It’s been something that has been talked about frequently in recent political debates and by normal Americans for years since outsourcing became the norm: “Bring the manufacturing jobs back home!” “Buy American-made only!” But is this actually a possibility, and would it actually help either importers or the average American?
While many believe that there are only economic positives to be gained from “insourcing” and purchasing in America, there are also considerable downsides as well.
- Product quality concerns would lessen as US-based companies are generally more reliable and as quality expectations are much higher in USA.
- Communication with your suppliers would be much easier. No more cultural conflicts, no more time zone issues.
- Economically, new jobs created could have a decent impact on the jobless rate.
- Prices. Sourcing from the USA generally can cost at least 50% more than Asia. The effects of higher pricing would also be seen by the end consumer who would pay much steeper prices for just about everything. Before you vouch for “Buy USA made”, you must consider whether you would be willing to pay twice as much for that pair of socks you are wearing or iPhone you are playing with.
- Less capacity, less capabilities. Bringing manufacturing back to the USA requires a steep learning curve to catch up to the decades of Asian manufacturing dominance.
- Outsourcing lessens the environmental burdens in the West while severely worsening conditions in Asia. Bringing manufacturing back requires increased dependence on energy (some imported), and ultimately more pollution.
So in what direction will the USA, and perhaps other Western nations, move? It seems clear that at least as a PR move, many companies are placing more work back home to appease it’s customer base. However, in the end, money talks and China will likely always be able to beat the pricing of the West. Manufacturing will continue to expand into Western China and Southeast Asia, defraying the rising costs of coastal China. In the meantime, at the very least this serves as interesting fodder for political debate, and brings to the fore some realities of outsourcing from Asia.