Over time, China also developed mid/high level skills, complemented their low-skill production offering with it and now competes in new industries, new tech, etc.
So...to compete with China, the country with 4x the US-population, the solution is that low-skill labor needs to return to US....?
Shouldn't instead the focus be to again foster mid/high-skill labor, moving the part that is offshored again towards low-skill labor...?
It's not impossible to build back, but it would require long term stable policies to favor it at more levels than just tariffs.
(tariffs do nothing to address labor shortages in healthcare, teaching, and other domestic service based sectors, for example)
But the conversation here has he orthogonal goal of being competitive with China as well. I can assure you just paying everyone living wages is one of the main reasons why we are not competitive with China. It’s the main reason why China is beating us today.
So paying everyone living wages doesn’t really do anything to solve the problem because the products created by people who are paid living wages are by definition more expensive due to labor costs.
What tariffs do is they allow us to pay people living wages and sell expensive products and still be competitive because products from China are tariffed to be the same price.
Trying to “Bring Back” Manufacturing Jobs Is a Fool’s Errand - https://www.cato.org/blog/trying-bring-back-manufacturing-jo... - April 21st, 2025
No, just no.
There is a high variance in job qualities beyond pay.
Work hours, over time, outside vs. office jobs, repetitive Vs. varied, physical and psychological impact, etc.
The important part is having a job, that you enjoy, and that allows you to live comfortably while saving for the future. It can be in IT, sales, management, maintenance, whatever - but some people will rather leave a more tangible, visceral, and physical difference in their work at the end of the day, and their preference does not make it a worse job.
One of the foundations of conservatism is the priority of hierarchy over effectiveness. In a conservative culture it doesn't matter how well things work as long as the right people in charge.
We're seeing the limit of this now, where it's literally more important to maintain hierarchy by denying facts and rationality than to "lose face" by admitting that power isn't absolute.
You can't run a modern country like this. You can't plan for the future, make effective decisions, govern, have a working legal system, build housing, create health care - anything at all - when all decisions are made according to the whims of a despot.
Power and resources - including wealth - have to be distributed. Or at least there has to be the illusion they're somewhat distributed. Anything else guarantees terminal contraction and decay.
Instead, the offshore-destinations kept offering more and more services in the value-chain, until the entire skillset to actually create the low-skill labor processes to offshore was replaced with "let the offshore company manage".
See a list of leading US companies that are off of being king of the hill - Boeing, GE, Intel, ... leading industrial US companies continually divested from manufacturing, or shorted long term investment, not because it wasn't profitable, but because it wasn't profitable enough in the moment. It took decades, and many dividends and stock growth was taken in the middle, but the shortfall manifests in time.
Uber still hasn't managed to make a net profit over its lifetime as a company, by the way.
>Many US business elected to chase short term growth, and short term and higher margins and minimize long term investments.
I would like to add that this was due to the influence of Milton Friedman. He put the emphasis on shareholder returns being the most important, without considering the survival of the company itself.
We don’t want the Chinese making high value goods at slightly lower prices. We want Americans making high value goods and we want to push cheap stuff as cheap as possible. Next step is enforcing environmental rules on Chinese goods and requiring escrow of the funds to pay the Chinese in American accounts until the goods are inspected and pass.
Not disagree with your main points, but labor inputs are still very much a huge part of product costs, and often the biggest driver of where to build a new factory when a company is scaling up. Companies aim to build their new factories wherever there's a sufficient pool of cheap labor with the necessary skills.
Of course, even where labor cost is truly inconsequential, you would still do that as all the correlations that come alongside cheap labor are still very attractive to manufacturing.
IMHO it still is. There are tasks, especially in assembly, that for now require humans to do because robots can't match our dexterity. Stuff like mounting through-hole components like a cable from the battery compartment to the main PCB. That's a few seconds worth of time, and you need barely more than a few days worth of training to get a worker up to speed - a low-skill job. China, Thailand, Vietnam and a bunch of other places have an ample supply of people coming out of utter poverty, which means the pressure on wages is massive - a Chinese worker on average earns about 13200 dollars a year [1], an American worker is 3x-4x that amount and more if the shop is unionized. And on top of that, Chinese workers work 996, American or European workers have much MUCH more employee rights.
The problem is, low-skill employment opportunities are going down and down because automation gets better. For now, China can compete because Chinese workers are cheaper than machines... but once that changes, it's going to get nasty.
> The labor wages themselves are a factor, but an increasingly minor factor in product costs.
There's soft factors as well. Stuff like workplace safety/OSHA regulations, environmental regulations... Silicon Valley is a bunch of Superfund sites from decades of toxic emissions. China? They barely have regulations in place, and other sweatshop countries are even worse.
The core problem we're talking about anyway is that a certain percentage of any population is just, plain and simple, dumb as rocks. Over half the US population is barely literate [2]. No matter how good your education systems are, no matter how much money you invest into equality in schools, no matter how much you protect them from stuff like lead - they are dumb, will remain dumb, and probably their children will also remain dumb. In ye olde times you put them on farms, meatpacking or in factories so they had gainful employment... but that all went away, and now we got hordes of utterly dumb people with no hope of ever getting smart and, crucially, no hope of ever getting a meaningful job.
[1] https://www.statista.com/statistics/743509/china-average-yea...
[2] https://www.thenationalliteracyinstitute.com/post/literacy-s...
Assuming there is no embargo by then.
The obvious answer is this:
1. it doesn't matter if our t-shirts are made in Bangladesh.
2. it does matter if our stuff is made in an enemy nation (china).
3. U.S. labor is too expensive to move back to mass manufacturing the way we used to do it, c.f. baumol's cost disease.
4. offshoring and illegal labor have suppressed investment in automation and manufacturing technology for decades, which will be painful to undo.
The sensible outcome of these facts is
1. Focus on moving everything out of china to other cheap countries with reasonable levels of human capital.
2. Focus on re-shoring critical industries.
3. Launch moonshot investments into robotics and automation. Bringing back a big chunk of manufacturing is sustainable; bringing back jobs is not.
4. Invest in large-scale roll-out of SMR energy so we have reliable power for this new industrial build.
I do disagree somewhat with point 4. I think this is frequently overstated:
Building and operating automated factories is just as wage-dependent as anything else (just the coefficients are a bit smaller). You still need engineers, construction crews, supervisors, repair crews, etc. (and those could all be doing something more profitable as well).
You can see this very clearly in the EU, where there is a pretty smooth wage-gradient, and even the super highly automated automotive manufacturing has moved down that gradient towards Slovenia, Slovakia, Hungary, despite language/culture barriers.
> Bringing back a big chunk of manufacturing is sustainable; bringing back jobs is not.
I think a decent sized manufacturing industry is a realistic goal long term. But longer term US global supremacy in it is not even a realistic goal to begin with, because not only are you gonna fight against the wage gradient now, you are also gonna face the fact that the US is only ~5% global population, and manufacturing will naturally drift towards the very biggest markets for its goods, which the US probably won't be in half a century or so, simply because of demographics and economical growth in China/India generally.
Absent sufficient jobs, or some other arrangement for the masses that provides both material comfort and some sense of purpose, you'll never get to the automation because you will likely have a revolution first.
Though after this administration I'm not sure we'll have any allies left.
