Why has the US lost its manufacturing sector?

Question

I know an obvious answer is that those jobs have gone to nations with lower wages. But how have Japan, South Korea, and Taiwan managed to keep those industries while having high wages and standards of life? Why dont any American companies produce things such LCD televisions, cell phones, (exclude the iphone), digital cameras, and such? I would love to see our nations companies stay here and provide jobs here. I want to see high tech comsumer products with "Made in America" logos. I am concerned about our economy and the potential demise in research and development traditionally done here.

I know we lost labor-intensive manufacturing, such as cheap plastic toys, to china, but that is not what I am talking about. I am talking about comsumer level tech products, in which the nations above lead. I fear that the capital that we send there when we buy these products allows them to do better research and eventually develop even more high technology. Eventually they may produce products that are more knowledge-intensive and capital-intensive, such as jet-engines and computer chips. Then we would have lost all manufacturing.

I think this production problem will be further aggrivated by not allowing immigration into this nation. In the past, these low paid workers have allowed products made in the US to be priced a bit more competitive.

Answer 1

Because our economy has moved on to higher "value-added" work. People can make more money managing information than they can working an assembly line. Companies too.

Good book about the changes, with some ideas about how we could better deal with them.

"The World is Flat" by Thomas Friedman.

nerfy - Japan does provide comparable benefits to workers (and arguably better health care).

http://www.clair.or.jp/tagengo/general_pdf/en/EN08-07.pdf

I found it interesting that they specifically cite "health" benefits for people who "commit suicide due to excessive work".

Unionization in Japan exists, but is in decline, much as it is in the US. The tradition of unions working closely with management is better there, but it's getting better in the US.

http://en.wikipedia.org/wiki/Trade_unions_in_Japan

Answer 2

You've really narrowed your question so that it you think it fits your complaint. Why just a narrow set of consumer electronics? Why not computers or software or car audio devices or networking equipment or medical electronics equipment or factory capital equipment or cars or aircraft? (All of which are certainly made in the US).

Yet you are actually still wrong. Did you know a new LCD HDTV plant is being built in New Mexico? All of those things you mentioned actually ARE made in the US to some degree.

Inasmuch as there is some substance to what you say -- such as Japan specializing in a lot of consumer electronics the past 20 years -- it's a case of comparative advantage. National economies organize around doing what makes them best off, and importing the other stuff they need. That's not bad; it's good.

There is almost no excess labor floating around the US -- the job market is tight, the unemployment rate has persisted at a level that's so low just 10 years ago people would have thought it impossible to remain there. We don't have a lot of extra people available with the skills to make a lot of those consumer electronics items.

And there are some additional complexities to the issue. E.g., Americans got out of making TVs previously when it became unprofitable and unproductive. The Japanese continued making TVs, even though it was still rather unproductive for them, largely because they had access to very cheap capital (with near-zero interest rates resulting from Japan's deflation and lingering recession). Cheap capital makes for unproductive investments, and we've seen much of this in Japan the past 20 years -- which is a good part of the reason that the Japanese economy has badly sucked since 1990 (though perhaps all of this history is a complete surprise to you).

Answer 3

also to go with the lower wages you have more and bigger threats of law suits here. If something happens people try to sue the company. Businesses are required to keep so much insurance for works comp liability and the list goes on. Then there is all the rules and regulations that must be followed. How many other countries have the high cfc regulations that America does? A lot of these places just do not have to meet these standards and safety in the work place so can operate lots cheaper.

Answer 4

First, the inconvenient truth is not just the US, likewise other countries you'd mentioned including Japan, S. Korea, Taiwan, Germany, France, etc had all outsourced huge number of manufacturing jobs to China and other developing countries, according to Robyn Meredith, the author of The elephant and the dragon, she name this phenomena as Made by America in China and I call this as Made by in China. In fact only the high end consumer electronics product from Japan, S. Korea and Taiwan companies are made domestically within the countries.

Secondly, you mentioned why US companies don't produce consumer electronics, again the truth is the US had lost its lead in consumer electronics to the Japanese in the 80s and consumer electronics manufacturing is not its core competency. On the contrary, US strength is in design and R&D of core technology, there are tremendous amount of US technologies inside these consumer electronics product. As the same time US is the world leader in information technology, supercomputing, military, medical, engineering and aerospace, etc and a large percentage of these are made in the USA, and will continue to do so.

The continual outsourcing of generic manufacturing to other low cost countries had raised concern in many developed nations and had become major topic in politics today. For example, I live in Hong Kong, part of China, Hong Kong was a city well known for toy, watches and garment manufacturing from the 60s till the 80s, yet manufacturing jobs now contribute less than 5% of this city GDP. A large number of factories worker now in their 50s are out of jobs, yet Hong Kong is one of the most competitive cities in Asia, and its economy is growing at over 6%, and continuously transform to services industry.

Getting back to the issue with America, research indicates that outsourcing manufacturing jobs offshore does not make America less competitive. However, the issue is how America can assist those who spent half their life in manufacturing to switch.

Answer 5

Lost it's manufacturing sector?
The US primarily exports manufactured goods, 2/3 of all exports are manufactured goods, ahead of services and agricultural products. Most of those manufactured goods are high tech things; Electronic boards, airplanes, cars, data processing machines, turbo jets, medical devices, telephone equipment, and radio and TV broadcasting equipment.


The US has not lost it's high tech manufacturing sector, it has worked to improve the productivity in it, meaning fewer people are needed to produce more stuff.

Answer 6

The countries you mentioned DO NOT have high wages nor does most of the population have a high standard of living. The very low wages make it possible for the higher profits that we can not match in the USA. We outsource because it's cheaper.
I would also like to see make in the USA on the products I purchase.

Answer 7

ha! everyone is concerned that is why there are 'recession' headlines on all the major news sites. the only way we could get manufacturing back is to get american workers to accept lower wages and not be unionized - however the end result would be higher price tags for tech items- companies have to make up for insurance and pensions etc. i am not sure if Japan does that for their employees - most likely not.

Answer 8

ask any Boeing worker if 'unfastened commerce' or NAFTA has killed his activity and he assist you to be responsive to no. Now, did production jobs pass away united states of america of america? quite. grow to be it for sturdy motives? quite. As we are all fairly keenly conscious recently, UAW workers making $28 an hour plus fringe advantages in basic terms can no longer build automobiles at low sufficient value for human beings to volunteer to purchase them. no longer whilst Mexicans can and do build the comparable or greater effective high quality automobiles [Ford mentioned this] at the same time as being paid $5 an hour and fairly much no advantages. Economics is a real challenge and uneconomic salary pacts have real effects. The UAW is all yet long gone using fact their plenty touted 'deal' with the automakers ended up pricing the ensuing automobiles out of the marketplace. the comparable is authentic of steelworkers, rubber workers, and comparable unions. whilst the comparable high quality product could nicely be geared up in China for one million/4th the full value [as is authentic at the instant], the two the product is going to be produced in China or the staff in united states of america of america are going to could desire to take some extreme pay cuts. *** Japan confirmed what takes place once you overlook with regard to something of the international and % up. You grow to be backward. all your industries fall at the back of. have been it no longer that all and sundry something of the far East grow to be in comparable straits on the time, Japan in all risk could have been invaded and conquered. in spite of your innovations, supply it some many years and precisely the that should ensue in an remoted united states of america. we might grow to be backward. we could be fairly poor. and since the land we occupy is fairly effectual, we could be invaded and conquered by skill of greater perfect technologies that we would possibly no longer be able to defeat. then you definately and your descendants could be taking orders in chinese language -- once you're alive in any respect. Frankly, China has a lot of persons now which you and yours does no longer be necessary in any respect and a bullet may be the main inexpensive answer from their point of view.