Wednesday, October 14, 2015

Manufacturing In The United States & Canada

Manufacturing jobs in both the United States and Canada only account for 10% of jobs and it continues to fall.  Like in the United States, in the decade to 2012 about 20,000 factories closed in Canada.  Like in the United States and as a result of Free Trade, these jobs are never coming back.  They are now in Mexico, China and other Countries.   The fact is that no company is going to pay $30 or $40 an hour, or more fully loaded, for someone, with little education, or marketable jobs skills, to screw in a bolt when that labor can be purchased in many countries for $5 - $10 an hour.  As such, there is no doubt that people working in manufacturing in the United States and Canada have been hurt both by Free Trade and Robotics.

Tesla is building cars in California, in an old plant that used be owned by Toyota and GM, in the only car plant left in the state, primarily using Robotics.  In addition, Tesla has been given major tax incentives to keep jobs in the United States; otherwise you can bet Tesla might be making these cars and batteries that will be produced in Nevada, in Mexico or overseas.
Countries like the United States and Canada have been killing manufacturing jobs for decades as a result of Union demands for unrealistic compensation and benefits, employment practice litigation, environmental regulations that make manufacturing in the US and Canada difficult and because of the high cost of energy.   In addition, both Canada and particularly the United States have higher corporate income tax rates than most other countries around the world.

So, let's get this straight.  An American, or Canadian company can move manufacturing to China to get substantially lower labor costs, fewer environmental regulations, lower energy costs and lower corporate income taxes.   Is it any wonder that today only 10% of the jobs in the United States and Canada are in manufacturing.  If we want manufacturing jobs in the US and Canada, all of these issues must be addressed.  Otherwise, forget about it.  As an example, several years ago, a major pharmaceutical company built a $2 billion factory in California.  It never opened.  The factory and the jobs were moved to Singapore even though the company had to take a total write off.  It was more advantageous to write off this entire investment than to produce their products in the US.

Why do you think we have 50 million Americans on Food Stamps and Welfare along with 13 million Americans collecting Disability Benefits. These are primarily Americans with little education, or marketable job skills.  Many of these people would have been employed in manufacturing jobs screwing in a bolt 30 years ago; but no more.  Those jobs are gone; so now what??

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