When offshoring backfires As the global economic downturn grinds on, more companies are acknowledging that labour costs aren’t always the most important factor when deciding where to build their next factory. This column argues that, in times of recession, some companies find that bringing their business home can give them a competitive edge. While politicians argue strategies to create jobs in the faltering global economy, the debate around offshoring has intensified. Once considered a clear competitive advantage in the fast-changing global market, manufacturers rushed to replace domestic labour forces with lower-cost workers in emerging markets. By 2002–03, about a quarter to half of the manufacturing companies in Western Europe were involved in offshore production (Dachs et al 2006). Recently, though, many of the perceived offshoring advantages have been called into question. So it should not come as a surprise that more US manufacturers are ‘reshoring’, ’onshoring’ and ‘backshoring’.
America’s Three Deficits - Laura Tyson Exit from comment view mode. Click to hide this space BERKELEY – This year began with a series of reports providing tantalizing evidence that economic recovery in the United States is strengthening. The pace of job creation has increased, indicators for manufacturing and services have improved, and consumption spending has been stronger than anticipated. Output growth in the US remains anemic, and the economy continues to face three significant deficits: a jobs deficit, an investment deficit, and a long-run fiscal deficit, none of which is likely to be addressed in an election year. Although output is now higher than it was in the fourth quarter of 2007, it remains far below what could be produced if labor and capacity were fully utilized. The output gap reflects a deficit of more than 12 million jobs – the number of jobs needed to return to the economy’s peak 2007 employment level and absorb the 125,000 people who enter the labor force each month.
These May Be The Droids Farmers Are Looking For | Epicenter When it comes to farm robots, fruit gets all the attention. But it looks like trees and shrubs could win the prize for first significant agricultural market for small mobile robots. Massachusetts startup Harvest Automation is beta testing a small mobile robot that it’s pitching to nurseries as the solution to their most pressing problem: a volatile labor market. The multi-billion-dollar industry that supplies ornamental plants to building contractors, big-box retailers and landscaping firms — $11.7 billion according to the most recent USDA figures — has been eagerly awaiting automation for decades. The down economy and harsh state laws targeting undocumented workers have turned up the pressure. The horticulture industry has caught the attention of several robotics industry veterans, including Joe Jones, a co-inventor of iRobot’s Roomba vacuum cleaning robot. In today’s human-tended nurseries, immature potted trees and shrubs arrive at nurseries by truck and are offloaded onto the ground.
Peter Victor | Capital Institute Peter Victor–eminent ecological economist, winner of the Canadian Council for the Arts' prestigious Molson Award, and author of Managing Without Growth–challenges us to reframe our economic discussions to focus on managing material and energy flows rather than GDP growth. What Drives Peter Victor? Is there a model for the economy that will allow us to achieve full employment, maintain fiscal balance, eradicate poverty, and live within the biosphere’s limits? The World According to Peter Victor When you propose the sorts of changes I do you are put on the defensive. An economy that is not pursuing growth can still be dynamic. Peter Victor’s Storyline Peter Victor confesses that his interest in economics, which he discovered at the tender age of 15, was informed from the outset by a habit of mind prone to question the accepted wisdom. Of course one of the biggest ignored topics in the world of mainstream economics was the notion of externalities, and Peter immediately seized on it.
Why America spends while the world saves Editor's Note: The following is an edited transcript of my interview with Sheldon Garon, a professor of history and East Asian studies at Princeton University and author of the new book, Beyond Our Means: Why America Spends While the World Saves. Why Americans don't save Amar C. Bakshi: U.S. household saving rates peaked in the 1980s at around 11 percent, and by 2005, they had plummeted to near zero. How did America go from a nation of savers to a nation of consumers? Sheldon Garon: Well, in fact, before World War II we weren’t a nation of great savers. But then in the two World Wars, and particularly in World War II, the federal government intervened to encourage ordinary people to save in ways the Europeans and Japanese were doing at the time. The U.S. government undertook two innovations. And the other way was the Federal Deposit Insurance Corporation, introduced in 1934, which guaranteed the deposits of small savers in most American banks. Amar C. The composition of U.S. household debt
Technological unemployment: Race against the machine FEAR of displacement from one's job by a superefficient machine is as old as modern economic growth (which is to say, about two centuries old). It is somewhat surprising that there has not been more made of the possibility of technological unemployment during the recent recession and lacklustre recovery. Technological unemployment was widely cited as a problem in the 1920s and 1930s, a time during which productivity was soaring, inequality and unemployment were high, and instability was the norm. The argument that rapid technological change may be generating labour market problems is given a lift in an interesting new ebook by Erik Brynjolfsson and Andrew McAfee, entitled Race against the machine. The stylised facts of that poor performance are increasingly well known. I think the most important part of their argument is in their nice explanation of the nature of change in information and communication technologies (ICT). But what else can be done?
Living with the folks - Nov. 4 NEW YORK (CNNMoney) -- With job openings scarce, getting adult children to leave the nest is becoming a lot more difficult. The number of adult children who live with their parents, especially young males, has soared since the economy started heading south. Among males age 25 to 34, 19% live with their parents today, a 5 percentage point increase from 2005, according to Census data released Thursday. Among the college-aged set, the 18- to 24-year-olds, 59% of males and 50% of females lived with their parents, up from 53% and 46%, respectively. The fact that so many young people are unable or unwilling to flee the nest "cuts into the formation of new households quite a lot," said Mark Zandi, chief economist for Moody's Analytics. Zandi calculated that there are about 150,000 fewer households being formed per year than the 1.2 million that would be in a normal, well-functioning economy. But even if all of those young adults rented it still would have an impact on home sales.
Manufacturing Illusions) Suddenly, manufacturing is back – at least on the election trail. But don’t be fooled. The real issue isn’t how to get manufacturing back. Republicans have become born-again champions of American manufacturing. Mitt Romney says he’ll “work to bring manufacturing back” to America by being tough on China, which he describes as “stealing jobs” by keeping value of its currency artificially low and thereby making its exports cheaper. Rick Santorum promises to “fight for American manufacturing” by eliminating corporate income taxes on manufacturers and allowing corporations to bring their foreign profits back to American tax free as long as they use the money to build new factories. President Obama has also been pushing a manufacturing agenda. Meanwhile, American consumers’ pent-up demand for appliances, cars, and trucks have created a small boomlet in American manufacturing – setting off a wave of hope, mixed with nostalgic patriotism, that American manufacturing could be coming back.
Anti-Star Trek: A Theory of Posterity :: Peter Frase In the process of trying to pull together some thoughts on intellectual property, zero marginal-cost goods, immaterial labor, and the incipient transition to a rentier form of capitalism, I’ve been working out a thought experiment: a possible future society I call anti-Star Trek. Consider this a stab at a theory of posterity. One of the intriguing things about the world of Star Trek, as Gene Roddenberry presented it in The Next Generation and subsequent series, is that it appears to be, in essence, a communist society. There is no money, everyone has access to whatever resources they need, and no-one is required to work. The technical condition of possibility for this society is comprised of of two basic components. Anti-Star Trek takes these same technological premises: replicators, free energy, and a post-scarcity economy. Given the material abundance made possible by the replicator, how would it be possible to maintain a system based on money, profit, and class power?
More than half of Florida homeowners in default are 2 years overdue More than half of Florida homeowners in foreclosure have not made a mortgage payment in two years or more. That's higher than the national average and one indication of why banks are paying borrowers up to $20,000 to execute a short sale. A new report from Jacksonville-based LPS Applied Analytics found that as of September, 56 percent of Florida's mortgages in foreclosure are 24 months or more behind in payments, compared with 39 percent nationwide. About 84 percent of Florida foreclosures are more than 18 months in arrears. Considering recent figures that estimate the time from initial filing to auction at 676 days in Florida, LPS Senior Vice President Herb Blecher said, he's not shocked by the mounting late payments. In January 2010, just 19 percent of Florida's foreclosures were 24 months or more delinquent. Blecher said the longer delinquency rates are more evidence of a foreclosure bottleneck that could hinder a housing recovery. Wells Fargo and J.P.
The Spectacular Rise and Fall of U.S. Whaling: An Innovation Story - Derek Thompson - Business An extinct business offers surprisingly current lessons about the triumph of technology, the future of work, and the inevitable decline of industries that might not be worth saving "Some years ago -- never mind how long precisely -- having little or no money in my purse, and nothing particular to interest me on shore, I thought I would sail about a little and see the watery part of the world." -- Moby Dick One hundred and fifty years ago, around the time Herman Melville was completing Moby Dick, whaling was a booming worldwide business and the United States was the global behemoth. In 1846, we owned 640 whaling ships, more than the rest of the world put together and tripled. At its height, the whaling industry contributed $10 million (in 1880 dollars) to GDP, enough to make it the fifth largest sector of the economy. Fifty years later, the industry was dead. Fat had never made a city so flush. Fourth, whale captains were innovators in employee compensation.
Four Futures In his speech to the Occupy Wall Street encampment at Zuccotti Park, Slavoj Žižek lamented that “It’s easy to imagine the end of the world, but we cannot imagine the end of capitalism.” It’s a paraphrase of a remark that Fredric Jameson made some years ago, when the hegemony of neoliberalism still appeared absolute. Yet the very existence of Occupy Wall Street suggests that the end of capitalism has become a bit easier to imagine of late. At first, this imagining took a mostly grim and dystopian form: at the height of the financial crisis, with the global economy seemingly in full collapse, the end of capitalism looked like it might be the beginning of a period of anarchic violence and misery. And still it might, with the Eurozone teetering on the edge of collapse as I write. One thing we can be certain of is that capitalism will end. Much of the literature on post-capitalist economies is preoccupied with the problem of managing labor in the absence of capitalist bosses.