Flat U.S. Wages Help Fuel Rebound in Manufacturing Assignment

Flat U.S. Wages Help Fuel Rebound in Manufacturing - Assignment Example With the sluggish economy, waning consumer confidence, and less access to credit (among other factors), manufacturers have struggled to keep pace. This reality, however, appears to be drawing to a close as manufacturing numbers and production output have been up in recent quarters. This phenomenon is partly fueled by the reality that wages in this sector have remained stagnant, ironically allowing manufacturing companies to catch up on their productivity and increase profitability due to less expense related to labor costs and benefits. It is important to understand the relationship that exists between labor cost and the cost of manufactured goods. In times of decreased production, if wages kept pace with inflation, many plants would quickly find themselves in dire situations. With the tables reversed, however, and production picking up due to stagnant wages, many industries in the manufacturing sector are returning to the United States. This further fueling the economic development, even though many argue that the retailing and services side of the economy are left out in the dark because of decreased buying power exhibited by workers. There are certainly challenges facing the manufacturing industry in America as it continues to compete in an increasingly global economy, but the current signs are positive and the trends are moving in the right direction.