DQ3 - After reading the article in the context of the study...

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Class, I stumbled across an article written last year about outsourcing. I’m not sure if this is a microeconomic or macroeconomic issue, but I’m going to go ahead and discuss it here, because outsourcing hits many individual industries pretty hard, namely manufacturing and service industries. The premise of the article Made in America, Again by Harold L. Sirkin, Michael Zinser and Douglas Hohner of the Boston Consulting Group, is that China is falling fast as the go to country the world uses as an outsourcing destination. There are several reasons for this. The rise in wages in China, higher US productivity, Chinese infrastructure problems and a weaker dollar are among some of the reasons given.
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Unformatted text preview: After reading the article in the context of the study of Economics, a lot of it makes sense. The wage and benefit increase for workers in China are somewhere between 15% and 20% per year. When taken together, the cost for industrial real estate, supply chain logistics, and transportation costs are becoming prohibitive for goods returning to the United States. The article also gives some examples of companies that are already moving production back to the United States. All in all the article tells of resurgence in the manufacturing of goods bound for North America. A good thought provoking article. Enjoy, and let me know what you think. Eron...
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