If US corporations moved manufacturing back to the US...

Something else to consider is existing infrastructure. Nike doesn't build a new factory every time a new shoe line is introduced. Usually these factories are simply subcontractors to the major brands. Adidas, Asics and Nike shoes are usually produced at the same factory by the same workers.

These are gigantic factories and are very capital-intensive to build, retool, and maintain. What is the incentive for a company like Nike (or a subcontractor) to spend tens of millions of dollars to build such a factory in the US when the factories already exist in China and Vietnam?

I agree. That's why there is a place for governments to protect human rights, maintain health regulations, and allow for sustainable growth that does not encourage environmental degradation. The problem is that countries often feel that they are in competition with each other for jobs (because each sees themselves as entitled to jobs out of a sense of superiority and nationalism). Thus, each country will try to undercut each other, either through deregulation, or by lowering taxes, which in turn disables their ability to enforce its regulations.

From a game theorists perspective, this is just a coordination problem. Everyone wants to have a healthy work environment for their workers, but they need jobs to have workers in the first place. If everyone had the same set of rule and the same set of taxes, we would all be better off. Yet, it is impossible to have 296 different countries agree on the same set of rules. If there was a single body that could set them, then everything would be alright.

At what point to the tables turn? At what point could a successful Asian company tell a governor of a state, "We're willing to build HUGE auto manufacturing plant in your state. We'll employ 10,000 people...BUT we want exemption from X number of regulations that hinder our business in the USA."

When we be willing to give up X in order to even have jobs?

Once the U.S is completely bankrupted and in decline, we will do anything at any price under a single world currency to create jobs for our 305 million people manufacturing products to sell to a market of 3 billion members of the emerging middle class in China and India. Roles will reverse, and we will be the indentured servants dependent on the consumption of the East. Sounds like a crazy fvcking conspiracy theory, don't it?

Aquafina wrote:

At what point to the tables turn? At what point could a successful Asian company tell a governor of a state, "We're willing to build HUGE auto manufacturing plant in your state. We'll employ 10,000 people...BUT we want exemption from X number of regulations that hinder our business in the USA."

When we be willing to give up X in order to even have jobs?

I don't understand your question. They already do that. Southern states give tax exemptions to auto manufacturers all the time. They even sometimes give out tax credits, which are essentially subsidies because they can sell them on the open market. Asian auto companies have to build cars in the US (because shipping costs are high), but each state wants to jobs so they give out sweetheart deals.

I can't answer this question, but I saw some statistics on labor costs (corporate statistics) for apparel in developing countries. One example was a labor cost of 3 cents for a $14.99 item. Another was maybe 10 cents for a $179 item. In other words, there is a huge, huge margin available without raising prices at all. Oh, but that would eat into corporate profits a bit. And so if you had a strong, unionized labor force, the workers would get a higher proportion of the value they create for corporations, and the products would not need to be any more expensive, in many cases.

What does this have to do with shoes and gear? Just saying...

the multiplier would be H U G E. Just imagine, those people work Nike, those employees buy groceries, someone delivers groceries, someone works at the store, the Nike employees need hair cuts, they need their cars repaired, they buys houses, someone sells them the house... it's just a shame we've price ourselves out of the market.

It would be huge for those Nike workers, but if everyone in America was paying 14% extra for their shoes, jeans, etc., they would be able to buy far less products overall. So your advantage for paying Americans far more than the labor is worth is counter productive in the end.

You know, usually I think you have no sense in that head of yours, but this is a very well-written post. Very good points. You might be okay after all.

Some years back I read a series of articles which stated that the fastest growing job sector in the USA would be service jobs.

Americans are having problems coming to terms with this factor.

Many of our youth go to college, pay for higher education and come out to what?

Jobs that don't require college degrees.

We're facing an expectation and education bubble.

Our answer is to blame wall street and corporations. Not saying that the big companies couldn't do more in the way of job creation in the USA especially IMHO if they want or deserve tax breaks but in the end they'll seek profits and margins.

In the meantime our near future lies with more people starting small businesses and working in service jobs. Yes, there will be the professional sector ( doctor's, lawyers etc) but less of the " middle class " jobs.

The next generation may be looking hard at whether they need to pay 6 figures for their kids education unless there is some chance of work that justifies that expense.

I know Boeing went through a terrible debacle when they shipped parts overseas for their 787 Dreamliner. Parts that were shipped back to Seattle were misaligned and the result was a 2 year delay for the first flight. It is only now the Dreamliner will be reaching its first customer, and it is over 3 years late!

GE and Rolls Royce were one of the few supplies to be on time, while maintaining high-level of quality. That is what you would expect from the world's two leaders in jet engine manufacturing. Boeing's replacement for the venerable 737 will outsource far less of it airframe than did the 787, illustrating Boeing learned a valuable and hard lesson about too much outsourcing.

TCB wrote:

I don't understand your question. They already do that. Southern states give tax exemptions to auto manufacturers all the time. They even sometimes give out tax credits, which are essentially subsidies because they can sell them on the open market. Asian auto companies have to build cars in the US (because shipping costs are high), but each state wants to jobs so they give out sweetheart deals.

Beyond tax exemptions Will we ever be so desperate that we are willing to roll back some labor laws just to have jobs.

Not one GM or Ford subcompact is engineered and designed in the US. With the exception of the Corvette, trucks, and a few Cadillac, the US is essentially out of the car business.

seeking informed opinions wrote:

How much more would a product like Nike shoes or an iPod cost if the factory were moved back to the USA, US wages were paid, US environmental regs adhered to, etc? Any idea? Would it be 2x current prices? Have any corporations done this? Unless the cost increase were huge, it seems like it would be great PR with our current unemployment rate.

Doesn't NB still produce some shoes in the US?

I think it can be done on some scale. I believe the US missed out on properly migrating it's labor to cheaper parts of the US vs. Asia. For example, shoes and textiles generally went from the Northeast to overseas, because they could, but if these jobs had gone to southern areas they might still be here, of course the incentive to move overseas was far greater.

Aquafina wrote:

Beyond tax exemptions Will we ever be so desperate that we are willing to roll back some labor laws just to have jobs.

That is almost the entirety of the Tea Party's political platform. Have you watched any of the Republican debates?

Yes, this and Americans would have to understand that having a low (no?) skill job on an assembly line does not mean you deserve a rate of pay that lets you have a couple new cars, and luxury items.

Everyone should be comfortable but we expect excess for nothing.

Interesting discussion in this morning's New York Times about unemployed Americans and low paying agricultural jobs.

http://www.nytimes.com/roomfordebate/2011/10/09/what-happened-to-the-american-work-ethic-2?nl=todaysheadlines&emc=thab1