for a comeback here at home.
The latest murmurs of good news came last week, when Cook Associates released the results of survey finding that 85% of manufacturing executives expected at least some kinds of factory work to return to the U.S. from overseas. The firm polled roughly 3,000 executives at small and mid-size manufacturers, about two-thirds of whom said their companies were currently manufacturing or outsourcing work abroad.
What could drive the revival? Rising wages in China, to start. Workers there are still cheap -- in the country's southern manufacturing hub, they earn just 75 cents an hour -- but they're not as cheap as they used to be. According to the American Institute for Economic Research, the average hourly wage in China doubled between 2002 and 2008. The country's currency has also risen gradually since 2005, from about 12 cents per yuan up to roughly 15 cents.
Pile on the logistical headaches that come from coordinating operations across the Pacific, as well as high fuel costs that make shipping more expensive, and all this has some business people considering a move back to the states. For some kinds of work, at least. In August, Boston Consulting Group released a report predicting a global realignment in the manufacturing sector. By 2015, the firm believes that many kinds of production will be just as cheap in the U.S. as in China, especially in low volume, heavy goods where labor only makes up a small part of the cost equation. Those include products like car parts, construction equipment, and appliances. Not everything is moving home. Textile mills in South Carolina? Don't hold your breath.
Factories are about to disappear from Shenzen. They'll still be there, churning out iPods, TVs, and pretty much whatever else you can imagine. But they'll cater more to China's domestic market, which is expected to grow exponentially in the coming years. Meanwhile, factories would move back to the United States to build products for sale in North America.
So we could one day be seeing more made in the USA labels. But how many more American workers will be stamping them on? That's where things become tricky. One of the great misconceptions about America's manufacturing decline is that the country no longer builds things. That's simply not true. As the BCG report notes, the value of U.S. output increased by a third between 1997 and 2008, a period when the economy shed millions of manufacturing jobs. The culprit: productivity.
U.S. factories simply need workers than in the past. We've become exceptionally good at making products using very little labor and lots of machines. Think of that GM Superbowl ad with the oddly sympathetic robot arm that starts moping after it drops a bolt. That sulking hunk of metal is the real face of most U.S. factories.
Of course, someone has to operate all those robots. The increasing importance of technology on the factory floor has turned manufacturing into a high skill field, as the president of the Federal Reserve Bank of Cleveland noted in a recent speech. As manufacturers have laid off blue collar workers, they've been hiring more college grads. That means, even if BCG is right, and a return of U.S. factories creates 2 to 3 million domestic jobs, it won't be a cure-all for the problems that now afflict the labor market. Building things takes a degree. And the current jobs crisis has, more than anything, been about the plight of the undereducated male -- the kind of worker who increased productivity made redundant in the first place.
The return of more manufacturing would be a great boon for the U.S. But it doesn't mean yesterday's factory worker will get his job back.
Most of management theory is inane, writes our correspondent, the founder of a consulting firm. If you want to succeed in business, don’t get an M.B.A. Study philosophy instead
During the seven years that I worked as a management consultant, I spent a lot of time trying to look older than I was. I became pretty good at furrowing my brow and putting on somber expressions. Those who saw through my disguise assumed I made up for my youth with a fabulous education in management. They were wrong about that. I don’t have an M.B.A. I have a doctoral degree in philosophy—nineteenth-century German philosophy, to be precise. Before I took a job telling managers of large corporations things that they arguably should have known already, my work experience was limited to part-time gigs tutoring surly undergraduates in the ways of Hegel and Nietzsche and to a handful of summer jobs, mostly in the less appetizing ends of the fast-food industry.
Michael Anton actively courts controversy with his extreme views. But how much influence does he have in the White House?
Michael Anton warned last year that 2016 was the Flight 93 election: “Charge the cockpit or you die.”
Americans charged. Donald Trump became president of the United States. And Anton, the author of that now-notorious essay, is helping to fly the plane—running communications for the National Security Council.
Anton cuts a curious figure through the Trump White House. A thoroughly educated dandy, his writings are at the core of an effort to construct an intellectual framework around the movement that elected a president who has shown no inclination to read books and who speaks in an unpretentious New York vernacular.
"I’m a huge admirer,” White House chief strategist Steve Bannon said. “I think Michael is one of the most significant intellects in this nationalist movement.”
At the president’s behest, House Republicans will render what might be a final verdict on the Affordable Care Act in a high-stakes vote on Friday.
On Thursday, the Affordable Care Act celebrated its seventh birthday. On Friday, it just might celebrate a most unlikely reprieve.
In a take-it-or-leave-it message delivered by his senior advisers to Capitol Hill, President Trump late Thursday told bickering House Republicans they had one final opportunity to repeal and replace the health-care law they have decried since its enactment. At the president’s behest, Speaker Paul Ryan on Friday will call a vote on the American Health Care Act and dare recalcitrant conservatives to defeat it. If the bill fails, Trump plans to keep Obamacare in place and move on with other parts of his agenda—a move that would enrage conservative activists while conceding an enormous defeat for the new administration.
Comprehensive insurance, with benefits like maternity or mental-health coverage, could become unaffordable—if not unavailable—under the GOP’s replacement plan.
Get ready for the “mommy tax.”
One of the most powerful arguments against House Republicans’ embattled legislation to repeal the Affordable Care Act has been that it imposes an “age tax” by raising health-insurance premiums and out-of-pocket expenses for older, working adults.
More broadly, many health-insurance experts say, the latest round of revisions—which are still under negotiation—would undermine Republican promises to protect consumers with preexisting health conditions and could leave comprehensive health insurance virtually unavailable at almost any price on the individual market.
Party leaders postponed a House vote Thursday after President Trump and Speaker Paul Ryan failed to win enough support.
Updated on March 23 at 4:28 p.m. ET
Lacking the majority needed to pass their bill to replace the Affordable Care Act, House Republican leaders have postponed a planned Thursday vote, imperiling President Trump’s first major legislative priority.
The move was an indication that a series of meetings Trump and Speaker Paul Ryan had with reluctant members in the party’s conservative and centrist wings had failed to achieve a consensus. Members of the House Freedom Caucus left a meeting with the president early in the afternoon saying there was “no deal” as they pushed Ryan to move the bill further to the right. And for Trump and Ryan, the delay dashed their hope of voting to dismantle the law on the seventh anniversary of its signing by former President Barack Obama.
Donald Trump flaunted his elastic conception of truth in an interview with Time—but he may yet learn that facts are stubborn things.
How can anyone convince the most powerful man in the world of something he does not wish to believe?
It’s not an idle question. In a remarkable interview with Time’s Michael Scherer, President Trump flaunted his elastic relationship with truth. Instead of weighing evidence, he explained, he prefers to trust his gut. “I’m a very instinctual person,” he said, “but my instinct turns out to be right.”
Trump unrepentantly rehearsed his litany of false or unsubstantiated claims with Scherer. Was Ted Cruz’s father linked to Lee Harvey Oswald? “Why do you say that I have to apologize? I’m just quoting the newspaper.” (The newspaper in question is the National Enquirer.) Had the president tapped his phones? “A lot of information has just been learned, and a lot of information may be learned over the next coming period of time. We will see what happens.” Were there 3 million fraudulent votes cast in 2016? “Well I think I will be proved right about that too.”
The arrest of an Israeli American for making bomb threats points to the flaws in the narrative that many Jews have constructed about President Donald Trump and his supporters.
At a press conference in mid-February, Donald Trump said something that was, even for him, astonishing. He predicted that when authorities discovered the perpetrators of the anti-Semitic attacks that had broken out since his election, “It won’t be my people,” who had committed them. “It will be the people on the other side.” He repeated the thought later that month, reportedly telling state attorneys general that the bomb threats against Jewish Community Centers across the country may be “the reverse” of what they appear and may have been committed “to make others look bad.”
Democrats and officials of Jewish organizations officials were appalled. Jonathan Greenblatt, chief executive of the Anti-Defamation League, declared: “We are astonished by what the President reportedly said.” Steven Goldstein, executive director of the Anne Frank Center, which combats bigotry, asked, “Mr. President, have you no decency? To cast doubt on the authenticity of Anti-Semitic hate crimes in America constitutes Anti-Semitism in itself.” When the Trump adviser Anthony Scaramucci repeated Trump’s claims, Democratic Senate Minority Leader Charles Schumer called them “absurd and obscene.”
Two Princeton economists elaborate on their work exploring rising mortality rates among certain demographics.
Two years ago, the Princeton economists Anne Case and Angus Deaton published an alarming revelation: Middle-aged white Americans without a college degree were dying in greater numbers, even as people in other developed countries were living longer. The husband-and-wife team argued, in a study in the Proceedings of the National Academy of Sciences, that these white Americans are facing“deaths of despair”—suicide, overdoses from alcohol and drug, and alcohol-related liver disease.
The paper caused a stir in academic circles and in the media, and has remained in the public discourse following Donald Trump’s win partly on the strength of his support from these same middle-aged white Americans (the alive ones, to be clear). The paper, however, couldn’t answer the question everyone had: Why was this demographic in particular struggling? It couldn’t be purely the economic pain they faced in the wake of globalization; after all, European countries are also affected by globalization, and their residents are getting healthier and living longer. And non-whites in the U.S. are living longer than they used to as well, and they are subject to the same economic forces as middle-age whites and are struggling, at least in economic terms, even more.
The Wellesley professors find that status quo too permissive.
So they urged new norms that would eschew invitations to speakers like Kipnis. Their premise: “There is no doubt that the speakers in question impose on the liberty of students, staff, and faculty.” Knowing many will be skeptical of that premise, I present their argument at length, in their words, in the order that they appear.
After years of reported airstrikes in Syria, the Israeli ambassador in Moscow was suddenly summoned to explain his country’s recent attack.
In the fall of 2015, Russia and Israel held their first talks on “deconfliction,”a disconcerting, vague military arrangement, the aim of which was “preventing misunderstandings” in the Syrian civil war. Russia had just formally entered the conflict, and Israel had already been informally participating through occasional strikes on Hezbollah targets in Syria and some cross-border exchanges of fire. The purpose of deconfliction, it seemed, amounted to a diplomatic version of Ma$e rules: Stay out of my way.
But late last week, something changed. As Israeli jets returned from Syria after bombing a weapons convoy reportedly bound for their foe Hezbollah—allied with Syrian dictator Bashar al-Assad and Iran—Syrian forces fired missiles at them, sparking the most serious incident between the two countries in the six-year war.In a first, the Syrian anti-aircraft missiles triggered Israel’s missile defense system, which intercepted one of the rockets, causing debris to fall over neighboring Jordan. Last Friday, following the incident, an Israeli army official confirmed the Israeli strike on the convoy publicly for the first time.