Few realize it now, but despite its current political unrest, regulatory uncertainty, unemployment, monetary policy, tax rates, and general lack of international standing, the United States is well-poised to take back its long-held position as THE leading global industrial power.
There is no reason why business, particularly blue-collar manufacturing jobs, shouldn’t be flowing back to this country. Neither China nor Mexico has proved to be the panacea that businesses had hoped they would be. Companies with operations there are constantly dealing with problems of quality control and theft of intellectual property.
In fact, recent studies have shown that the costs of labor have declined to such an extent that production on a per unit basis is hardly more expensive here than in the global sweatshops of Southeast Asia. There’s also the added benefit of good PR and lowering shipping costs.
That’s right, my fellow Americans: We’ve got ‘em right where we want ‘em!
The only thing left is for this country to find some leadership who is willing to provide incentives for business and a little backbone in the international community. Instead, the current administration which frequently floods the markets with uncertainty and can be best be described as “apologetically American.” It might be said best in Proverbs, that “Where there is no vision, the people perish.”
Even as many of the world’s manufacturing jobs were shipped abroad in the “Flat World” Movement (so-called because it culminated in 2005 with the publishing of Thomas Friedman’s The World is Flat), those occupations that required the most thinking have predominantly stayed stateside. Most management jobs in US-based firms are still here. After all, this country has many of the world’s best business schools. Most of the Engineering jobs stayed as well – perhaps because our Engineering schools rank among the world’s best.
For the most part the jobs that left this country were in manufacturing, and not necessarily because they were cheaper abroad. Many Americans simply haven’t wanted to get their hands dirty. Having been convinced that the US is the most educated, developed nation in the world, many feel that a college degree entitles them to a $100,000 per year desk job.
In what has become one of the biggest farces of modern times, higher education has largely failed the people of this country. Starting in the 1970s, the academic community (or should we say: “colleges and universities who charge tuition and reap hefty profits based entirely on their reputations, whether earned or otherwise”) began pushing the idea that every American should have a college degree.
All this despite the fact that half or more of the careers in this country don’t inherently require a college degree, and would easily be learned with simple job training. Instead, over the past 40 years this country has trained a generation of sociologists, art historians, and liberal artists.
It’s about time this country shed its arrogance, put down the Xbox controller, goes out and rolls up its sleeves and gets back to work. We have been presented with an opportunity not seen in this country in a generation to regain our prominence as a global leader in business. With Europe and much of the world still floundering, the US could drastically improve its global standing, if it can find its footing.
Production isn’t just coming BACK to the US, it some cases it is coming to this country for the first time. Volkswagen, Hyundai, and Czech tire company CGS are just a few foreign firms that have been increasing their US-based production operations.
Recently Bloomberg Business Week ran an article profiling Foxconn, the Taiwanese manufacturing company that produces many electronics for the world’s consumers. This exhaustive story proved very insightful, none more discerning than a simple image portraying what appeared to be woven awnings extending roughly 20 feet from the sides over several buildings on Foxconn’s campus.
The caption underneath read simply: Suicide nets.
That’s not exactly something we routinely worry about in this country, is it? Certainly not enough to install nets on office buildings.
We have it pretty good in this country. Strike that: We have it VERY good in this country. But it’s just about time we all woke up and realized that we can maintain our role as a global industrial leader, but not without working to earn it.
This blog is written weekly by Dock David Treece, a registered investment advisor with Treece Investment Advisory Corp. It is meant to share insight of investment professionals, including Dock David and his father, Dock, and brother, Ben, with the public at large. The hope is that the knowledge shared will help individuals to better navigate the investment world.