Offshoring has been an issue for a long time. The United States has been sending jobs overseas for decades. But now there is talk of bringing those jobs back to the United States. Reshoring is the idea that American manufacturers will bring production back to the U.S. At first glance, this is an exciting idea. Logically, reshoring production will provide manufacturing jobs for Americans and a boon the the U.S. economy. But are we being realistic about reshoring? Is reshoring actually going to happen to the extent that we believe it will and would it actually benefit the U.S. as much as we would hope it would?
What are our expectations?
An optimistic view of reshoring has U.S. manufacturers bringing back as many jobs as, if not more than, were sent overseas. This makes sense, right? The jobs were here, then they were there, and now they will be here again. Many of those manufacturers have grown since offshoring, which should mean more jobs. It’s just a matter of geography, right? It’s not that simple, however.
Why are we excited about reshoring?
There are a number of reasons to be hopeful about reshoring. It seems likely to happen considering wage increases overseas, higher freight costs, higher energy costs, and an increased demand for domestic products, just to name a few factors. The more goods America makes, the less we have to import, and the more we can export. Investments in manufacturing provide more of an economic return than nearly any other industry. Manufacturing is repeatedly referred to as the backbone of America’s economy, and a strong manufacturing sector fosters a strong economy.
Will reshoring bring more jobs to the U.S.?
If a manufacturer conducts operations in the U.S., there are going to be jobs for American workers. That goes without saying. However, it’s not likely that reshoring will create as many jobs as were lost due to offshoring, or that it will generate as many jobs as were created overseas. One of the reasons offshoring happened is because it was more affordable to send production to other countries where workers could receive lower wages than in the U.S. Businesses make decisions that are good for business. It does not make sense to bring back manufacturing just to pay higher wages.
Automation provides a way to reshore manufacturing without driving up costs.
The reason to bring production back to the U.S. isn’t purely out of patriotism and national pride. Industrial automation edges out human workers in nearly all aspects when ti comes to manufacturing. Automation is also a great solution to high wages and high freight costs. Of course, because automation displaces workers, we shouldn’t expect reshoring to produce a slew of jobs for Americans. But bringing manufacturing back to America will benefit the U.S. economy.