What caused the manufacturing jobs to move out of developed nations to emerging nations?

Answer 1

There are two main reasons that work in tandem:

1) Wages in developing nations are significantly less than those in developed nations. This is due to a number of factors. Firstly, labor is protected in developed nations and so there are court costs, labor union costs, and medical insurance costs that need not be paid to unprotected workers. Additionally, in developing countries, the cost of living is less, so workers can be paid less. As compared to service jobs, manufacturing jobs typically require less education and can therefore be performed by a less educated population.

2) Shipping is almost effortless now. Around 100 years ago, to get something from Asia to North America would take months and be subject to whether the boat could handle the waves. There were a lot of costs associated with transportation, so this negated any benefits that could accrue from cheaper labor in Asia. With transportation becoming standardized on massive ocean liners, river barges, trains, and airplanes, costs of shipping are relatively negligible for any singular item.

The combination of cheap wages abroad and easy/predictable shipping has led to most manufacturing jobs being relocated in developing countries.