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The “Made in America” anthem is once again being sung nationwide as the number of manufacturing jobs returning to the U.S. — or actually coming to the U.S. for the first time — from overseas has hit a record level.
According to a new study from the Reshoring Initiative, in 2014 a whopping 60,000 manufacturing jobs were added in the U.S., compared to just 12,000 in 2003. This shift is due either to so-called reshoring, in which American companies bring jobs back to the U.S., or foreign direct investment, in which foreign companies move production to the U.S. And last year, about 50,000 jobs were “offshored,” this is a drop from about 150,000 in 2003.
This is a great sign. Last year’s net increase of at least 10,000 jobs was the first net gain in at least 20 years. “The trend in manufacturing in the U.S. is to source domestically,” Harry Moser, the Reshoring Initiative’s founder and president, told MarketWatch. “With 3 to 4 million manufacturing jobs still offshore, we see huge potential for even more growth.”
Rising wages in traditionally lower-cost countries such as China have made companies turn to other outsourcing locations, like the U.S. Also environmental issues, product-quality scandals have made domestic production more appealing. Government incentives and a relatively skilled U.S. workforce are also among top factors,” reports MarketWatch.
Add to this boosted patriotism and the pursuit of positive corporate images representing the U.S. economy is another factor for companies choosing to return manufacturing stateside. According to a 2013 Gallup poll, 45 percent of Americans made a special effort to buy U.S.-made products, and 64 percent said they’d be willing to pay more to buy a U.S.-made product.
“Retail giant Wal-Mart Stores Inc. is a key driver of the trend, the Reshoring Initiative’s study showed. Wal-Mart in early 2013 said it would buy an additional $250 billion in U.S.-made products over the next 10 years,” reports MarketWatch. Wal-Mart is pushing products made domestically; on its website, there’s a special section displaying its “Made in the U.S.A” products.
Wal-Mart’s move could create up to 1 million direct and indirect American jobs, estimates Boston Consulting Group. And
“Our model suggests the U.S. can offer very competitive manufacturing options, especially given many rising cost variables overseas,” according to a Wal-Mart statement on the initiative. The company pointed to 500 “active initiatives” involving product categories as diverse as tires, bicycles, home textiles, toys and cookware.
