Everybody concerned with the US economy in the last 15 years has read countless stories about the rise of American companies outsourcing their operations to other countries. We hear about how a company needs to protect the bottom line, how this will keep the company best suited for the future…even at the expense of American blue collar workers.
While I’ll admit the common American laborer has faced many issues of late, some of which having nothing to do with outsourcing*, there’s little denying that the loss of factory work for the country has been felt in the last few years. The collective economic waistline of the country has been shrinking of late, resulting in our belt being tightened up a couple notches – less money in hand for the consumer means less spending. And less spending means a weaker economic foundation for everybody, especially the corporations selling you the goods.
However, the same tides that swept away nearby production appear to be shifting back our way; Companies like Master Lock, Ford Motors, NCR, Caterpillar, and General Electric have been ‘reshoring,’ ‘onshoring,’ or whatever you want to call it, back to the States. We came across an article posted by Reuters in April titled “Big manufacturers more likely to embrace ‘Made in USA’-survey” to back us up. Click here to read it.
The article references an online survey conducted back in February by the Boston Consulting Group (BSG) of 106 US-based manufacturers illustrating this relieving new trend, especially dealing with the countries’ largest manufacturers. To quote the article, “{the survey} found that 37 percent of all U.S.-based manufacturing executives either plan to or are actively considering moving production from China. That rises to 48 percent among companies with more than $10 billion in revenues.”
Why, you might ask? The article references one the biggest reasons being that the rest of the world has caught up with the costs of operation in America. The article calls America ‘a low cost developed country,’ where wages here are actually lower than in many developed European/Asian countries. Add the belief that wage costs will continue to increase in China and the result is a greater demand for comparatively affordable US goods, and you will have a greater demand for more local production.
Projected interest/consideration of ‘onsourcing’ is all well and good, but how much of an immediate impact can the US expect to see if these current global trends continue? Harold Sirkin, co-author of the study, sees great potential. He estimates that up to 3 million new jobs could be created by the end of the decade. To put that in perspective, there are approximately 17 million current US manufacturing jobs across the country…so the difference could be very immediate and very impressive.
So hold your head up, America! Things may very well be on the upswing soon!
*One different issue addressed in the article is that there are currently 600,000 US factory jobs unfilled because companies cannot find qualified workers – it’s clear that there is a need for more emphasis on science, math, engineering in today’s education system
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