Friday, September 20, 2013

Textile manufacturing returns to the US! Good for workers, right? The "Rise of the Machine" begs to differ...

This graphic is included in a NYTIMES article on the nascent revival of textile manufacturing in the US, an industry decimated in the 1990's from factories moving to low wage countries.

The article is mostly about the increase in manufacturing facilities BUT not so much the increase in manufacturing JOBS.  Technology and automation are the culprits in the movement back to the US from the likes of Mexico and China.

The largest cost differential you see below is relative wages paid to Asian based workers and US workers.

However, the difference is tempered when you replace Capital (machines) for Labor in the US.
"Where Mr. Winthrop relies on labor — the cutting and sewing of the sweatshirts, which he does in five factories in California and North Carolina — is where the costs jump up. That costs his company around $17 for a given sweatshirt; overseas, he says, it would cost $5.50. 
But truth be told, labor is not a big ingredient in the manufacturing uptick in the United States, textiles or otherwise. Indeed, the absence of high-paid American workers in the new factories has made the revival possible. 
“Most of our costs are power-related,” said Dan Nation, a senior Parkdale executive."


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