If all manufacturing was done in the US...?

Question

Over the years, we all know that most manufacturing has been outsourced to other nations because the cost of labor and materials is cheaper than in the US. This in turn keeps prices of products low. The main arguement I hear is that if they were manufactured here, the good would be more expensive.

However, if they moved manufacturing back to the US, wouldn't the inscrease of jobs, and thus money that can be spent on goods keep the economy stable? More jobs, equals more people spending money?

Answer 1

"Over the years, we all know that most manufacturing has been outsourced to other nations"... Wow... You really need to stop listening to popular press and get your hands on some relevant research. The vast majority of manufacturing jobs that were lost were lost to machines, not to foreign countries, and one country where this process is moving especially fast is... (drum roll) China. In absolute terms, China is losing manufacturing jobs faster than any country in the world; in relative terms, it may be second only to Brazil. The world as a whole is losing manufacturing jobs, and has been doing it since at least 1985.

Manufacturing does not have the significance you ascribe to it. Contrary to popular belief, wages in manufacturing in general are not particularly good (not every industry has a UAW-style collective bargaining agreement in place). In terms of employment, manufacturing is responsible for mere 11% of the U.S. non-farm workforce. All in all, manufacturing is going through the same transition agriculture went through between 1870 and 1970; in 1870, agriculture employed three quarters of all U.S. workforce, by 1970, the figure dropped to about 3%...

Answer 2

In a global open economy accepted wisdom says that goods should be produced where it is the most efficient. This gives the most benefit to all participants. All economists are in favor of this, but many politicians are against this for protective reasons. If you would move production back to a more expensive environment, this would only benefit the people who keep their jobs, but it would hurt everyone who has to buy their products more expensively. This means they will be able to spend less elsewhere which will cause job losses elsewhere. So the net benefit for jobs may be negative and certainly no optimal production skills are applied, which may even harm a country more in the long term.

Also keep in mind that even where other countries are less advanced in the production chain and have cheaper labor, this will most likely be temporarily. They will get better skills and more disposable income, which creates a more level playing field in the long term. If in such a scenario you have not exploited your full potential, you will be left behind over the long term, which will be far more disastrous than some job losses in the short term.

Answer 3

No they do no longer. some might declare that tax might reason different international locations to tax products made in and imported from usa. (What products made in usa?) besides, there's a much greater hassle-free answer: never Tax firms on something. place the tax on the products and centers while they are offered by way of the tip consumer. for the reason that bisinesses function on a income margin, that would decrease the fee to the patron because of the fact the agency does no longer be marking up that fee as overhead and including that markup to the acquisition value. All income of a company is very own income to somebody receiving it besides. Tax that income. difficulty solved. Oops. government does in contrast to that. They could no longer use that form of a equipment to manage what they choose to administration!

Answer 4

You are right but that is not the way the big companies look at it. What they want is higher profits NOW. Even if they're shooting themselves in their collective foot by killing off the consumers. When we have no more money, we will stop buying their c**p.