COMMENTARY | High gas prices are not something typically associated with the general definition of "a good thing." Even as a Forbes report is anticipating oil remaining in the $98 a barrel range for all of 2012, seeing gas prices remain higher than normal could work in the advantage of the United States. Adding more fuel to the fire is the potential for Nigeria to cut off oil shipments to the U.S. amid a labor dispute according to the Associated Press. Of course, smaller supply equals higher prices for gas.
Those higher fuel prices translate into just about everything costing more money, including get back and forth to work. Higher gas prices mean higher shipping prices, which means outsourcing jobs, particularly manufacturing jobs, is not as valuable to companies. A report from Rock Center speculates that by 2015 overseas manufacturing will only save companies 10 percent. The report also mentions that companies will begin to shift operations back to the United States to save money, which could be a corporate slogan by that time.
So higher fuel prices could actually be a good thing for the U.S. economy, albeit in the long-term. In addition, foreign labor is not as cheap as it once was because the shift of manufacturing caused a hiring boom in markets like China, which is also in the Rock Center report.
So while consumers might lament the high cost of fuel, those higher prices could eventually drive businesses and jobs back to America. Sure the effects will not be felt for a few years, but just to see the "Made in the USA" label regularly again might make the pain associated with higher gas prices bearable.
Everything is purely speculation. However, when it comes to the bottom line, corporations will do whatever is required to keep margins high, or at least higher. And that could be reassuring news for everyone.
282 comments