China’s entry into the World Trade Organization 16 years ago was devastating for U.S. factory jobs, but there are signs that American manufacturing is making a comeback.
“For an expanding number of companies the math behind relocating production to the U.S. is starting to add up,” writes Andrew Browne in The Wall Street Journal. “Industrial land in the U.S. is often cheaper than in Chinese coastal cities. The shale-gas revolution has dramatically lowered U.S. energy costs.”
President Donald Trump threatened to slap tariffs on Chinese imports as a key part of his campaign pledge to restore U.S. factory work. But job-creating investment from China tripled to $45.6 billion in 2016 from the prior year as the country’s businesspeople seek ways to cut shipping costs and provide better service to U.S. customers.
“Although U.S. wages are still higher than those in China, the gap is rapidly narrowing,” Browne writes. “But the real key is technology: Advanced manufacturing is leveling the playing field.”
A Chinese shoe manufacturer found a way to replace 50 workers with one machine that makes rubber parts in sneakers, the WSJ reported.
When automated companies are no longer chasing cheap labor, they will find greater reasons to do business in America. But don't expect Rust Belt factories to make a sudden comeback.
As technology replaces workers, the U.S. labor market will also evolve.
“Investors will be recruiting skilled technicians—if they can find them,” the WSJ said. “A recent Deloitte study predicted that the U.S. will need to fill 3.5 million manufacturing jobs over the next decade, but faces a shortfall of two million skilled workers.”
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