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FIELDS: ‘Insourcing’ to America
Conditions are ripe to reverse outflow of jobs
Question of the Day
The prospect of hanging, as Samuel Johnson observed, “concentrates the mind wonderfully.” We’re counting on that kind of concentration to keep us from falling off the infamous “fiscal cliff.” While Republicans and Democrats argue about whom to blame if they let the worst happen, we might look outside the box to find something beyond partisan gloom and economic doom.
We’ve given up our role as the manufacturing colossus, which blinds us to the reality that the times, they are a-changing — again. “For decades,” writes James Fallows in The Atlantic magazine, “every trend in manufacturing favored the developing world and worked against the United States. But new tools that greatly speed up development from idea to finished product encourage start-up companies to locate here, not in Asia.”
He found his epiphany when he visited a factory in China that makes computers, smartphones and games for brands such as Apple, Dell and Nintendo, enabling the American brands to exploit cheap labor in China to keep prices low in America. We’ve known for a long time that conditions are grim and often intolerable in Asian sweatshops, but we’ve turned a blind eye. We got the goods at the right price, and everyone was happy — or so we wanted to think. We rationalized that the workers who made these wondrous machines were happy to have jobs, and if some factories put landing nets under dormitory windows to catch workers making suicide jumps, well, we wouldn’t think about that.
We’ve ignored or overlooked as well how Chinese worker attitudes are changing, making their compliance with economic necessity more complicated as invention and innovation here raised our ability to compete.
Even in communist China, it was inevitable that workers would want better lives for themselves. Many are the second generation off the farm and have no desire to till the land of their fathers. Many never did. Instead, they see their future in an urban world and want a piece of the prosperity pie they helped bake.
One of the more telling details concerns Chinese women. Women, with diligence, smaller hands than men’s and more careful attention to detail, usually are better at high-precision work. They learn new techniques more quickly than men. Many have climbed to high positions at the factory. As a result, they’re leaving for better jobs and easier conditions.
Asian workers haven’t yet found their Charles Dickens or Upton Sinclair to tell their story of miserable, soul-killing conditions and shape their yearnings and aspirations into a moving narrative. Even if that never happens, they’re likely to demand more money, and that will diminish one of the major advantages they have held over the West.
Wages in China already are about five times higher than as recently as in 2000, “and they are expected to keep rising 18 percent a year,” writes investigative reporter Charles Fishman, who in The Atlantic predicts an “insourcing boom” for the United States. As U.S. labor union priorities change, from seeking higher wages to keeping jobs, America becomes more competitive. Mr. Fishman cites the two-tier wage scale at General Electric’s Appliance Park in Louisville, Ky. Appliance Park once was known as “Strike City,” where it was impossible to keep workers on the job and labor costs down. Workers have agreed to lower wages for new workers in return for adding and protecting jobs, and production at Appliance Park has grown. The low cost of natural gas needed to operate a factory, which is a quarter of what it is in Asia, compared to the high cost of fueling cargo ships to Asia, is a large incentive to increase production here.
Over the past several decades, while manufacturing was moving from the rich countries to the poor countries, cost-efficient technology was developing swiftly in America. Ideas became reality. Innovation in three-dimensional printing, for example, accelerated the process of designing a product here and making more of it here as well.
Manufacturing in the United States probably will never be what it was before “the mighty boiler” that was the Midwestern manufacturing heartland disappeared into the Rust Belt. Still, Americans always have had the gift of getting smarter. America has been a mighty magnet for talent and ambition for the rest of the world. We must keep the talent we train and encourage our designers and engineers to make products in America, which we can do easily with the miracles of technology. Apple surely knew what it was doing when it decided to manufacture some of its Macs here. If that’s not exactly a startup, at least it’s a start. Let’s hope it starts a trend.
Suzanne Fields is a syndicated columnist.
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