“Made in the USA is making a comeback,” writes Time (April 11, 2013). The U.S. has seen its manufacturing growth outpace that of other advanced nations, with 500,000 jobs created in the past 3 years. It marks the first time in more than a decade that the number of factory jobs has gone up instead of down. Apple just decided to assemble one of its Mac computer lines in the U.S., and Walmart, which pioneered global sourcing, said it would pump up spending with American suppliers by $50 billion over the next decade. Airbus will build JetBlue’s new jets in Alabama.
U.S. factories increasingly have access to cheap energy thanks to oil and gas from the shale boom. For companies outside the U.S., it’s the opposite: high global oil prices translate into costlier fuel for ships and planes. And workers from China to India are demanding and getting bigger paychecks, while U.S. companies have won massive concessions from unions over the past decade. One economist went so far as to say: “The offshoring boom does appear to have largely run its course.”
Modern factories, though, have more machines and fewer workers — and many new manufacturing jobs require at least a 2-year tech degree to complement artisan skills such as welding or milling. Some experts believe it won’t be too long before employers will expect a 4-year degree. “Manufacturing is coming back, but it’s evolving into a very different type of animal than the one most people recognize today,” says a McKinsey director. “We’re going to see new jobs, but nowhere near the number some people expect, especially in the short term.”
Still, manufacturing represents a whopping 67% of private-sector R&D spending as well as 30% of the country’s productivity growth. Every $1 of manufacturing activity returns $1.48 to the economy. “The ability to make things is fundamental to the ability to innovate things over the long term,” says one Harvard prof.
Discussion questions:
1. Why will the US never recover all of the manufacturing jobs lost in the past 50 years?
2. What factors create more opportunities for “reshoring”?