Manufacturing Will Return to The United States with a Vengeance!
Yes, Manufacturing Will return to U.S. starting now and it's growth will accelerate over the next ten years! Does this sound too good to be true? It's not!
I was in a fast food restaurant this morning meeting with a client. It is the perfect meeting venue. It is so noisy that no one can eaves drop. They don't care how long you stay or what you order. The facilities are normally clean and have a nice bathroom. CNN is on a big screen TV. I love it. My new office.
I pointed out to my client that this restaurant also provides a perfect example of shifting demography. "Oh," he said, "Where?" "There, behind the counter" I said. There she was, a blond, blue eyed, English speaking teen girl. Fast food has not seen this demo in twenty years, now she was returning with a vengeance. Why? Generation Y. Generation Y (over 90 million native kids 23 and under) are overwhelming the entry level labor market. They are displacing the immigrants and this will naturally reverse all of our so called immigration issues. (Maybe we can sell the billion dollar wall we just built to Mexico to keep the unemployed Latinos from returning.) This home grown labor force will be the biggest and best one the United States has ever had. We chased manufacturing out of the U.S. during the last twenty years because of the anemic high cost labor force provided by Generation X (69 million people born 1965 to 1984). China was only too happy to to accommodate us by sucking all of our manufacturing off shore.
Now China has its own issues precipitated by their ludicrous "One Child Policy" that has been in force for the last three decades. The net result is an elimination of their young labor force. Duh! China is now experiencing labor shortages, yes, labor shortages! This does mean higher wages. Couple this with expensive shipping, a falling dollar and run-a-way inflation and you have Chinese goods that have lost their appeal to Wal-Mart. Wal-Mart does more business with China than Germany does.
Yes, manufacturing will come back to the United States for all the right reasons. We will satisfy our own markets with our own labor and if the dollar stays low we will satisfy world markets as well.
Are you ready?
Labels: China , Generation Y, Manufacturing, U.S. Labor
Kenneth W. Gronbach
6 Comments
2 References
References (2)
-
Response: affiliate marketing mlm networkAny decent lead provider should give you the option to use a variety of filters that enable you to buy leads where the prospective customer information will fit with even the most stringent lending criteria. In addition, there should be filters to allow you to target your customers by area. This ... -
Response: Learn PPC...
Reader Comments (6)
Right on the money as usual. A post consumer age? Makes no sense, as Gen Y ages where are they going to live? What are they going to drive?
Birth Rate drives the Population. Size of the population drives, Market Demand. Pretty basic economics.
You should know that the Chinese never got to fully occupy their labor force and unemployment is rampant nowadays, check this article, Where will all the students go? Apr 8th 2009 from The Economist It starts by telling that this year, 6 millions new college students are graduating and job searching and facing severe conditions because USA no longer buys as much, and this situation should stay for another decade. (This is what post-consumer mean for who asked what it meant) This will push salaries down in the long term in China and now that the Y‘s are reaching their working age I can see a global plunge of salaries out of Darwinian or crazy competition. It’s going to get nasty with so many youth in China and here competing for jobs. Overpopulation is still a problem. Now imagine another 400 millions people China would‘ve had without birth controls! They have already flooded the whole world with so much junk and pollution, imagine with another 400 millions had they not stop their birth rates.
Industry should surely come back, but not with a revenge necessarily. The Hispanics are still going to be around since life in their nations is far worse than here and they kept having plenty of babies in the past decades, not as much as usual, but still quite a bit; ask me about it, I am Hispanic and know those people firsthand. Again, overpopulation still exits and it is a problem.
First of all, there's no "birth dearth" in China. Just because there's a 'one child policy" in China doesn't mean everybody has one child-- it was something introduced to stabilize population as much as possible, but it largely doesn't apply to most of the rural population, and has less application in the west of the country and to countless subgroups.
When you tally up the numbers, in fact (and take into account underestimates, as professional demographers have)-- China's fertility rate is about 2.2, i.e. close to replacement. They're not going to be losing their manufacturing edge.
Your cardinal sin, though, is that you pay so much attention to quantity, as many demographers do, while ignoring the quality issue-- quality in terms of education, infrastructure and other issues. You can't just pull out a lame Econ 101 calculation, claim that "more people = more demand" and assume this leads to a better economy. In fact, under many circumstances a growing population can be a disaster for an economy.
A higher population is a gain only if that population is educated, and has sufficient infrastructure to sustain its needs. Without these things, a higher population competes over a shrinking pool of resources, leading to tensions, higher pollution, poorer health and therefore an ultimate net decrease in economic potential.
This is why. e.g., African countries (with by far the world's highest population growth) also have the worst economic performance, and GDP per capita is abysmal-- they don't have the resources to fully sustain that population, provide health and education, and so instead, they get tension and conflict, which destabilizes the country and pushes down GDP and employment. Africa has great potential, but it can realize it only with a sustainable population that it can then harness.
India, though it's a place I love to go to overall and has had reasonable growth lately, is hampered by the lack of infrastructure and education in their big cities. So long as India's growth outstrips the support networks, economic growth ill also be hampered.
This is what's hitting the USA as well. We don't have the educational resources or the medical system to support a rapidly-growing population like this, and we're no longer self-sufficient-- we have to import our oil and natural resources, which results in our transferring our wealth overseas. IOW, our own net population growth is proving to be a drain b/c it's outstripping our resources. Too many demographers, like yourself I'm afraid, fail to grasp this basic facet of economics.