Tuesday, 28 October 2014 00:00

Work Wanted: Reshoring Initiative is meant to bring manufacturing jobs back to the United States, and it's working

Written by Candace Moody | Florida Times Union

You’ve probably heard of offshoring: the flow of manufacturing and service functions and jobs to countries outside the United States. Companies seeking to reduce the cost of labor and materials moved factories from Northeastern states to Southeastern states as early as the 1880s; by the 1920s, the New England textile mills had almost all been shut down. After the North American Free Trade Agreement (NAFTA) took effect in 1994, hundreds of operations and as many as 700,000 manufacturing jobs moved to Mexico. During the early 2000s, many thousands more jobs moved to Southeast Asia and India and eventually to China.

By 2003, the U.S. was losing 150,000 net jobs a year to overseas locations. But a group of industry leaders wanted to stop the bleeding, and in 2010, Harry Moser founded The Reshoring Initiative, an industry-led effort to bring manufacturing jobs back to the United States. Moser, like his father before him, worked in manufacturing. As he watched the industry lose jobs over the course of his career, he decided to take action to reverse the trend.

The Reshoring Initiative helps companies large and small calculate the true cost of manufacturing overseas and understand the risks associated with offshoring: increased wages and fluctuating currencies, higher transportation and fuel costs, and threats to intellectual property rights. I spoke to Moser about his organization and how many jobs are flowing back to the U.S. Moser said that in 2013, the U.S. gained 40,000 reshored jobs from 100 companies, putting the net job loss overseas at zero that year. He estimates that by 2016, we’ll be regaining 50,000 jobs a year.

Moser said that reshoring does more than bring back desirable, high paying jobs. Bringing back manufacturing will also reduce the federal budget deficit (by increasing the corporate and personal tax base) and reduce the annual trade deficit, which currently stands at $500 billion. Moser estimates that if all offshore manufacturing jobs were brought home, the U.S. would gain between 2 million and 3 million jobs.

One of the reasons that the U.S. runs such a high trade deficit is our seemingly endless appetite for low cost consumer goods, from iPhones and computers to children’s toys and T-shirts. According to Moser, countries like Germany and Switzerland run trade surpluses, in part because their citizens prefer domestically produced products. Germany’s trade surplus in June of 2014 was 16.5 billion euros, and the country’s unemployment rate was 4.9 percent.

Americans are also beginning to consider the societal cost of becoming a nation of consumers instead of producers. In addition to losing jobs and skills — becoming a nation that doesn’t fix things — we produce more and more waste as products become so cheap it’s easier to dispose of them rather than repair them. In 2007, Americans threw out about 570 billion pounds of solid waste, much of it containing toxic chemicals like mercury and flame retardants. The U.S. contains only 4 percent of the global population, but we generate more than 30 percent of the planet’s total waste.

Wal-Mart, long considered one of the companies that created the nation’s demand for low cost goods, announced last year that it was increasing its commitment to American-made goods. In 2013, the company announced that it would buy an additional $50 billion in U.S. products over 10 years in an effort to grow U.S. manufacturing and encourage the creation of U.S. jobs. The company is still committed to keeping prices low, so it will be interesting to see whether the American suppliers can make the numbers work.

Learn more about The Reshoring Initiative at

Link to original article from The Florida Times Union

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