American Manufacturing Is Making a Comeback
The Industry Has Seen a Rise in American Manufacturing
It’s no secret that American manufacturing today is not the same as it was 40, 30, or even 20 years ago. Gone are many of the large steel mills, auto plants, and computer factories that supplied middle-class America with good paying manufacturing jobs.
But, there’s some good news on the horizon. It turns out that American manufacturing jobs are on the rise. In April of 2017, 12.4 million Americans worked in manufacturing, according to the U.S. Bureau of Labor Statistics. That’s up by about 25,000 jobs from a year prior, and almost a million from early 2010. Although that number is still about one third lower than manufacturing job levels in 1980, the steady increase in manufacturing jobs on American soil is encouraging.
So why is American manufacturing making a comeback? At Taylored Fulfillment Services, we see three major reasons.
- Rising Costs Overseas
In recent years, more manufacturing jobs came back to the United States than left. According to the Reshoring Initiative, an organization that works to bring jobs back to U.S. soil, 50,000 manufacturing jobs left the country in 2016, whereas 77,000 jobs returned to the U.S. Furthermore, about 60 percent of reshored jobs came from China between 2010 and 2016 due to Chinese wages going up. In short, offshore labor isn’t necessarily as cheap as it once was.
The automotive industry has brought the most jobs back to the U.S., followed by makers of electronics and appliances. Those are industries where, as it turns out, offshoring never offered significant cost savings in the first place.
- The Changing Definition of American Manufacturing
Another reason for the increase in American manufacturing jobs is the changing labor landscape in this country. So while big steel mills and auto manufacturers will likely never come back to levels seen in the last century, small batch-manufacturing facilities are taking their place. We’re seeing smaller firms and technology start-ups providing specialized products and services, and creating jobs that stay on U.S. soil.
What’s also starkly different is how we deal with manufacturing waste. In post-World War II America, the price of progress was smokestacks, landfills, and polluted water. Today’s manufacturing is lean, agile, and efficient. Waste is minimized and resources are re-used, refurbished, and recycled. This is not only a more eco-friendly and often cost-effective way to do business, but it creates jobs as well.
- The Rise of Robots
In the long run, many experts believe that robots are going to replace a significant percentage, if not the overwhelming majority, of American manufacturing jobs. That’s certainly a possibility as robots become increasingly cheaper. But for now, even as companies add more robots to factory floors, the number of human jobs in manufacturing is also on the rise.
That sounds counterintuitive, but here’s why we’re seeing that unlikely scenario play out. It seems that robots are actually helping to bring more jobs back from overseas than they’re eliminating—at least for now.
For example, let’s say a U.S. car manufacturer that employed 500 American workers shut down in 1985 and opened a plant in China, where they were able to hire 500 Chinese workers at lower wages. Today, that same manufacturer may realize it’s even cheaper to bring the plant back to U.S. soil, introduce modern robotics, and hire 250 human workers. So while in this simplified example we see a net loss of jobs over the 30 year span, it still brings 250 jobs back to U.S. soil that without robots, may never have returned.
As a U.S.-based business, we at Taylored Fulfillment Services are happy to see manufacturing jobs returning to the U.S. economy. We’re a fully integrated third-party logistics provider specializing in wholesale, retail, and direct-to-consumer unit fulfillment. Established in 1992 and headquartered in Iselin, New Jersey, we operate 1.5 million square feet of warehouse and distribution space strategically located near the nation’s busiest ports, including Los Angeles, Long Beach, and New York. Contact us to discuss your distribution, fulfillment, and warehousing needs.