The U.S. manufacturing industry is being revitalized. After years of sending manufacturing jobs to other countries in order to cut costs, the United States is starting to shift employment back stateside.
The practice of moving production outside of the U.S. is known as offshoring. This was extremely popular with manufacturers as it allowed them to take advantage of lower labor costs. In what some are calling, “reshoring” manufacturers are bringing jobs back to the United States.
MarketWatch reported that more than 60,000 manufacturing jobs were added in the United States last year. This is a dramatic increase from the 12,000 jobs added in 2003. But it’s not just that jobs are being brought back to the U.S. There is significantly less offshoring as well as reshoring.
In 2014 only 50,000 U.S. manufacturing jobs were offshored. When you compare that statistic to the 150,000 jobs that were offshored in 2003, you can really start to see the shift in where manufacturing jobs are going.
Last year’s 60,000 reshored jobs and 50,000 offshored jobs was the first time in nearly two decades that more manufacturing jobs were brought into the U.S. than were sent out.
It’s great that manufacturing is coming back home, but why is this the case? One reason is the rising wages in those countries where labor used to be cheap. Paying people pennies on the dollar for their work isn’t as realistic an option as it wasn in the past.
Higher wages in other countries means that it’s no longer cost efficient to wait for a boat to ship products from half-way across the globe. Manufacturers want to bring production closer to their market in order to meet higher demand.
Another reason for this shift is the growing demand for U.S. made goods. Consumers want to buy more products that are made in American, which they associate with fare wages, safe working conditions, and higher quality.
Of course, automation is another big factor in bringing jobs back to the U.S. Nothing maximizes efficiency in manufacturing like motion control. Automation provides manufacturers with increased output and lower labor costs.
According to the MarketWatch report, there are 3 to 4 million jobs that are still offshored, meaning that there is still a lot of potential for jobs to return to the U.S.