Get used to a new word for 2013: reshoring.
Conventional wisdom says that American jobs are flying like crazy over to China. But a recent piece in the Christian Science Monitor says otherwise.
There's no official tally of the number of jobs returning, but Harry Moser, director of the Reshoring Initiative, which aims to bring manufacturing jobs back to the United States, estimates that 50,000 jobs have returned in the past three years. He bases his estimate on a close read of the media and on reports his organization receives. If that number is accurate, reshoring would account for 12 percent of the manufacturing jobs the Bureau of Labor Statistics reports returned to the American economy since 2010.
The Boston Consulting Group, a global management consulting firm, in a September report projected that returned manufacturing could bring 5 million new jobs by 2020 and add $90 billion in US exports to the economy.
Why is this happening?
Rising wages in China, unpredictable supply-chain problems, oil prices, and the risk of intellectual property theft are making manufacturers more wary of producing overseas, analysts say.
That's the beauty of the free market, in this case the labor market. Eventually, workers start to demand more money and everything evens out as the labor market adjusts in its growth. But this isn't even the best part.
It's not just that it's getting more expensive to produce overseas. It's also getting cheaper to produce back at home. "It's the shale gas revolution," says Kevin Swift, chief economist and managing director of the American Chemistry Council. "There are low-cost, abundant sources of energy [here] now."
Mr. Swift says that's a game changer for his industry: "We were being written off as being noncompetitive. It's completely changed. There's significant investment on the books ... 50 [planned] projects valued at over $40 billion."
Yes, indeed. Things are looking up for our country and it makes me quite happy!