In the summer of 2000 U.S. factories employed 17.3 million workers. Now, a little more than a decade later, over 5 million more manufacturing jobs have been lost, a disappearance that has devastated cities, towns and families across America.
I was born in a GM town and had uncles and family friends that worked at the car plant. Since most of them were recent immigrants from Holland, these jobs allowed them to start raising families, buy houses, and secure the American dream. For immigrants and young people today, such opportunities have evaporated as outsourcing and the rise of China have taken hold.
Earlier this year, Boston Consulting Group released a study that said that the U.S. should experience a "manufacturing renaissance" in the next 5 years as the wage gap with China shrinks. They cite factors such as annual wage increases in China that have averaged 15% to 20% per year and a rising yuan contrasted with flexible work rules and state government incentives here in the U.S.
Reshoring is the term that is now being used to describe bringing manufacturing jobs back home. Proponents of reshoring point to the need to use a total cost of ownership model when making decisions about where to build products and locate factories. They cite such advantages as improved quality, reducing inventory pipeline, clustering manufacturing near R&D centers, reducing IP risk, and strengthening a companies ability to respond to customer demands. The business case for bringing these jobs back to America is improving. The hollowed-out economy we suffer from today which has helped to create a shrinking middle class can be filled in to revitalize not only our manufacturing sector, but the broader economy as well.
With the upcoming Presidential election, there has been renewed discussion on jobs and manufacturing. Rick Santorum has been notable with his plan to cut the income tax on manufacturing companies from a maximum of 35% to 0%. Momentum is gaining on both political and economic fronts that could pave the way for an eventual resurgence in America's manufacturing base. The tide of jobs, factories and the products they produce is starting to trickle back towards American shores where hope and opportunity await.