High Oil Prices Help Revive US Steel Industry, Create American Jobs

This trend will continue in the manufacturing industry for as long as shipping costs stay high. Now lets just make sure that the unions don't get too powerful again and bankrupt the industries like they have in the past (GM is a current example). I'm not saying that unions are bad, but when they demand more then the company can afford, the company crumbles, which hurts everybody.

It's good for people working on those specific industries, but for citizens of a country as a whole, it's not good.

Any extra income that steel workers made is more than compensated by the higher price for steel that everybody else is paying, and if they weren't paying that extra money, that money would be spent elsewhere in the economy (they would get the steel + something else, instead of just the steel, so they are getting less for their money; their money buys less).

This isn't actually surprising at all, and I don't think it is a bad thing. If it hadn't happened due to high oil prices, it would have happened in a decade or two as workers in countries quickly leaving behind their current "developing" status started demanding the kinds of wages workers here get paid.

In time, labor everywhere will be equally priced. Money flows from rich countries to the poorer countries we buy things from, in turn enriching those poor countries until the difference in wealth begins to close. High oil prices are, in part, a symptom of this kind of effect- competition for oil supplies among developed and developing countries is growing rapidly as more people are rising out of poverty and demanding the kinds of luxuries they can now afford.

@ James
While GM's extra labor costs are a burden, for the most part GM has dug its own grave. They failed to invest in research and new technology, they put spare cash into investments instead of retooling and modernizing their factories, they failed to see the impending energy crisis (Toyota didn't, and that's why it's now #1), and on and on. One of the worst things they did was get involved with residential mortgages, and now foreclosures are drowning them. So while perhaps full medical benefits for retirees was too large a concession, they would be handling it if not for all the other failures. Of course, a national healthcare system would put that issue to rest. Anyway, don't blame workers for fighting exploitation. I'll have a bit more to say on that when I respond to Anthony.

@ James K.T.
The benefit of producing steel domestically is that all that cash stays in our local economy instead of being shipped overseas. Capital flight makes us poorer as a nation and gives power to our economic rivals. Those steel workers now have cash which they'll spend on other things, allowing more people to be employed in all sorts of other industries than if that money had gone to China.

@ Anthony
In an ideal world with fairness and justice I would agree with you. That's the way it's supposed to work. In reality, workers are exploited by an oligarchy who use the profit to import expensive Western goods and build swimming pools in their mansions instead of making the workers' lives better. They also buy weapons to suppress the masses so they can continue exploiting them. That's what happened in America until unions formed to break the cycle. As unions have weakened (union membership is half what it was 30 years ago) the result has been the shrinking of the middle class and the widening of the divide between rich and poor.

@JSDreyer: In an ideal world with fairness and justice I would agree with you. That's the way it's supposed to work.

Unfortunately, unions became yet another organization dedicated primarily to perpetuating and maintaining their own power base. In order to do that, they had to appease their membership by continually delivering ever higher wages and benefits for the same amount of work... or less.

In effect, unions became one of the primary causes --if not the main cause-- behind the offshoring of US jobs.

And Anthony is correct, wages in foreign countries are on the rise. Consider, for example, that many businesses now no longer consider India when offshoring support services, as salaries there have increased dramatically as a result of higher demand and competition over a shortage of qualified workers.

I totally agree regarding GM. What's worse there is that they could have been ahead of the curve had they continued R&D on the EV-1 and its successors. But no, GM and Ford and Chevy all had to compete on who could build the largest and most expensive SUV...

...and totally ignored the lessons learned from Japan during the FIRST oil crisis.

C'mon Michael, seriously? Unions are the main reason companies went overseas? Unions often win higher wages, like 25 or 30%. Wages in China were fifteen times lower than here. Even without unions, companies would have gone overseas. They went overseas b/c the dollar was so strong, and wages in third world countries were an order of magnitude or so lower (with less regulation to boot). They bought the politicians off so they wouldn't tariff any imported goods. Unions had very little to do with jobs going overseas.

India and China are good exceptions that prove the rule, but their incredible double digit growth year over year for the last decade has meant plenty for everyone. Most countries don't have that kind of growth, and most of the profit is siphoned off by the ruling class before table scraps trickle down to the workers. I really hope for parity across the world, and there are some good programs working toward that end, like some coffee growers and Guatemalan sweater makers.

Look what the weakening of labor unions has resulted in in the US: since 2000 worker wages have increased 0.2% after inflation. We've not had a raise in eight years, despite per worker production increases. However, the wealthiest 1% have seen an increase of 37%. The rich are literally stepping up on the backs of workers. The middle class that the unions helped to build 80 years ago is literally melting before our eyes.