In 1990, manufacturers employed more than 124,000 people in the Rochester area, or roughly 30 percent of the private-sector workforce. Today, fewer than 60,000 people work in manufacturing—13 percent of the region’s private-sector employees.
Companies’ offshoring of jobs is not the only factor that explains this dramatic decline, but the movement of jobs overseas to cut costs has been a contributor.
So the recent shift to “reshoring” or “inshoring” jobs—moving them back to U.S. soil—certainly is a welcome trend. As this week’s iBiz feature describes, proponents say boosting manufacturing is the most efficient and cost-effective way to strengthen the economy, and reshoring may be the best way to accomplish this.
Whether reshoring is making a big difference is hard to say. Even backers acknowledge the lack of data.
A survey by the MIT Forum for Supply Chain Innovation—released in early 2013, not long after Apple Inc. unveiled plans to invest $100 million in U.S. production facilities—found that more than 15 percent of U.S. manufacturing firms “definitely” planned to bring jobs back to this country and fully one-third said they might do so. Actual job figures are not available, however.
Though they may lack hard numbers, what organizations such as the Reshoring Initiative do have is considerable anecdotal evidence and a strong set of reasons why moving jobs back to the United States is a sound business move for many companies. Among these are increased ability to respond quickly to customers’ demands, improved quality, and greater control over intellectual property and regulatory compliance.
To make reshoring even more attractive to U.S. manufacturers, education and training must be improved. Government studies show that nearly one-quarter of U.S. manufacturing workers are in their mid-50s or older. Because young people have viewed factory work as a career path to nowhere, many companies find it difficult to recruit people with the required technology skills. The Manufacturing Skills Certification System is an important initiative, but more can be done.
The point is not to make manufacturing what it was in the past; rather, it’s to build a prosperous future for this key sector of the economy.
4/25/14 (c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email [email protected]