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That is, on labor content, not labor cost.
The next 15 years will see the labor content of manufactured products drop ping very rapidly.
A second certainty is that "employers everywhere will be looking to reduce labor content in their business models as Obamacare makes employees unambiguously more expensive".… Time was, American businesses could surmount such regulatory officiousness.
The most threatened are those "quality" and "service" types of differentiation strategies that require skilled craftsmanship, high labor content, customized design, elaborate marketing and distribution networks, and personalized extras the costs of which rise at above-average rates.
"The reason car companies go places like Hungary, Thailand or China is that the models require greater labor content, or because it is politically expedient to build cars there," said Graeme Maxton, an analyst at Autopolis, an industry consulting firm in London.
In fact, it was the regular finding of the common slope of about 80% for fighter, bomber, and transport planes that started speculation about a general theory of learning curves.2 Further investigation showed that, although operations having essentially the same proportions of labor content have fairly common slopes, other operations differ in characteristics and corresponding slopes of curve.
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Consistently, agriculture, food, and rubber industry have been specified as key sectors promising for export as they are highly linkage-oriented, able to induce high multiplier on income, and possess high labor contents, while garment is unlikely to contribute profit due to the lack of inter-industrial linkages (Chhuor 2016).
Certainly many, if not most, Chinese exports contain some slave-labor content, one reason goods are so cheap.
Some of this would occur naturally; it's interesting that some of the most cutting-edge developments in the low-labor content restaurant model have occurred in high cost, progressive San Francisco, where the new restaurant Eatsa has almost entirely automated service, and the startup Momentum Machines is developing a mechanized system to cook and assemble burgers, and other meals.
"Some companies producing very high labor-content goods like clothing and footwear may still prefer low-wage labor in China to producing in the U.S.," Perry said.
Its immediate future lies in supplying the high labor-content products the other Asian nations may have to abandon and Japan already has.
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Justyna Jupowicz-Kozak
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