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Economic Geography - Essay Example

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Name: Date: Economic Geography Introduction Economists of the world may be debating on the American manufacturing revival, after a couple of decades, as witnessed by the reversing trend of outsourcing by American manufacturers…
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Economic Geography
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Download file to see previous pages The most important factor, after taking into account the use of technology, is the availability of labor at reasonable cost. The main reason for outsourcing American businesses, including manufacturing, has been the relative lesser cost of production. This was due to the availability of labor in countries like China at a friction of American cost. Apart from this, available of quality services at the selected location is another factor, which manufacturers would like to consider. The other factors that go into making manufacturing location decisions include, business environment, easy access to raw material and components, overall quality of life at he selected location and marketability of the finished goods. Availability of labor This is related to the type of goods to be manufactured. For products, which require quantity output in limited time, the manufacturing becomes labor-intensive with high turnout, to achieve bigger sales volumes. In such cases, locations that can provide labor at considerably lesser cost remain the favorite of any manufacturer. This was the case of China getting most of the world’s manufacturing business, about two decades ago. ...
American manufacturers are finding it difficult to maintain their facilities, as the cost advantage is vanishing. This is truer for high turnout goods.(Hanink) The case of Foxconn manufacturing facility in China is an ideal example of the labor cost relation with the manufacturing location. China never wanted to display the living conditions of its citizens, particularly the factory workers. However, these conditions have been worse, if not inhumane. People had to huddle together for sleep in bunkers and dormitories. Wages like $400 per month were paid to a worker who would put around 50 hours a week on the plant job. People would go to market in factory uniform only. Foxconn recruited most of its interns and apprentices from the boys belonging to age group of 14-15 years, to reduce further the cost of labor.(Fallows) However, things are changing in China very rapidly. With the living conditions, as detailed above, reports of suicide attempts were frequent. That was the reason for Foxconn to introduce”suicide nets” for prevention of such attempts. Things could not be stopped there. The factory owners had to increase wages three to four times during last three years. It has created serious problems for the manufacturers and exporters. Chinese goods have been selling throughout the world, due to their lower prices. That advantage is now vanishing. American manufacturers are feeling the cost pinch from such outsourced units. Labor is available at competitive cost in America now. Reverse shifting has begun.(Fallows) Technology plays an important role in availability of adequate services The manufacturing activities for new start-ups relate to an idea, which is converted into the marketable product. In older days, the original idea ...Download file to see next pagesRead More
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