Friday, March 11, 2011

Can China compete with American manufacturing? Yes, you read that right...

Is US manufacturing in decline?  Are manufacturing jobs in decline? If you answered "yes" to both of these questions, you would be wrong...Click on the link to read the whole article. Below I excerpted the part that I channel to students and adults (who can be objective enough to listen, few and far between) in and out of class.  The underlined sections tend to be the roadblock in understanding the issue.

Can China compete with American manufacturing?
So why do so many Americans think the U.S. doesn't make anything anymore? Part of the reason is that we're deceived by what we see everyday. Shopping through your local Target, you're going to see a lot of “Made in China” labels on things like clothing or electronics. The U.S. tends to make stuff that requires more technology and engineering know-how, like planes, semiconductors and machinery. Basic economics tells us that is exactly how things should be. Since China has so many, low-wage laborers, there is no way high-wage America can possibly compete in products that require teams of workers to manufacture, like toys, apparel, consumer electronics, and a lot of other stuff you'll find on Wal-Mart shelves. Making such products in the U.S. would simply be too expensive; companies that did so would not be able to compete with cheaper imports made in lower-cost economies. But the U.S. still is very competitive in the types of products that demand a high level of technology, engineering and capital to produce. In such industries, wages don't matter quite as much, and the U.S. can capitalize on its clear advantage over emerging markets like China in expertise, technology and innovation. That's why the U.S. sells Boeing aircraft to China, and the Chinese sell blue jeans to Americans. (Read the rest HERE)
Need further evidence:

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