America has always been known as a nation of producers, however, times change and economies follow. Historically, an agrarian economy in the United States was transformed by the Industrial Revolution. More recently, the rise of the Internet has ushered in a new economic era. While the United States is not necessarily the manufacturing powerhouse it once was, this remains a vitally important sector of the economy. According to the National Association of Manufacturers, the manufacturing sector employs more than 17 million Americans and contributes more than $2 trillion dollars a year to the economy. If you isolated the manufacturing sector in the United States, it alone would be the 9th largest world economy. In recent decades, manufacturing jobs have been leaving the United States at an alarming rate. Forbes, however, believes it’s “Time to bring back manufacturing jobs to the U.S.”
In order to understand why now might be the time to bring back manufacturing back, it is important to first understand why it left in the first place. During the latter half of the 20th century, many American companies began to outsource manufacturing to other countries. By doing so, they were able to increase their profits, as labor rates were significantly lower in other countries than they were in the United States. Additionally, many companies took advantage of tax benefits that accompanied moving manufacturing offshore.
The number of jobs that left the shores of the United States is staggering. U.S. News and World Report believes there are 5.1 million fewer American jobs than there were in 2001. The trend toward outsourced manufacturing became a popular practice, with “70% of large manufacturers having at least some production in non-U.S. locations.” With this mass exodus of jobs from the US over the last few decades, many have called for a reversal of this alarming trend and manufacturing is slowly being revitalized.
There are several reasons for the recent resurgence of American manufacturing jobs. These include the increase in burdens that come with manufacturing and delivering from locations across the globe, the decrease in energy costs, the increase in demand for products that are made in the US, and the advantage of leveraging the high skill level of the American worker. Additionally, the environment benefits from the use of fewer resources to transport goods made from a distant continent.
However, this movement does not just rest on the shoulders of the manufacturers themselves. Consumers also play a key part in helping to create American jobs. A Consumer Reports study found that “almost 8 out of 10 American consumers say that they would rather buy an American-made product than an imported one.” Consumers can directly contribute to the creation of American manufacturing jobs by being more discerning in their purchasing habits and supporting manufacturers that create jobs and products in the United States.
Currently, there is a sufficient amount of momentum in the effort to bring manufacturing jobs back to the United States that there is good reason to believe that the trend will continue. The Business Journals reports that it is expected that “as many as 30 percent of America’s imports from China will be made in the United States by 2020.” As “Made in America” becomes a growing trend, the shift from the cheap labor of overseas manufacturing to the skilled labor in the United States will mean more opportunities, better economic indicators, and greater self-sufficiency as a nation. As this next production evolution continues to pick up steam, the American economy will follow.