Keep in mind costs aren't just what you have to pay people but also things like regional security, the risk of the government nationalizing your company and assets, ability to get skilled/capable/honest people.
Basically there has to be a degree of stability, including a centralized government that can provide a certain level of law and order in order to attract capital. Otherwise you have to price in the costs of missing a day of work because the factory is being shelled by government/anti-government groups, etc.
Corruption is fine, bribes are fine, because they can be priced in and managed, what can't be managed, planned for and predicted is instability.
For the record my bet on where the next big booms will be is Indonesia, Mexico and to a lesser extant west Africa.
Also a lot of those same stability/security concerns, but applied to the trip from here to there, likely across the ocean, which is something that people have largely taken for granted for years now other than some stories of Somalian pirates.
Extreme corruption, lack of rule of law, extreme violence to name a few. Mexico is basically a failed state: the government doesn't even control large parts of the territory it claims, ultra-violent drug cartels do. How is that a good place to build factories?
Other central American counties are at least as bad. El Salvador has a higher death rate from violence than war-torn Syria during the height of its civil war.
Countries farther south would be much better bets, but they still have huge problems with corruption. Brazil, Chile, Peru, etc. aren't nearly as bad, and do have their own manufacturing industries (Brazil is home to Embraer, for instance).
> Brazil, Chile, Peru, etc. aren't nearly as bad
Brazil is just as bad.
Drug gangs essentially own their territory. Brazilian state is legitimized by the police's monopoly on force. Gangs don't allow police in their territories which implies the laws of Brazil don't apply there. They have seceded from brazilian territory and established their own parallel government without anyone noticing.
It's common knowledge that local businesses operating in those places are doing so with the blessing of these drug lords. They even took on the role of police by punishing small time criminals who interfere with with their drug dealing operations by scaring away customers. They implement barbaric punishments like cutting off the fingers of thieves or shooting their hands. People living in those places may not even get mail because it's too risky to send mailmen in there, I've seen people who had to go to some remote post office to pick up correspondence.
It's actually kind of impressive. Shows what a people can do when it has the balls to organize and most importantly to arm itself.
The issues are generally that in the next largest potential cheap manufacturing sources (South Asia, SE Asia, Africa) they’re either not big enough or have extremely poor logistics and red tape. A big part of the East Asian miracles have been extensive infrastructure and bureaucratic emphasis on making exports as efficient as possible.
Japan and Korea have plenty of domestic manufacturing.
What you are saying is that both sides have agreed to put policies in place to make foreign goods more expense, to the point that domestic labor can be competitive, and corporations will move manufacturing back to the US.
But as others have posted as questions. Is this sustainable? If the US is not competitive unless barriers are put in place, can that be done indefinably, or will this naturally reverse again when the US Gov can no longer afford to prop up a more expensive and inefficient workforce.
In all those cases, there's little or no job growth. Just a couple administrators and engineers. Nobody on the line, because there is no line, just robots and conveyors.
Someone has to maintain the robots and conveyors, unless you’re assuming that has also been automated. I suppose this could also be contracted out if it hasn’t been automated.
Sure factories employ skilled labor. But very few. And what are unskilled laborers supposed to do?
American has 30M folks who's employment has descended to service industry (teller, cashier, food service). They can't all be retrained as Engineers, even if we needed 30M more Engineers which we don't.
It's not. This is disaster planning.
We're being forced to bring production back home because we can't keep outsourcing to a region subject to control by a potential adversary. If war breaks out with China, access to Taiwan for chips or Vietnam for socks is going to become difficult. Blockades will be immediate.
If this were about money, we'd move production to South America. That we're keeping it this close to home after years of shopping everything globally suggests we're building infrastructure for a supply chain that can't be interfered with by foreign governments.
You mean Vietnam surely?
Probably don't have chain correct, and it is different for different industries.
But there was definitely a progression of 'local salary goes up', 'time to move to next cheapest country'.