Thus, the overall wage structure remains low. Further, there has historically been little attention given to worker skill development. Low tax rates also discourage development of a more skilled workforce by limiting funds for schools and other training institutions. In summary, the low-skill manufacturing strategy does little to develop worker skills, and without skills, there is little prospect for a sustained increase in earnings, particularly in today's economy. As trade barriers fall and transportation and communications costs decline, low-education areas can no longer compete on the basis of low labor costs alone.
Manufacturers can now build plants in Asian and Latin American countries where wages are much lower.
In response to the heightened competition brought by globalization, U.S. manufacturing operations have become increasingly sophisticated. Manufacturers have adopted new computerized technologies that automate production, improve quality control, facilitate communication, and better manage inventory. Greater emphases on quality and the tailoring of products to specific customer needs have led to the adoption of new management practices, including job rotation, problem-solving teams, and total quality management. While we focus on low-education areas, the results are relevant to all rural communities where manufacturing is a major employer. Workers need basic math, computer, and other technical skills to run the equipment, and they need problem-solving and interpersonal skills to make integrated operations run smoothly.