Will Manufacturing Jobs Shipped Overseas due to cheap labor come back to United States due to the current Financial Crisis?
Before you go ahead and read this, I would just like to mention that these are more of a personal rambling. As most of you have who have been following the news (or live on Planet Earth), you know that the recent financial crisis has shaken the confidence of people not just in United States, but also all over the world as well. I was reading WSJ and I think it was ABC news last night how workers in China were protesting factory closures. Apparently, a large number of Chinese Factories are being closed there due to scale back of spending by American Consumers.
Now, what affect does this have in bringing Manufacturing Jobs back to United States? Here is what has got me thinking : The primary reason manufacturers move overseas is purely cost measure or cost savings. Companies don't move out to China or Phillipines in manufacturing sector (or even in some technology sector) to tap intellectual prowess there, but rather they are merely interested in one commodity - Cheap Labor. Cheap Labor drove manufacturing companies overseas not search for innovation. If all the doomsday scenarios that the "experts" could possibly happen come true in someway then it would mean that the American dominance in the financial sphere, or for the matter in most spheres would be readjusted.
One could also assume that one of the readjustments of world order could also be reduction in value of dollar. Now, what would less dollar value mean to us? A low dollar value, along with a rising Yuan (Chinese currency) could make any manufacturing overseas commercially UNFEASIBLE, i.e. the companies would see no reason to have their factories up and running in china to export it to US. They would just bring them back here, as it would be more profitable!
Now, the fall of the dollar would also mean that "cost of living" in United State would drive up, and it doesn't necessarily mean the standard of living has to go down. A low dollar value, along with a high foreign currencies would mean, Americans would cutback on spending on foreign goods, and instead would opt for locally made products. Also, the export ratio would considerably increase as well due to the low dollar value which would make American products more attractive world wide.
All of this I think would mean that manufacturing jobs that have shipped elsewhere due to cheap labor, will now see a possible comeback due to the current financial crisis.
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