Tuesday, December 20, 2016

The cost of doing more manufacturing in the US may be overstated by many companies

How much would it cost to make iPhones or other popular goods if companies like Apple and various PC manufacturers were not allowed to use low-wage workers (as at Foxconn ) overseas?

Some say that a $600 iPhone would cost $1300, but Business Insider gives much lower estimates, here. The biggest problem would be companies really couldn’t find that many workers quickly.  But there is a “bad karma” problem with US consumers addicted to prices artificially low if actually supported by slave or dorm labor overseas.

But robotics would quickly eat into the job gains.

A relevant issue would be a hidden consumer benefit to doing more manufacturing of PC’s in the US.  Microsoft has trouble correctly integrating all of its massive Windows updates with the hardware and firmware of many manufacturers (HP, Acer, Lenova, Dell).  If more of the manufacturing were one on places like Texas or California, you might see better quality and more stable operating system updates.

Consumers planning new laptop purchases might want to make them soon, if price hikes really happen.  I have thought about the desirability of doing most of my work on a computer actually manufactured for Windows 10 with the 2016 Cumulative Update taken into account.  It’s getting hard to keep most laptops stable for more than three years.  (But a 2009 Dell XPS now on Windows 7 but originally Vista is still pretty stable seven years later.)

Where Trump is really right is that there is a critical national security reason to make more power grid components (especially transformers) in the US, in geographically convenient and stable places like the Shenandoah Valley or Piedmont.

Here is CNN’s account on what really happened when Trump intervened with the Carrier plant in Mike Pence’s Indiana.  (Yes, Indiana wants me.)

There's an obvious issue for many people in that a lot of coding is outsourced (especially to India).  The trend for this started with getting Y2K testing done in the late 1990s.  But companies say without doing so they could not get work done.  

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