Wednesday, August 2, 2017

Manufacturing industry in Developed countries under pressure

Manufacturing employment in the West has seen a dramatic drop as production in the last three decades shifted from developed countries in Europe and North America to developing economies in Asia, where costs are much lower. 

There’s also downward pressure on jobs and compensation in the service sector due to legal, accounting, medical billing and other services being outsourced abroad. That trend will only intensify as economies expand and services become a bigger share of spending at the expense of goods. There’s only room for so many cars in the driveway, but opportunities to spend on recreation and travel, health care and other services are almost limitless.

Note that with globalization, many U.S. goods prices continue to deflate. But domestic and international downward pressure is also being felt on services as diverse as education, health care, retailing and financial service fees and commissions.