Jeff Rubin, the former CIBC economist turned author, has suggested in his books that as energy costs rise, some manufacturing will return to North America. Indeed, there are growing signs that his prognostication will prove to be accurate.
An article in the online edition of the Hamilton Spectator offers this assessment:
Manufacturers are lining up to come back to North America, but a desperate labour shortage is hobbling their efforts.
Dubbed "reshoring" in industrial jargon, the trend sees companies that fled North America for low-wage countries such as China and India drifting back as Chinese wages rise and the costs of moving their products from the other side of the world becomes a burden.
While the situation may be grounds for guarded optimism, one part of the piece, in discussing why a return to North America is becoming increasingly feasible, must give one pause:
Other factors making North America attractive again are continuous innovation that has dramatically improved the cost performance of some companies, and wage erosion during the recent financial crisis. (Emphasis mine)
"There has been a sharp wage correction since 2009," said John Rose, chief economist of the City of Edmonton. "The positive note there is that it allows you to position yourself to move forward. When you come out of the downturn your cost structure is closer to what it should have been."
The fact that the 'cost structure is closer to what it should have been' has, I think, rather disturbing implications. Is the assumption underlying the statement that a severely chastened and disciplined workforce is one that will be willing to work in manufacturing for, say $12 an hour to start, so grateful will it be for the chance of reemployment?
If that is indeed the scenario fated to unfold as costs for overseas manufacturing continue to rise, will we eventually see a reechoing of labour history? Given the current low rate of unionization in this country, will we see, as workers once more become dissatisfied with being exploited, a resurgence in union drives so that once again, as in the days of yore, the employer will be forced to share more generously the profits made possible by the worker?
One can only hope for a return to both prosperity and equity in the workplace.
