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Ian R. Campbell -

Nov 07 09:09 AM

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Have you thought about the effects of a reversion of manufacturing jobs to the U.S.?

I find most articles I read on the current U.S. unemployment situation (9.6% reported unemployment, but likely really more in excess of 17% depending upon you believe, deal with U.S. unemployment at a ‘macro level’ that I believe broadly to be based on an underlying assumption that no real a structural difference has occurred after (in particular) 1999 in the U.S. economy, its place in the macro-economic world vis a vis its trading partners, and hence in the U.S. labour market – or alternately that the U.S. will simply ‘motor along’ to new technological development or ‘something else’ that will restore the U.S. labour force to a ‘full employment situation’ over time.

As I see things "there are jobs and there are jobs", and ‘high level’ comments on U.S. unemployment really don't say much to me. However, Sector by sector job creation or loss analysis does. From my perspective the U.S. jobs that need to be created (as I see things) are long-term manufacturing jobs in circumstances where two overriding things militate against the U.S. and the (or any) U.S. Administration succeeding in this, being: (1) ongoing and continual technological change in manufacturing processes that are eliminating jobs, not creating them, and (2) the differential in labour rates between what U.S. manufacturing workers expect to make and what manufacturing workers (including incremental product transportation costs) are paid in the developing economies. I don't see much the U.S. Administration can do to offset these two issues, short of introducing serious trade protectionism and tariff policies. I don't see either of those things as practical for a number of reasons, not the least of which are the length of time it would take to implement such policies, and for such policies to then 'work themselves through the system'. Moreover, I think such policies inevitably would lead to inflationary pressures on U.S. consumer prices and further reduced U.S. Main Street living standards - aside from repercussions from the U.S.'s principal trading partners.

Topics:

U.S. Economy, U.S. Unemployment, Manufacturing Jobs, Labour - Rates, Labor - Rates, U.S. Administration, Product Transportation Costs, Trading Partners, Protectionism, Living Standards

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