Thursday, May 28, 2015 04:12pm
North Adams, MA now: 73 °   
Send news, tips, press releases and questions to info@iBerkshires.com
The Berkshires online guide to events, news and Berkshire County community information.
LOG IN | REGISTER NOW   

Home About Archives RSS Feed
The Independent Investor: Made In America Returns
By Bill Schmick On: 01:01AM / Friday June 15, 2012
Important
0
Interesting
0
Funny
0
Awesome
0
Infuriating
0
Ridiculous
0
Factory jobs are returning to the United States. So far it is only a trickle but the point is that the trend has begun to reverse and that’s good for America.

The number of manufacturing jobs in this country has been growing over the last two years. Factories have added 300,000 jobs since 2009. In the first month of this year alone manufacturers have added 50,000 jobs, which was the biggest monthly increase in a year. Those numbers are positive and a good start but let's keep the gains in perspective.

Despite this recent progress, it still leaves us with 5.5 million fewer factory jobs than in July 2002 and 12 million less than we had in 1990. I don't believe we will ever recapture the number of manufacturing jobs the U.S. enjoyed back in the glory days of the 1950s. Remember that back in the day (right after WWII), America was practically the only nation left standing. As such, we had little in the way of competition and accounted for 40 percent or more of the world’s manufactured goods.

Over the next several decades, as both Europe and Asia rebuilt its export capacity, the U.S. experienced a dramatic loss of market share in everything from electronics to autos. Plants closed, jobs were lost and the country went through a wrenching reallocation of resources. But by the late 1990s, America had reinvented itself and emerged as the leader worldwide in high-value industries such as pharmaceuticals, software, aerospace and other sectors. 

The emergence of China, India and other emerging markets as low-cost producers of everything from toys to tin cans at the turn of this century triggered an exodus of American jobs as multinationals rushed to establish a foothold in these markets. However, that wave is receding as a combination of economic forces erodes these countries cost advantages. Ten years ago, a factory worker in China made 58 cents an hour. Today, wages are over $3 and are expected to double in the next three years. In India, although a worker may make only half what his American counterpart is making, if you factor in other costs such as productivity, transportation, rising real estate prices, duties and supply chain risks, it now makes more sense to make some goods here.

In addition, the global manufacturing process is increasingly focused on the production of high-value products and as such, labor costs are becoming less of an issue. For example, although labor is becoming more expensive in China, multinationals know that simply shipping the production of those goods to cheaper labor markets such as Vietnam, Indonesia and Mexico is not a viable alternative. These nations lack the infrastructure, skilled labor force, domestic supply networks and ability to produce on a large scale that is necessary to capture those sorts of manufacturing opportunities.

One example of that close to home is a friend’s experience in Vietnam. Several years ago she had attempted to set up a small factory to manufacture and export high quality hand bags from Vietnam. She found that even the most skilled and experienced Vietnamese textile factories were incapable of making a consistent quality product on time. Imagine the problems a Wal-Mart would have in the same area.

"Over the next five years the total cost of production for many products will only be about 10-15 percent less in Chinese coastal cities than in some parts of the U.S.," predicts a Boston Consulting Group study done in August of last year. At the same time, China and India are focused on increasing domestic consumption of goods and services as opposed to simply exporting as much as they can.

More and more of our multinationals are planning on supplying this huge consumer market with the products it now produces in-country for export. Under those circumstances, it makes economic sense to bring some of their production output back home in order to satisfy U.S. demand.

In the meantime, our work force has become lean and mean. America is now considered a "lower-cost" country by many foreign multinationals that are willing to build plants and equipment here. They realize that U.S. workers have had no wage inflation for years and are far more productive and flexible than other competing work forces worldwide. 

If the dollar weakens over the coming years, there could come a day when appliances, televisions, computer equipment, furniture, machinery and plastics could once again be produced in this country. Who would have thought?

Bill Schmick is an independent investor with Berkshire Money Management. (See "About" for more information.) None of the information presented in any of these articles is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at (toll free) or e-mail him at wschmick@fairpoint.net . Visit www.afewdollarsmore.com for more of Bill's insights.




0 Comments
     
News Headlines
Lanesborough Sets 2015 Town Meeting Warrant
5K Race to Raise Funds For C.T. Plunkett Reading Program
New Pittsfield Program Feeds Elementary Pupils For Free
Adams Officials Review Youth Center RFP, Projects
Pittsfield Auctions Off 54 Tax Liens for $667,000
Clarksburg Town Meeting OKs Budgets, Borrowing for Road Work
Local Pilots Provided Aid During Clarksburg Brush Fire
C-SPAN to Broadcast BCC Speech by Sen. Warren
North Adams Police Personnel Commended for Life-Saving Actions
Selectmen Approve Phase 1 Of Bridge Repair, Town Warrant

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (169)
Independent Investor (229)
Archives:
May 2015 (5)
May 2014 (1)
April 2015 (8)
March 2015 (6)
February 2015 (7)
January 2015 (9)
December 2014 (7)
November 2014 (4)
October 2014 (9)
September 2014 (5)
August 2014 (7)
July 2014 (2)
June 2014 (6)
Tags:
Debt Ceiling Stimulus Japan Jobs Crisis Commodities Housing Stocks Recession Interest Rates Oil Taxes Economy Election Rally Europe Energy Pullback Fed Deficit Federal Reserve Markets Metals Congress Debt Euro Bailout Selloff Greece Fiscal Cliff Banks Currency Europe Retirement Stock Market
Popular Entries:
The Independent Investor: Don't Fight the Fed
The Independent Investor: Understanding the Foreclosure Scandal
@theMarket: QE II Supports the Markets
The Independent Investor: Does Cash Mean Currencies?
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
The Independent Investor: Will the Municipal Bond Massacre Continue?
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Why Are Interest Rates Rising?
The Independent Investor: How Will Wall Street II Play on Main Street?
Recent Entries:
@theMarket: June Is Off the Table
The Independent Investor: Will Memorial Day Kick Off a Strong Summer?
@theMarket: Another Record High
The Independent Investor: Millennials & Money
The Independent Investor: Avian Flu Scrambles the Egg Business
The Independent Investor: Does Another Trade Pact Make Sense?
@theMarket: Buy on the News
The Independent Investor: Should You Manage That 401(k)?
@theMarket: Right Back Into the Range
The Independent Investor: Brazil Not For the Faint of Heart


Third Thursday May 2015
Pittsfield's monthly summer street festival, 3rd Thursday,...
Girls Inc. Awards 2015
Girls Inc. honored scholarship recipients at the annual...
Williamstown Memorial Day...
Williamstown marked Memorial Day with a parade on Main...
Cheshire Memorial Day 2015
Cheshire residents, veterans, and special guests follow the...
Adams Memorial Day 2015
Adams observed Memorial Day with a parade and a ceremony at...
North Adams Memorial Day 2015
Residents, veterans, and guests met at the Veterans...
Clarksburg Memorial Day 2015
Clarksburg held Memorial Day observances at Town Hall with...
Pittsfield Memorial Day 2015
Pittsfield celebrated Memorial Day on Monday with a parade...
Wahconah High Prom 2015
Wahconah Regional High School held its 2015 Prom at the...
Lacrosse: Wahconah at Taconic
Wahconah won over Taconic 13-3 Friday afternoon.
Lanesborough Memorial Day...
Lanesborough celebrated Memorial Day Sunday with a parade...
Lee High Prom 2015
Lee High School held its senior prom at Cranwell Resort in...
Sullivan School Memorial Day...
Students, faculty, veterans, and distinguished guests...
Lacrosse: Pittsfield at...
Brendan Leary led the Pittsfield boys lacrosse team to a...
T&F: Quad Dual Meet
Mount Greylock's track and field team hosted three other...
Baseball: Wahconah at...
"It was really cold out today, and I had to heat up my...
Third Thursday May 2015
Pittsfield's monthly summer street festival, 3rd Thursday,...
Girls Inc. Awards 2015
Girls Inc. honored scholarship recipients at the annual...
Williamstown Memorial Day...
Williamstown marked Memorial Day with a parade on Main...
Cheshire Memorial Day 2015
Cheshire residents, veterans, and special guests follow the...
Adams Memorial Day 2015
Adams observed Memorial Day with a parade and a ceremony at...
| Home | A & E | Business | Community News | Dining | Real Estate | Schools | Sports & Outdoors | Berkshires Weather | Weddings |
Advertise | Recommend This Page | Help Contact Us
iBerkshires.com is owned and operated by: Boxcar Media 102 Main Street, North Adams, MA 01247 -- T. 413-663-3384 F.413-664-4251
© 2012 Boxcar Media LLC - All rights reserved

Privacy Policy| User Agreement