With international labor appearing to be much less expensive than domestic labor, many American companies opt to “offshore” their manufacturing. This form of outsourcing may save corporations money, but it also takes jobs away from local employees. As trends like this increase, the U.S. economy is taking a hit.
However, some companies are working to reverse this trend.
“Reshoring,” or the act of bringing jobs back to the United States, is becoming more common. Out of all the industries that make up the domestic economy, manufacturing brings in more jobs than any other.
This trend is largely due to rising foreign labor costs. Since the 2009 recession, domestic manufacturing has increased by 20%. This newly growing workforce is comprised of 12.3 million manufacturing workers earning an average salary of $81,289 per year.
Who are the companies making the effort to employ these workers? Wal-Mart tops the list, reshoring a total of 4,838 jobs. Ford is next, creating 3,200 jobs. Following behind them are Boeing with 2,700 jobs, General Electric with 2,656, and General Motors with 2,345. These five companies combined have created 16,000 reshoring jobs over the course of five years.
Automation Supplements Domestic Manufacturing
In addition to bringing human jobs back to the United States, companies are also expanding their use of automation. In 2015, industrial robot sales increased by 15%. This represents a total of 253,748 units sold, which is the highest number on record. Such technology helps speed up the modernization of tools for engineering, constantly creating new opportunities for manufacturing companies. By utilizing robots, factories can efficiently make products in their domestic factories rather than hiring foreign workers.
The global market for industrial robotics rose to $11.1 billion in 2015, making it a significant player in the international economy as well. This technology completely transforms manufacturing systems, which leads to employment of engineers to create them. Of domestic industries, the auto industry made up 38% of the total robotics supply. Electronics used 28%, metal/machinery made up 12%, and rubber/plastics utilized 7%.
Increased Reshoring Prioritizes American Workers
While offshoring labor may be a cheap option for American corporations, it is not always the most efficient or ethical option. By building up domestic manufacturing and exploring the use of automation, companies can boost the national economy while still making their products.
As technology broadens its role in industry, it will likely mean more engineers and scientists involved in manufacturing, further increasing employment opportunities. We could see significant developments in the coming years if more companies implement a reshoring model. With potential like this, the U.S. economy only has room to grow.
Dennis Spaeth, Electronic Media Editor at Cutting Tool Engineering, holds a Bachelor’s in journalism from Northern Illinois University. Including nearly nine years at CTE, Dennis has more than 30 years of daily newspaper and trade journalism experience.
