West coast debate
Transportation Advantage Core Neg
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- Competitiveness already bouncing back.
- Tide is turning – US manufacturing and exports bouncing back.
- Uniqueness – AT: China Surpassing the US
- China won’t undermine US competitiveness.
- US will overtake Chinese competitive advantage.
Transportation Advantage Core NegUniqueness – Competitiveness Will IncreaseDemographics will boost US competitiveness.David Bloom and Jay Lorsch, Professor of Economics and Demography at the Harvard School of Public Health and Professor of Human Relations at the Harvard Business School, 3/8/2012, “Demographics Could Give the U.S. a Competitive Edge,” http://blogs.hbr.org/cs/2012/03/demographics_could_give_the_us.html The March issue of HBR on U.S. competitiveness strikes a pessimistic tone about certain demographic facts — the education gap between young people and the jobs which are and will be available, the aging of the American population, and the related rise in health care costs. However, we see one striking omission about demographic patterns in the U.S., one that could create a resurgence in competitiveness compared to other wealthy industrial countries. The number of children per woman (TFR, or "total fertility rate") has fallen less rapidly in the U.S. than in other industrialized countries. For example, the rate in Western Europe is 1.7, as compared with 2.1 in the U.S. It's 1.5 in Italy and Spain. This disparity has prevailed for decades and has of course affected the growth rate of entrants into the prime working-age years. Indeed, between 2000 and 2010, the annual average growth rate of 20- to 29-year-olds in the U.S. was 1.3%. The corresponding figures for the U.K., Germany, France, Italy, and Japan are 1.1%, 0.3%, 0.2%, -2.0%, and -2.5%. This relative dearth of new entrants into the workforce is projected to continue in other industrialized countries. By contrast, the supply of workers in the U.S. will continue to be strong, partly because fertility has not fallen all that far and partly because of continuing immigration. With a steady or growing labor force, the U.S. will benefit from the fact that working-age citizens are the biggest savers. Savings fuel investment, capital accumulation, and R&D spending. In addition, a steady supply of workers is vital for the fiscal integrity of social security and health care systems. Competitiveness already bouncing back.Daniel Gross, columnist and economics editor for Yahoo! Finance, 5/10/2012, “The Myth of American Decline,” HBR interview, http://blogs.hbr.org/ideacast/2012/05/the-myth-of-american-decline.html JUSTIN FOX: I take it from reading your book that you don't think it's all over for the US economy. DANIEL GROSS: Not by a long shot. Look at some of the metrics. The stock market has doubled, essentially, in the last three years. We've regained our 2007 peak economically. Obviously, we're behind in jobs. And most of the numbers are moving in the right direction. It's retail sales, industrial production, exports. A lot of the big data that we look at have been moving in the way we want them to move for the last three years. Now obviously, big outliers like housing. But we had a pretty severe housing bubble, and those take a long time to get over. Tide is turning – US manufacturing and exports bouncing back.Harold L. Sirkin et al, senior partner and managing director in the Chicago office of The Boston Consulting Group, August 2011, “Made in America, Again,” http://www.scribd.com/doc/64261145/BCG-Made-in-America-Again Once again, however, predictions of the demise of American manufacturing are likely to prove wrong. The U.S. manufacturing sector remains robust. Output is almost two and a half times its 1972 level in constant dollars, even though employment has dropped by 33 percent. Despite the recent wave of outsourcing to China, the value of U.S. manufacturing output increased by one-third, to $1.65 trillion, from1997 to 2008—before the onset of the recession—thanks to the strongest productivity growth in the industrial world. Although China accounted for 19.8 percent of global manufacturing value added in 2010, the U.S. still accounted for 19.4 per-cent—a share that has declined only slightly over the past three decades. The conditions are coalescing for another U.S. resurgence. Rising wages, shipping costs, and land prices—combined with a strengthening renminbi—are rapidly eroding China’s cost advantages. The U.S., meanwhile, is becoming a lower-cost country. Wages have declined or are rising only moderately. The dollar is weakening. The workforce is becoming increasingly flexible. Productivity growth continues Uniqueness – AT: China Surpassing the USUS already re-gaining ground – other countries facing new disadvantages.Washington Post, 1/17/2012, “U.S. losing high-tech manufacturing jobs to Asia,” http://www.washingtonpost.com/business/economy/us-losing-high-tech-manufacturing-jobs-to-asia/2012/01/17/gIQA9P1S6P_story.html Just as China and other Asian countries appear to be gaining in engineering, however, other factors at work are expected to give a boost to U.S. manufacturing by making it more competitive with China. Wages in China have been growing rapidly, lessening their advantage over those in the United States. Moreover, increasing automation in the United States is lowering labor costs. Finally, analysts said, U.S. workers are far more productive. “When you add all this up together, there’s a lot of opportunity in the U.S.,” said Eric Spiegel, chief executive of Siemens, which has 65,000 employees and 137 manufacturing plants in the United States. “There’s still more skilled labor here than anywhere else in the world.” Within five years, the cost gap between the United States and China to produce many goods consumed in North America will be virtually closed, according to a recent report from the Boston Consulting Group. “China’s overwhelming manufacturing cost advantage over the U.S. is shrinking fast,” the report said. China won’t undermine US competitiveness.Michael Beckley, research fellow in the International Security Program at Harvard Kennedy School’s Belfer Center for Science and International Affairs, 2/29/2012, “How Big a Competitive Threat Is China, Really?” http://blogs.hbr.org/cs/2012/02/how_big_a_competitive_threat_i.html Thus, the question: Is China becoming a serious economic competitor to the United States? Is China, in effect, a giant Japan? Most Americans think so. Bookstores are filled with titles such as When China Rules the World and Becoming China's Bitch, and opinion polls show that most Americans believe China is already the world's dominant economic power. As I show in a recent article in International Security, however, this view is a dangerous delusion held in the face of significant evidence to the contrary. For many reasons, China is unlikely to repeat Japan's success. Most important, China is developing in a far more challenging international environment than Japan faced in the second half of the 20th century. As a result, its economy will remain more compatible than competitive with America's for the foreseeable future. US will overtake Chinese competitive advantage.Harold L. Sirkin et al, senior partner and managing director in the Chicago office of The Boston Consulting Group, August 2011, “Made in America, Again,” http://www.scribd.com/doc/64261145/BCG-Made-in-America-Again Our analysis concludes that, within five years, the total cost of production for many products will be only about 10 to 15 percent less in Chinese coastal cities than in some parts of the U.S. where factories are likely to be built. Factor in shipping, inventory costs, and other considerations, and—for many goods destined for the North American market—the cost gap between sourcing in China and manufacturing in the U.S. will be minimal. In some cases, companies will move work to inland China to find lower wages. But this will not be an attractive option in many industries. Chinese cities in the interior provinces lack the abundance of skilled workers, supply networks, and efficient transportation infrastructure of those along the coast, offsetting much of the savings afforded by slightly lower labor costs.
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