Monday, October 26
       

Why US Isn’t Losing As Many Jobs to China

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Sending American jobs overseas is a hot topic this presidential election year, with Democratic front-runner Hillary Clinton promising to get tough on companies that offshore U.S. jobs and Republican lead candidate Donald Trump vowing to boycott Oreos after the cookie’s manufacturer moved some of its production to Mexico.

The truth is, however, for the second consecutive year, the number of jobs returning to the United States is about the same as, or slightly higher than, the number of jobs leaving American shores.

Reshoring Initiative graphic

Reshoring Initiative graphic

In 2015, the United States added 67,000 manufacturing jobs — including those that  previously had been moved to facilities overseas and then brought back to U.S. factories, and those created by foreign-owned companies and investment. Since 2010, more than 249,000 jobs have been reshored.

The U.S. trade gap, though, is still in the $500-billion range. For example, Americans workers produce only about 3 percent of the total apparel sold in this country.

The most labor-intensive positions are the ones that traditionally have gone to overseas workers, positions involved in the making of apparel, furniture and toys — products that require a fair amount of work but don’t command high prices.

Closing that gap could make a significant difference for America’s middle class.

“If we were to just be neutral, if we imported [only]as much as we exported, we would [add]approximately 4 million manufacturing jobs. Generally middle class to upper middle class jobs,” said Harry Moser, president of the Reshoring Initiative, which he founded in 2010 to encourage manufacturers to bring jobs back to the United States. “You have a dramatic impact on the income inequality in the country because it’s the middle class hollowing out that’s been the major cause of the income inequality.”

Reshoring Initiative graphic

Reshoring Initiative graphic

The United States lost 3.2 million jobs to China between 2001 and 2013, according to the Economic Policy Institute. Three-fourths of those jobs were in manufacturing. About 60 percent of the reshored jobs between 2000 and 2015 came from China.

Lower labor costs and fewer regulations are usually the reasons U.S. companies move production to foreign facilities. However, rising labor costs in China and other countries, along with high international shipping costs, have made offshoring less attractive to some companies.

Something that could slow the return of manufacturing jobs to the U.S., though, is the lack of skilled workers.

“We don’t have near enough of [them]and one reason is students choose not to go into manufacturing because they think all of the work is going offshore, so that’s not a good area to get trained in,” Moser said. “So, by showing them that’s it’s coming back, we’ll get the workforce we need to be competitive.”

The U.S. is roughly breaking even right now and it’s beginning to look like a trend. The question is: will it continue?

“It’s a long, hard slog to bring the jobs back,” said Moser. “It’s not easy. It took us 50 or 60 years to get to where we are offshoring and it’s going to take decades to bring it back.”

By Dora Mekouar

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