Can American Manufacturing Survive Global Trade?
If you live in North America, you have probably come in contact with the harsh reality that blue collar manufacturing and industrial jobs are becoming more scarce every day. The fact is, manufacturing within the United States of America has been in decline for years. It has only been in the last two decades that this decline has become painfully obvious. The global market, that is, trade with foreign nations, is fueled by cheap labor and economic conditions favorable to industry growth. Many nations competing for their place in the American marketplace have modern economies that are literally in their infancy.
The Chinese economy happens to be prime for growth, inexpensive manufacturing, and plenty of available labor. But the Chinese imports are really only the tip of the iceberg. American manufacturing and industrial factories are also in competition with Japan, Indonesia, Vietnam, Mexico, Taiwan, India, etc. Visit David Pulman for more info. The lower costs of labor needed for industrial manufacturing are only one factor in the equation of demise for the American labor force.
Environmental awareness in the United States actually works against American companies in regard to overall expense. Environmental awareness is the right thing to do, however it comes with a price. The cost of waste disposal, operational permits, certifications, audits, and screenings are not free. American rules and regulations regarding environmental responsibility are more stringent than many other parts of the world. In North America, emissions into the atmosphere are also heavily regulated at levels unlike many other nations.
Liability is another aspect of doing business in the United States. Industrial accidents are at an all-time low, however accident victims are compensated more here than anywhere else. Liability insurance is at a record high with no signs of relief. This is a direct result of a record number of lawsuits and legal actions taken against companies. Many of the court battles are justified, but unfortunately many are simply attempts at working the legal system for easy money. Regardless of the outcome in the courtroom, the costs associated with litigation are staggering, hence much higher insurance rates.
Health insurance costs can also add to the expense of American industry. The United States has higher insurance costs per employee than most other civilized countries. The reasons for this are complex, but the result is not favorable for American manufacturing. Add in rising fuel prices, increased shipping costs, rising utility rates, and of course unaffordable property taxes, and we have a formula for failure.
American manufacturing needs to use lean manufacturing techniques, common sense management, and strategic marketing to grow their market share in relation to overseas companies. The American government must also be diligent in enforcement of fair trade with countries where labor and economic conditions provide cheap products for the American consumer. Only time will tell if American industry can survive the global marketplace.
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