Can American Manufacturing Compete With China?
A recent study by the U.S. Bureau of Labor Statistics found that in 2004 (the most recently available statistics) Chinese manufacturing companies compensated their employees at three percent of the average American company—$0.67 per hour in china compared to $22.87 in the US.
With many welding functions easily moved to overseas production centers, this disparity should give pause to both employers, who will need to compete with companies that do take advantage of cheap foreign labor, and welders, who could lose their jobs as a result. There are several measures that can be taken to even the playing field: pressuring the Chinese government to stop artificially pegging its currency to the U.S. dollar; imposing tariffs on imports from low wage countries; offering American companies tax breaks/financial incentives; and more. However, all of these efforts combined will only reduce the wage disparities by small margins.
A column by Bill Fink in the San Francisco Chronicle argues that outsourcing unskilled “bolt-tightening” jobs to countries with lower wages has been occurring since the beginning of the industrial revolution and is in fact good for America. Rather than lamenting the loss of unskilled jobs, Fink argues that we need to embrace it as an “opportunity to create even more jobs, even more business—as long as they’re willing to innovate.”
Cheap labor is the reality of a global economy, but it doesn’t mean the end of American manufacturing—or at least it doesn’t have to. The question, then, is not how to bring foreign wages in line with American wages, but how to keep American manufacturing strong despite lower foreign wages.
What do you think? What can be done to keep American manufacturing strong despite stiff price competition? What are the strengths and value propositions that domestic manufacturing has to offer that cannot be co-opted by overseas competitors?
Average (Not Rated)
January 25th, 2007 at 11:52 pm
Has anybody heard of this company http://WWW.hytechapps.com check it out?
Replaces argon with hydrogen, no carbon build up. Just water vapor.
January 28th, 2007 at 2:04 pm
Vic Edelbrock has proven that it’s still possible to manufacture “in the U.S.A.” and make money. I’m not averse to purchasing products made in China, but I’m
not about to bet the company on these items. All of my hand tools are Sears
Craftsmen. They come with a lifetime warranty and are made to such a high
level of quality that they should never break.
One has to ask a fundamental question when purchasing tools: do you want
it cheap or do you want it to last? Professionals will always select the
superior solutions. Knowing that your tools are guaranteed for life incurs a
high level of confidence,.
February 24th, 2007 at 8:58 pm
Those Who Can - Do
Those Who Can’t - Teach
Those Who Can’t Teach - Teach Teachers
Those Who Can’t Teach Teachers - Become Politicians
Any More Stupid Questions Why Things Are So Screwed Up?
March 4th, 2007 at 7:46 pm
it is true that jobs have alway been out sourced.but not in the #’s that they are in this country now.up to this generation the one before us left us a better quality of life in the usa… it is sad to say that most americans will not for their kids.
we were told to get a high school education then go to work for a airline car mfg. or trucking co. for a long time that has worked .. bill made the cars that jack (who worked for the airlines )bought . tom bought the airline tickets with the money he made delivering the car parts…now most of the money comes from housing and entertanment. buying selling moving …going see , do, having fun …. we are getting lazy and less skilled … soon the land will be developed around most big cities so there will be less goods to truck .. smaller checks to buy airline tickets and cars ,well it’s hard to buy a new one on $10. an hour after saving for your retirement and your medical ins.
we are told now not to save for our kids education let them pay for it.. with a degree costing as much as a house or more …jobs paying less when they complete it.. us taxing them to death to pay for our old sick butts that thought 30 year pensions meant money in the bank……oh! when was the last time you heard ssi was going broke … and they still take it out of our checks ever week and use it for all kind of gov’t give aways for people that never pay into it.
i know $22. an hour is a good wage . but it lets me drive a 2000 model truck live in a nice house and yes it bought both my miller mig welder and my plasma cutter that i bougth from sidney lee in griffin ga.
do you think that maybe $ 10,000,000 or more for the ceo just might be the problem…..we are stock holders now.we can vote(even if its time for a 3th party) that rep. the people in the middle.
for now i have a plan get out of debt save all that i can and get my health in the best order possible…and play paw paw on mondays my one day off .. please excuse the spelling and anything that might have rubbed you the wrong way..
April 7th, 2007 at 2:26 pm
Sure we can compete with China with their low wages and low overhead. In World War II we comnpeted against Germany and Japan who used slave labor to do their work while we had women Heliarc welding in California - getting decent wages - building airplanes and eating ice-cream on their breaks. Another example is the Japan of today. They have a very high standard of living there yet they kick butt in low cost manufacturing. Look at Sony, Toyota, Panasonic, and Honda to name a few companies that compete regardless of wages. But compete we will. The way we do it is with greater efficiency, greater discipline, more pride, greater creativity, better communication, less corruption, better incentives, and greater desire. These are qualities that American capitalizm cultivates. As long as we can protect our democracy and minimize corruption our country will continue to be the best place on earth for profitable ideas that make the world a better place. It all comes with a price. We can't always have things the way that we want them. We've got to be open minded and steadfast in doing our generation's part to protect our standard of living and our freedom to pursue happiness.
June 14th, 2007 at 2:06 am
“Yes” America can for sure compete the Chinese, if labour is the only cause it could be compensated with technology upgradation, features of the prodcuts will compete with price, extended warranty could be the key to sustain in the world market.
It is only the perception that the chinese products are economical & carries one to one features. The reality could be something else. The labour cost alone cannot pull down the cost, though determental.
August 5th, 2007 at 5:22 pm
I think one of the most difficult things to overcome is locating an American Manufacturer. I have a product but cannot locate an American manufacturer, this product line is 100% “made in China”. I choose to have my product “made in the USA”, but it is very difficult to find one.
Please reply to my email if you have ideas for locating the correct American company for product manufacturing.
Thank you,
Scott E. Mittlestadt
September 17th, 2007 at 10:13 am
The bottom line is JOBS. The U.S. lost 46,000 manufacturing jobs in August 2007. More significantly, the ongoing losses are taking a cumulative toll on communities throughout the country. We need to adequately enforce our trade laws, and hold countries like China accountable for illegal trading practices such as currency manipulation. Otherwise, we’ll continue to shed manufacturing jobs.
http://www.manufacturethis.org
October 2nd, 2007 at 10:54 am
Please share your stories about lost manufacturing jobs.
The Alliance for American Manufacturing is a national, non-partisan group dedicated to strengthening U.S. manufacturing. AAM’s blog, ManufactureThis.org, covers issues related to U.S. manufacturing jobs and is compiling firsthand accounts of factory closings and lost jobs.
AAM invites people to share their stories about lost manufacturing jobs, either by emailing Steven Capozzola at scapozzola@aamfg.org, or by posting a comment directly on the blog, http://www.manufacturethis.org.
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February 2nd, 2008 at 6:05 pm
Just wanted to say Hello to everyone.
Much to read and learn here, I’m sure I will enjoy !