Low-wage countries no longer exist.
In recent years, the cost of global manufacturing has changed dramatically. There are hardly any low-wage countries and reshoring is increasing strongly.
Since the 1980s, much production from the United States and Europe has moved to low-wage countries. Asian countries were especially popular. This was a pain to unions who feared dramatic job losses.
The idea is still prevalent that European workers are too expensive for production companies. The fear argument of job loss is regularly used by employers’ organizations during collective bargaining.
Unfairly. Production activities have been reshoring for a number of years. In recent years, a strong increase in reshoring has already been observed in the United States. Although not with the same number of jobs, due to automation and mechanization. However, the labor market in the United States has an increasing need for production personnel due to reshoring.
The reasons are multiple for reshoring. The costs of outsourcing often turned out to be higher and the quality required was also often lacking. But with the growth of the Asian countries, the cost level there has also increased sharply. While western countries saw a stabilization or even decrease [the Netherlands] in costs.
In the Netherlands, complaints are often made about the high costs of production, especially the wage argument. Nothing is further from the truth. The Netherlands is extremely competitive when the comparison is made on a global scale. In the past 10 years, average manufacturing costs have even fallen. China and South Korea have made huge strides and the forecast is that this will continue to rise in the coming years, bringing these countries to the same cost levels.
Other countries such as on the African continent have too little infrastructure and insufficient knowledge and experience among the population to be currently a competitive force for Western countries. South America on the other hand, but this continent also has the same development as the Asian tigers.
The growth development in non-western countries has also increased prosperity and associated costs in those countries. This creates a natural level playing field. Reason for Western companies to take reshoring as a strategy seriously. Because when production costs fall against each other, criteria such as supply chain costs, supply chain reliability and quality are decisive. Certainly now that the consumer is making more and more demands, it is opportune to bring your production back close to the market