Manufacturing jobs make a comeback | Chris Hurst
By CHRISTOPHER HURST
Bonney Lake-Sumner Courier-Herald Representative
May 22, 2012 · Updated 2:41 PM
Americans are helping to bring manufacturing jobs back to America.
American manufacturing was once the cornerstone of our nation’s economy. Unfortunately, manufacturers started looking for cheaper products in third world countries. This created the trend of offshoring and outsourcing American jobs in the last two decades. The labor costs in other countries, like China, were lower and the cost to transport items across seas wasn’t great enough to deter them from moving abroad.
A great deal of manufacturing left America, and it seemed that we were content to purchase things made in foreign countries if it meant a lower cost on the items. However, saving a few dollars at a local hardware store turned out to be no bargain for American consumers as they saw their friends and family members lose their jobs one by one. But now these companies are finding that the cost of doing business overseas is increasing and that transporting goods around the world is getting expensive. Additionally, American consumers are beginning to realize we are losing too many American jobs.
The past trends of offshoring and outsourcing are becoming less viable options for many large companies as labor costs overseas are increasing, but have remained stable here in the United States. According to a Wall Street Journal article, “U.S. manufacturers are more competitive with global rivals than at any time in recent memory.” In the past two years Chinese factory workers have seen their annual pay increase more than 10 percent, placing that increased cost onto the poor products they make and ship to America.
A survey done by the Boston Consulting Group says that 37 percent of the 106 companies with sales greater than $1 billion said they plan to reshore manufacturing operations. That response rate rose to 48 percent among companies with $10 billion or more in revenues. The trend toward reshoring, or bringing manufacturing back to America, has to do with labor cost, product quality, ease of doing business and proximity to customers. These factors are encouraging even foreign companies to expand here, like the French tire maker Michelin which announced it will build a global factory in the United States.
The cost of doing business in China has reached its tipping point, as costs continue to rise, manufacturers are going to have to rethink where they produce certain goods. Manufacturing sectors looking into this are transportation goods, appliances and electrical equipment, furniture, plastic and rubber machinery, metal products, and computer and electronics. This creates great opportunity for Americans to find local jobs that will not only help them but continue to boost our economy. Currently these products account for approximately 70 percent of the goods the U.S. imports from China and, if these trends continue, much of that 70 percent could come back home to America.
In each of these respective industries, 35 percent or more stated they expect their companies to reshore production from China to the U.S. This could lead to at least 2 million to 3 million jobs in a large range of industries and an estimated $100 billion in annual output by the end of the decade.
This is good news for us locally and on a national level. As jobs come back to America we will have fewer people out of work, and we will no longer be purchasing poor-quality products made and shipped from overseas, but rather, buying high-quality locally produced items.
We need to look at the past industrial trends of offshoring and outsourcing and realize these policies were a terrible mistake. As your legislator in Olympia I have been working hard to make the business climate as competitive as possible here in Washington. As consumers, we play a major role in this transition of reshoring when we do our best to buy products made in America and even here in our local communities. We’re all in this together.