How Cheap and International is Hurting American Manufacturing

The idea of only buying things made in America sounds nice; but with more companies moving overseas, it's harder than ever to stick to that idea. Companies move production locations because they can find low-cost manufacturing in other countries that don't have minimum wage laws; but moving labor offshore is hurting the future of American manufacturing.

To see the effects of what happens when major companies leave the U.S., look no further than Detroit. Once the hub of American automobile manufacturing, the city earned the nickname Motor City. Once the plants started laying off employees and moving to other locations, the unemployment rate started to rise and foreclosures skyrocketed, leaving the city a shell of its former self.

Automobile manufacturers aren't the only ones benefitting from low-cost manufacturing overseas. Sony, the company behind the popular PlayStation gaming console, pledged to make Brazil one of the top gaming countries in the world. According to the International Digital Times, Sony believes that manufacturing its systems in Brazil will help the company pump more than $300 million into the country's economy. Sony cited low-cost manufacturing and the need to help another country as benefits when it announced its plans to move production. While Sony will certainly help Brazil, the United States will fail to see the economic advantages.

The focus on low-cost manufacturing is sure to damage Americans. As American manufacturing jobs move to other countries, job availability in the United States decreases. Some companies hope to combat this by adding new positions in the U.S., but many of these jobs require advanced knowledge and a college degree. As the number of specialized jobs rises, the number of entry-level jobs decreases, leading many Americans without jobs. This causes unemployment rates to rise, which damages the economy; Americans may not be able to afford to spend money in stores, and the number of foreclosures may rise across the country. Despite many companies focusing on low-cost manufacturing, there is some good news when it comes to unemployment in the U.S. While unemployment rates among younger workers is high, overall unemployment rates are dropping, and both Chrysler and General Motors are hiring entry-level workers again in the U.S. Though American manufacturing has suffered in recent years, signs show that the economy is looking up again.

American companies that focus on low-cost manufacturing in other countries are bound to affect the economy in the United States. A lack of available jobs causes higher unemployment rates and more Americans that can't afford to keep their homes. While the economy shows signs of problems, some American companies hope to increase jobs in the coming years.

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