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Labor costs are lower in much of Asia, but it's not that simple. Shipping costs, risks to IP, loss of flexibility and accessibility to the manufacturing operat
by kingkongreveng_ 17y ago
Labor costs are lower in much of Asia, but it's not that simple. Shipping costs, risks to IP, loss of flexibility and accessibility to the manufacturing operation all factor into the picture. There are plenty of examples of manufacturing operations returning to the US for these reasons. Germany is a higher cost labor market than the US yet you don't see much of this simplistic scenario where physical operations inevitably flee high wages.
The big issue driving away these operations on net is the regulatory nightmare of employing Americans and running a plant. You have OSHA, the EPA, and an ever growing body of employer mandates to contend with. Also, the US is now a high tax country from a business perspective.
- hristov 17y agoGermany has their own versions of the EPA and OSHA and they are much more powerful than the US ones.
- eande 17y agowhich is tax money and they tax the society enormously , e.g. sales tax alone 19%. DARPA called in the past for some great technical innovations, but this one bringing manufacturing back to US is questionable. Not that I don’t like to see it, but it is an open worldwide market and may the best business model win. I see this initiate more a reaction from the government, because they are scared loosing the access to the companies who run the semi fab process.