People often credit offshoring with the drastic decline in manufacturing jobs in the United States. Manufacturers sent production overseas to save money and increase profitability. Today, many manufacturers are trying to keep production at home. Reshoring is the practice of bringing manufacturing operations back to the United States from overseas. While production continues to come back to the U.S. we shouldn’t expect a giant influx of manufacturing jobs to follow, however. Reshoring isn’t going to stop job loss in American manufacturing.
How offshoring affected manufacturing jobs
In the late 1970s, around the time offshoring became prevalent, there were roughly 19 million people employed in the manufacturing industry in the United States. Manufacturing employment nose-dived from 2000 to 2010, and the number of people employed in manufacturing fell below 12 million. We’ve seen a slight uptick in U.S. manufacturing jobs over the past 5 years, thanks in part to reshoring efforts. The number of manufacturing jobs doesn’t reflect manufacturing productivity in America, however. The manufacturing industry is as strong as it’s ever been – current output for American manufacturing is at an all-time high, even after adjusting for inflation – despite there being significantly fewer manufacturing jobs available to workers.
Automation is the new offshoring
Efforts to bring production back to the U.S. may create some short term jobs and bolster the nation’s economy, but we won’t see the type of employment in manufacturing that we saw in the past. It’s important to recognize that offshoring isn’t the only thing to cause job loss in American manufacturing. Automation is responsible for close to half of the job loss in the manufacturing industry. As industrial automation continues to improve, and the emphasis on automated systems increases in the manufacturing industry, we should expect more job loss in manufacturing. Industrial robots provide a cheap source of labor, and they’re more efficient and productive than human workers.
What will we do?
There are two camps when it comes to talking about job loss and automation. One side believes that robots will cause mass unemployment, and the other side believes new jobs will be created. Those who believe in a tenacious work force that finds new ways to be useful have history on their side. We’ve never seen automation advance this rapidly before, however. One thing is certain, though. Automation will continue to displace workers in the manufacturing industry. It’s important for those in manufacturing to consider this as technology moves forward.