Hi Oil Brings US Jobs Home?
An interesting side note on the high costs of oil is that some manufacturing jobs are coming back to the US.
“It’s not just about labor costs anymore,” says Rubin. “Distance costs money, and when you have to shift iron ore from Brazil to China and then ship it back to Pittsburgh, Pittsburgh is looking pretty good at 40 bucks an hour.”
Even at $4 a gallon for gasoline the US still has the lowest energy costs in the world outside of the Middle East where they pull oil from the ground for virtually free. So that gives the US an advantage, still, over much of the “industrialized” world. And now that the demand for labor in the 3rd world markets such as India and Mexico is driving up their local pay scales, add shipping from there back to the US and manufacturing in the US stands to gain.
High energy costs are a burden to a lot of people though I do occasionally mock those who are so “impoverished” they have to drop their cable television to buy gas… but such problems are seldom one sided. Just as the fall in the US dollar drives up energy it also makes US manufactured goods less expensive for overseas buyers. And if the cost of bringing manufacturing home is dealing with $4 gas for a year or two, I think I’m OK with that.