Sunday, August 26, 2007

Why Outsourcing Manufacturing Must Stop

Article here.

Corporations have been living in a fantasy world where they can ship jobs overseas but still sell products at home at a good profit. It's brilliant until the effects of that kind of thinking work their way through the system and the people who you need to buy your stuff no longer have the money.

(...)

We haven't seen the worst of the China problem yet. Once western countries have lost their production capacity -- and we're nearly there -- the next step will be for China to raise the prices of its goods. We will be reduced to economic colonies that supply raw materials and buy consumer goods, but don't make the value-added stuff ourselves.

The solutions offered so far are of little value. North American politicians like to imagine a future in which all of us have advanced university degrees and participate in the "knowledge economy." Think it's going to happen? What will happen is that the middle-class people who relied on decent manufacturing wages will be pushed into low-paying service jobs. That's already the case for tens of thousands of Canadians. It won't affect people in government and well-paid economists, though, so they don't see the problem.

(...)

What we need to do is see beyond our belief that cheaper is better. Instead of outsourcing all their production to China, it's time for North American companies to start supporting their own cities and towns with jobs and reminding consumers that quality has value. The price we are all paying for our addiction to cheap goods is simply too high to sustain.


What do you think? Do you agree with this article? (I do)