Today our unemployment rate is 9.5. But as per National Bureau of Economic Research, recession ended in June'09 itself. Nation isn't feeling that yet, at least I'm not feeling that confident.
During depression era, FDR tried to lift country out of depression with New deal, TVA, PWA et al. Those employed many young men and it took the country out of depression. World War 2 also helped. There're so many orders for planes, tankers etc. There're new factories and construction jobs every where and created a new middle class.
In this recession also, Obama tried the same trick with Recovery act (the infamous stimulus). It didn't help much, there're opposition from conservatives for any new spending. I saw only few signs on free ways, indicating that recovery act funded that construction.
It's a proven thing that manufacturing jobs are the jobs which will lift any country from recession. One thing which I find amusing and saddening is that everything around is made in China. Is there a way, we can bring back at least few of those jobs. Electronic devices manufacturing comes to mind as I spend most of my time with them or thinking about them
Let's look at Foxconn, which many of you might not heard of. It's a huge Contract Manunfacturer in Asia with global workforce of 920K+ (mostly in China, Taiwan) and revenue of 60B USD for the financial year of 2010.
If government can construct and operate a contract manufacturing complex like that here in USA, we can create thousands of new jobs. All the consumer devices giants can pitch in and make it a Universal Manufacturing complex. HP, Apple, Dell, Motorola, Seagate, Cisco, Juniper, BestBuy should all join. No need to worry about confidentiality of designs et al. Foxconn serves so many western giants with very good track record of secrecy.
Of course all the devices prices will jump in. Govt can jump in and create a no tax zone, give exemption from regulation. (Health Insurance exemption, if you will!) The USP of Foxconn is it's cheap manufacturing costs. That's because, it's just a sweat shop where there's practically no regulation about employee conditions. If manufactured in USA, a basic iPad can cost 700 to 900 USD, which costs 500 now. But if private enterprise and govt can bite the bullet for some time and sell that product for less price for some time, this venture can be made profitable. With rhetoric so high in country now, it shouldn't be that tough to convince consumers to buy a slightly expensive product with a sticker 'Proudly made in USA'. Phobia that China is going to cross USA as super power will also help.
Now if we've to bring back outsourced software jobs from India and other countries, we need more college educated people which wouldn't happen overnight. These assembly line manufacturing jobs wouldn't require rocket scientists or college grads. We still need people with knowledge in engineering, logistics, operations and govt policy and people who can act as liaison between government and private sector.
Make no mistake, Foxconn didn't become this huge overnight. It was started in 1974. But private enterprise have money and potential to sponsor this kind of complex. Look at Manhattan Project, US developed Atom Bomb in 6 years. All we need is will and help from government. This will also reduce our trade deficit, which is at alarming high.
I'm also afraid that these min. wage salaries will become baseline for the next generations. But it's good to have people employed rather than spending tax payer's money for unemployment wages. Govt. can also include a clause on how wages should rise along with profitability. If this project get's profitable govt can slowly roll of the Tax benefits. Treasury proved that ,even TARP bailouts are profitable.
If this hypothetical scenario is ever implemented, USA will face strong opposition from China on global arena. But USA should act tough and twist few arms. Diplomacy shouldn't cost a nation's economy. If 10% of workforce remains unemployed, it's a lie to say it's out of recession.
Peace.
(I understand that this post might've sounded very presumptive, but couldn't resist posting it)
Update: 12/21/10
This is from the latest issue of BusinessWeek
http://bit.ly/dNiun0
In 2010 US 937K (non-farm) jobs .
Foxconn itself added 300K+ jobs.
Right here we can see, how many jobs foxconn is creating which can be created here in US with some effort.
During depression era, FDR tried to lift country out of depression with New deal, TVA, PWA et al. Those employed many young men and it took the country out of depression. World War 2 also helped. There're so many orders for planes, tankers etc. There're new factories and construction jobs every where and created a new middle class.
In this recession also, Obama tried the same trick with Recovery act (the infamous stimulus). It didn't help much, there're opposition from conservatives for any new spending. I saw only few signs on free ways, indicating that recovery act funded that construction.
It's a proven thing that manufacturing jobs are the jobs which will lift any country from recession. One thing which I find amusing and saddening is that everything around is made in China. Is there a way, we can bring back at least few of those jobs. Electronic devices manufacturing comes to mind as I spend most of my time with them or thinking about them
Let's look at Foxconn, which many of you might not heard of. It's a huge Contract Manunfacturer in Asia with global workforce of 920K+ (mostly in China, Taiwan) and revenue of 60B USD for the financial year of 2010.
If government can construct and operate a contract manufacturing complex like that here in USA, we can create thousands of new jobs. All the consumer devices giants can pitch in and make it a Universal Manufacturing complex. HP, Apple, Dell, Motorola, Seagate, Cisco, Juniper, BestBuy should all join. No need to worry about confidentiality of designs et al. Foxconn serves so many western giants with very good track record of secrecy.
Of course all the devices prices will jump in. Govt can jump in and create a no tax zone, give exemption from regulation. (Health Insurance exemption, if you will!) The USP of Foxconn is it's cheap manufacturing costs. That's because, it's just a sweat shop where there's practically no regulation about employee conditions. If manufactured in USA, a basic iPad can cost 700 to 900 USD, which costs 500 now. But if private enterprise and govt can bite the bullet for some time and sell that product for less price for some time, this venture can be made profitable. With rhetoric so high in country now, it shouldn't be that tough to convince consumers to buy a slightly expensive product with a sticker 'Proudly made in USA'. Phobia that China is going to cross USA as super power will also help.
Now if we've to bring back outsourced software jobs from India and other countries, we need more college educated people which wouldn't happen overnight. These assembly line manufacturing jobs wouldn't require rocket scientists or college grads. We still need people with knowledge in engineering, logistics, operations and govt policy and people who can act as liaison between government and private sector.
Make no mistake, Foxconn didn't become this huge overnight. It was started in 1974. But private enterprise have money and potential to sponsor this kind of complex. Look at Manhattan Project, US developed Atom Bomb in 6 years. All we need is will and help from government. This will also reduce our trade deficit, which is at alarming high.
I'm also afraid that these min. wage salaries will become baseline for the next generations. But it's good to have people employed rather than spending tax payer's money for unemployment wages. Govt. can also include a clause on how wages should rise along with profitability. If this project get's profitable govt can slowly roll of the Tax benefits. Treasury proved that ,even TARP bailouts are profitable.
If this hypothetical scenario is ever implemented, USA will face strong opposition from China on global arena. But USA should act tough and twist few arms. Diplomacy shouldn't cost a nation's economy. If 10% of workforce remains unemployed, it's a lie to say it's out of recession.
Peace.
(I understand that this post might've sounded very presumptive, but couldn't resist posting it)
Update: 12/21/10
This is from the latest issue of BusinessWeek
http://bit.ly/dNiun0
In 2010 US 937K (non-farm) jobs .
Foxconn itself added 300K+ jobs.
Right here we can see, how many jobs foxconn is creating which can be created here in US with some effort.
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