Wednesday, May 14, 2014

Jobs Returning to America

Article: Starting around 3 decades ago, tons of American companies starting shifting production to China and other low-wage countries. (Kids: what does production mean? Guess reasons why it shifted to China?)
For instance, Generac Power Systems moved to China in 2001, wiping out 400 jobs in Wisconsin. They did this because Chinese companies were offering to make the company's product for $100 less per unit than the cost of making it in America.

However, Generac is now moving back to America, creating about 80 jobs, as are many companies. (Kids: guess reasons why they may be moving back to America)

Reasons for this include (1) Chinese labor and transportation costs have increased while U.S. equivalents have not; (2) manufacturing is being done more and more by computers, therefore decreasing labor costs; (3) gas prices have gone up in China but lowered in the U.S., due to new U.S. drilling techniques, which have lowered gas prices in the U.S.; (4) many U.S. consumers complain about the quality of goods made in China -- almost everything needs to be reinspected in America if it comes from China because of quality concerns: (5) the rise in online shopping has increased the need for U.S.-based supply plants.

In sum: prices of things from China are going up, quality is dropping, and deliveries are delayed. So companies are returning back to America. Kids: which is of these reasons do you think is the most important and why?
   
        

No comments:

Post a Comment