April 28, 2014

For everyone who wants the United States to become a (bigger) manufacturing powerhouse again — so, most people in the U.S., and every member of Congress — a recent report from the Boston Consulting Group is a mixed blessing. On Friday, BCG released its rankings of cost competitiveness in manufacturing around the world, and the U.S. came in second place, after China. It is now more cost effective to produce goods in the U.S. than Brazil, the report found.

The U.S., along with Mexico, is one of the BCG's "rising stars" of global manufacturing, for having "significantly improved relative to nearly all other leading exporters across the globe." At least 300 companies have brought their manufacturing back to the U.S. from overseas, because "it just makes economic sense," BCG senior partner Hal Sirkin, a co-author of the report, tells Yahoo News. "The gap is closing and, when you add the transportation costs, it makes a lot more sense for a lot of products to be made in the U.S. than in China."

That sounds great, right? But remember what made China so alluring to manufacturers in the first place — low labor costs, lax environmental standards, and overworked factory workers? Here's BCG's explanation for why the U.S. is back in the manufacturing game:

The key reasons were stable wage growth, sustained productivity gains, steady exchange rates, and a big energy-cost advantage that is largely driven by the 50 percent fall in natural-gas prices since large-scale production of U.S. shale gas began in 2005. [BCG]

Another way of saying that: Fracking, foreign exchange rates, and that "stable wage growth," which Reuters calls "a euphemism for the fact that, in inflation-adjusted terms, industrial wages here are lower today than they were in the 1960s even though worker productivity has doubled over the same period of time." The only one of those factors that isn't controversial is the stronger yuan.

As this chart from The New York Times shows, the jobs that have been created in the post–Great Recession recovery have skewed toward the low end of the pay scale:

Most manufacturing jobs pay pretty decently, especially compared with fast food service. But as we celebrate the return of the American manufacturing sector, it's worth remembering that it's only partly because "Made in China" is becoming more expensive — "Made in the USA" is also becoming cheaper, for better and for worse.
Peter Weber

3:56 p.m. ET

House Democrats had the perfect GIF picked out and ready to go when House Republicans pulled the vote on the American Health Care Act on Friday afternoon. Within minutes of the announcement, the official account tweeted this out:

Sometimes, a picture really is worth a thousand words. Becca Stanek

3:49 p.m. ET
Justin Sullivan/Getty Images

Those of us still recovering from the Google Reader massacre might want to sit down to read this one. Starting in June, Google will kill off yet another of its most beloved products — this time, the instant messaging app Google Talk, better known as "GChat," New York Magazine reports.

GChat first launched in 2005 as hip alternative to AIM and it persisted due to its simplicity and ease of use. Google will still offer its other instant messaging platform called Hangouts, and Gchat users who haven't already transitioned will seamlessly be rolled over to the service when Gchat pings its last ping on June 26. Hangouts is actually not a new service; it has been around for about four years, and is a glitzier messaging app (you can doodle in it, for example).

As New York Magazine writes in its eulogy to the platform, "Giving somebody your personal Gmail account to message was an offering of friendship, an invitation to gossip freely away from the potentially prying eyes of company-owned Slack channels and Campfire rooms. If somebody wanted to Gchat, you knew to expect some good dish about your boss, or your ex, or your boss's ex."

RIP GChat. You will live on in our hearts. Jeva Lange

3:42 p.m. ET

President Trump reportedly spoke to Paul Ryan around 3 p.m. ET on Friday and requested the House speaker pull the health-care bill, a leadership aide told Politico. The vote was originally scheduled for Thursday afternoon before being pushed back to Friday.

Many organizations counting "no" votes found as many as 34 Republicans said they would oppose the bill ahead of the planned vote; if the legislation lost more than 22 Republican votes, the proposal would not have passed the lower chamber. White House Press Secretary Sean Spicer had indicated in his early afternoon news conference that the vote was going to go ahead anyway, despite apparently not having enough support to pass, but refused to reveal the president's "strategy."

Trump had issued an ultimatum to House Republicans on Thursday night: Pass the American Health Care Act on Friday, or lose the opportunity to repeal ObamaCare once and for all. Despite two days of tense negotiations — mostly with the far-right House Freedom Caucus, members of which oppose the bill for retaining too much of ObamaCare — it appears Ryan failed to get enough votes. Jeva Lange

2:53 p.m. ET
John Moore/Getty Images

President Donald Trump may have handed control of his business empire over to his sons, but he'll apparently still be getting regular updates on his family business' profitability. In an interview with Forbes published Friday, Eric Trump said he was "deadly serious" about maintaining a clear separation between business and government to avoid any conflicts of interest — only to admit minutes later that he will be keeping his father in the loop on business matters. "Yeah, on the bottom line, profitability reports, and stuff like that, but you know, that's about it," Eric said, noting the updates would likely be "quarterly."

President Trump previously indicated he would not talk to his sons about the business at all, but Eric was singing a different tune in his interview with Forbes. "My father and I are very close," Eric said. "I talk to him a lot. We're pretty inseparable."

For ethics experts already skeptical of President Trump's plans to pass his business off to his kids instead of a blind trust, Eric's comments further call into question just how separate the president will actually remain from his business empire. "He is breaking down one of the few barriers he claimed to be establishing between him and his businesses, and those barriers themselves were weak to begin with," said Larry Noble, general counsel of Campaign Legal Center and former chief ethics officer at the Federal Election Commission. "But if he is now going to get reports from his son about the businesses, then he really isn't separate in any real way." Becca Stanek

2:52 p.m. ET

Former Senate Minority Leader Harry Reid's one-time deputy chief of staff, Adam Jentleson, skewered House Speaker Paul Ryan on Friday for only having "demonstrated talent for two things: slickly rebranding GOP policies that help the rich and hurt working people [and] integrating himself with powerful and influential people."

Jentleson, who now works as a senior strategic adviser for the progressive public policy group, the Center for American Progress, went on:

Because [integrating himself with powerful and influential people] includes the press, [Ryan's] credentials for speaker were widely accepted as a given. Few asked whether he really had the skills. That's a generalization — in private, many reporters questioned whether Ryan was up to the job. But there was little public questioning. In the hierarchy of skills for a successful Hill leader, public salesman ranks relatively low. For Ryan, it was a main selling point. Many of the stories about why Ryan would be a good speaker cited the fact that he would go on TV a lot. That should have been a red flag. A leader's most valuable resource is time, and TV is time-consuming. It's less time spent listening to members, organizing, planning [...] Ryan's appeal for a VERY HARD job was always based on fluff and glitz, not a record of leadership or accomplishment or requisite skills. [Twitter]

Ryan is reportedly the focus of the White House's frustration over the GOP health-care bill failing to get the support of moderate Republicans as well as the conservative House Freedom Caucus members. While the White House still expects to force a do-or-die vote Friday afternoon, many keeping track of "no" votes have found the Republicans do not have sufficient support just yet, although there is still time for that to change.

As for Jentleson: He's kicking back to watch what happens. Jeva Lange

2:34 p.m. ET
Courtesy image

Maybe you've tried to stay strong, but "there's nothing shameful" in admitting you wish you had a robot to clean out your cat's litter box, says The Litter Robot III Open Air ($449) is easily the most praised of today's self-cleaning options. As sci-fi in its looks as in its concept, the Litter Robot waits until your cat has exited, then rotates its spherical chamber so that clumps are screened out and fall into the closed drawer below. An "extremely durable" machine, it "does wonders for reducing waste odor," and it even has a night-light to aid older cats with ­vision problems. The Week Staff

1:50 p.m. ET
Cameron Spencer/Getty Images

A group of fourth-graders was told to "go back to Mexico" after winning a robotics competition in Indianapolis. It was the Pleasant Run Elementary School team's first time competing at the science fair; the low-income school had just been given a grant to develop a robotics program for the first time a few months ago, USA Today reports. After the team was awarded first place, they were reportedly showered with racist slurs by rivals and parents. The team consists of three Latino and two black students.

"I'm not surprised," said the team's 10-year-old captain, Elijah Goodwin, " because I'm used to this type of behavior." The Week Staff

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