Don't discount the "low end". Serious money can be made churning out shoes , sox and tee shirts where the fashion demand can change while the product is still on the boat from Asia. And cell phones seem to be trending the same way.

From an employment standpoint, I agree. Better to have labor intensive industries that can generate jobs than to have everyone just sitting around on government assistance. There's another issue here though, which while not directly related to labor costs, has a bearing on the overall picture.

China, Japan, the USA and Europe all need to import energy, which means they have to generate export income to pay for it. China and India will need aircraft, heavy equipment, machine tools, turbines, railcars and so forth, to complete their industrialization. Who will build that stuff, us or them? And if they build it, what can we sell them to replace those exports? I don't think shoes and t-shirts will work.

I realize I've strayed somewhat from the topic, but I see these things as being ultimately connected. The erosion of US industry due to cheap Chinese labor has had a greater impact than just those manufacturing jobs being lost. Along with the jobs goes the expertise in everything from engineering to R&D to management to finance. It's not just the assembly-line workers who are affected when industry relocates. The skills that go with maintaining those industries are also lost. For me, that's the key to this equation. With a growing middle class and ambitious people who are acquiring the necessary skills and education, can the west (in general) compete at the high end with China and India?

We've held the high ground for a long time, but they're rapidly catching up, just as Japan did in the 80's. To me, that's the major issue that lies ahead - not how many low-end jobs we can recover as a result of their increased costs.

ebear