Thursday, August 21, 2014

Manufacturers Love US & Mexico

Forbes writes that "Manufacturing cost competitiveness for both the U.S. and Mexico improved substantially between 2004 and 2014 compared with 25 major world exporters. Productivity-adjusted wages and currency rates have remained stable or improved relative to the other countries, making the U.S. and Mexico prime real estate for new assembly plants.  Both nations also have very competitive energy costs thanks to new oil and gas discoveries in the U.S."

The article is based on a new study by Boston Consulting Group, titled "The Shifting Economics of Global Manufacturing". The results of the study are sobering for Western Europe: "Manufacturing costs in most of Western Europe were relatively high a decade ago, and cost competitiveness has weakened considerably in several countries. Average manufacturing costs in Belgium rose by an estimated 7 percent compared with those in the U.S. They rose by 8 percent in Sweden; 10 percent in France, Italy, and Switzerland; and 21 percent in Australia." However as Europe keeps losing ground the USA and Mexico are the new darlings of manufacturers:


Friday, August 8, 2014

Income Inequality Is Not Rising Globally. It's Falling.

Tyler Cowen writes in the New York Times: "Income inequality has surged as a political and economic issue, but the numbers don’t show that inequality is rising from a global perspective. Yes, the problem has become more acute within most individual nations, yet income inequality for the world as a wholehas been falling for most of the last 20 years. It’s a fact that hasn’t been noted often enough."