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Don’t kid yourself—US manufacturing jobs are never really “coming back” from China

Reuters/Chris Keane
Workers assemble televisions at Element Electronics in Winnsboro, South Carolina.
  • Heather Timmons
By Heather Timmons

White House correspondent

Published This article is more than 2 years old.

“More than half of manufacturing executives have said they’re actively looking to bring jobs back from China, so let’s give them a reason to get that done.”

US president Barack Obama’s State of the Union speech made several mentions about boosting employment, and specifically about bringing jobs back from China. The “more than half” statistic appears to be a reference to an annual Boston Consulting Group study, most recently published in October, that found for two years running that 54% of the manufacturing executives surveyed were ” planning to ‘reshore’ or are considering it,” up from 37% of executives surveyed in 2012. The survey also found 16% of executives were actively shifting production back to the US in 2014, due to rising wages in China, up from 7% in 2012.

Mostly thanks to those rising wages and other workers demands, caused in part by the country’s labor shortages, China has become less cost competitive than many other economies—but is still more competitive than the US—as Quartz has reported:

Rising costs in China and pledges from US retailers like Walmart to buy more US-made goods have contributed to an uptick in manufacturing jobs in the US in recent years, according to the US Bureau of Labor Statistics:

But manufacturing employment is still nowhere the levels of the 1980s and 1990s, and there’s no reason to think it will ever regain those heights again. For starters, there are plenty of other low-cost manufacturing destinations competing with China for low-skilled manufacturing work, including Vietnam and Bangladesh.

And factory jobs continue to be increasingly automated, to the point where unskilled labor no longer has a place on the factory floor in many developed economies. The US sectors where domestic manufacturing is growing are high-tech and focused on “lean” assembly lines that have as few people and as many machines as possible.

In South Carolina, for example, where textile manufacturing is having a revival, factories are opening with a fraction of the workforce they once did, as the New York Times reported last year. One mill employs only 140 workers in place of the 2,000 it would have had in 1980.

 

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