Globalization, automation, cheap overseas labor…the causes of offshoring are well known by now. However, the reshoring movement, or the reshoring of jobs back into the United States, has been on the rise in recent years too, but the causes aren't nearly as well known.
Due to the increasing cost of foreign labor, the special skills needed for modern manufacturing, and powerful new tools for engineering and manufacturing, more companies are bringing speciality manufacturing jobs back to the states. Between 2010 and 2016, companies like Walmart, GM, Boeing, Ford, GE and Caterpillar have taken the lead in the reshoring movement, which has brought an estimated 338,000 jobs back home. As a result, the reshoring movement has helped improve not only the manufacturing industry, but also the economy.
Despite the loss of many manufacturing jobs in recent decades to automation, new jobs are being created. In 2015, industrial robot sales increased by 15% to reach 253,748 units, and 38% of those bots were hard at work in automobile plants. These industrial robots have made U.S. manufacturers far more efficient, allowing them to increase output by record levels. However, humans haven't been cut from the assembly line altogether, and these robots still require human handlers. Since the Great Recession, U.S. manufacturing output has surged by more than 20%, and at the same time the average salary for manufacturing workers has climbed to $81,289.
Simply put, the productivity of the American manufacturing industry has increased significantly due to automation technology. Many manufacturing jobs now require special skills and advanced education, which is great news for American workers. The need for advanced education reduces the likelihood that these new jobs will be made redundant by automation. It also reduces the risk of these reshored jobs from being offshored again.
That's why many people believe the American reshoring movement has just begun.
See the infographic below for more facts and figures.