Census Bureau Business Dynamics Statistics data for — Establishment numbers: EPI analysis of U. Census Bureau County Business Patterns data for — Employment per plant has ebbed and flowed, increasing during recoveries and dropping much more sharply in downturns, as shown in Figure A.
Massive job losses in just six years—during the recession and the China import surge of —, and during the Great Recession of ——account for more than all of the net loss of nearly 5 million manufacturing jobs in this period. The loss of these jobs was particularly costly for women, Black, and Latinx workers, who were left behind as employment collapsed and many of the remaining manufacturing plants shifted to rural locations in right-to-work states in the West and South Madland, Walter, and Eisenbrey But these gains are exactly on par with gains across the entire economic recovery period from to , during which , manufacturing jobs were gained each year, on average.
And while the June data show an upswing in manufacturing jobs, more recent jobs data indicate that the nascent and partial recovery in manufacturing is at risk due to recurrence of COVID in states that have reopened, including many in the South and Western United States Hannon and Kiernan ; WSJ Pro ; Bartash Contrary to popular myth, growing trade deficits, and not automation, are responsible for the vast bulk of manufacturing job and plant losses in the past two decades Guilford Growing trade deficits with China between and 2.
Starting in , the U. More than half of that rise has come since the Trump tariffs were first imposed in March This stronger dollar keeps making U. Equally problematic, the Trump tax cuts on corporate profits incentivized offshoring for certain types of production while also raising after-tax profits.
This has attracted more foreign capital to U. Note: Rates in currency units per U. Unfortunately, the Trump administration has simply ignored the linkage between these policies and a rising U. While the Treasury did, finally, name China a currency manipulator last year, it was too little, too late Scott Notably, the agreement was neither a binding constraint on Chinese monetary policy nor a real commitment to action on the part of the U.
Overvaluation of the dollar is one of the most important structural causes of growing U. In order to help rebalance U. The strength of the dollar was sustained by massive currency manipulation between and Bergsten and Gagnon , but since then large private capital inflows to U. There are several tools that can be used to address dollar overvaluation.
Their proposal would direct the U. Federal Reserve Board of Governors to set this tax at a level needed to rebalance trade and capital flows, giving the Fed both a new mandate—to achieve balanced trade—and a new tool to achieve that goal. Millions of good, high-wage manufacturing jobs can be created by rebalancing trade flows, something that would contribute to recovery from the COVID recession.
But the U. In fact, the real U. Source: EPI analysis of data from U. There is a single world price for commodity products like wheat and soybeans, as Dean Baker has noted Baker , If the dollar rises relative to those of our competitors, then the dollar price of U. Thus, there is a strong, negative correlation between soybean prices, for example, and exchange rates, as shown in Figure E.
When the real price-adjusted dollar declines, as it did between and , soybean prices increase. Grain and soybean prices started falling as soon as the dollar began to rise in We need to realign the dollar to rebalance trade. Manufacturing and the farm sector will both benefit directly from dollar realignment. Census Bureau c.
And when it comes to important sectors like autos and auto parts, General Motors has been closing assembly plants in Ohio, Michigan, and Maryland while increasing its reliance on imports from Mexico AP ; Samilton ; Mirabella In fact, GM has been ceding market share to foreign producers for decades, and has grown increasingly reliant on imports from Mexico and other countries.
Meanwhile, market share has been captured by foreign producers. And the supplier networks for these plants will be built in Mexico, not the U. The Phase One China trade deal is a bust, too.
China promised to increase purchases of U. But Beijing is unlikely to meet these targets Craymer and DeBarros Beijing has also strategically adjusted to the Trump tariffs. China is simply exporting more goods elsewhere, and the U. China also reduced the value of its currency by As a result, the U. Leading suppliers of pharmaceutical imports—many produced by U.
Going offshore can also cause underutilization of existing manufacturing capacity and, ultimately, plant closings and layoffs. Finally, companies that move outside the United States may lose valuable customers, who may switch to other U. Italian chip maker Dynamit Nobel Silicon is among the foreign companies that opened a factory in the United States to be closer to its American customers.
On the surface, looking for low-wage sites for manufacturing is a logical way to reduce total production costs. But workers in less developed countries tend to be less productive than Americans, so a straight comparison of wages gives an inaccurate reading of the potential savings. Worse, in most businesses, direct labor is no longer a significant portion of total costs. The wage savings are therefore unlikely to have a big impact overall.
In some cases, they are offset by higher transportation costs alone. The semiconductor industry has split into two market segments: commodity and semicustom. But a business cannot design in a vacuum. It cannot exploit new technologies if it has no chance to apply them. The fact is, design and manufacturing are linked. Moving engineering offshore along with manufacturing is not a solution; it just accelerates the process.
When companies do that, they give potential competitors not only finances and managerial expertise but also engineering skills. The U. Assembly of color TVs soon followed black and white, and manufacturing followed assembly. By , not one U. Many people contend that the move offshore dispossessed U. The semiconductor industry has fallen into the same trap.
Americans have all but given up on the production of high-volume semiconductors such as 64K RAM chips. But memory chips are the cornerstone of semiconductor technology. Because they are a high-volume product, they serve as a testing ground for engineers trying to produce new technologies for other applications and for manufacturers trying to perfect delicate processes.
In addition, they generate earnings for further research. By abandoning the commodity memory products, electronics companies put their design capabilities and technological leadership at risk. Even normal product development suffers. There is no way to make rapid design changes and product updates at a remote location. Meanwhile, collaborators become competitors. He has the capability and the market.
The pattern is widespread. Hitachi, which has made microprocessors under license from Motorola, is now introducing its own bit microprocessor. Toshiba, which acted as a supplier of copying machines to 3M, is now promoting its own brand name. Singatronics, which for years produced electronic games and pocket calculators for multinationals, is now pushing its own proprietary line of electronic medical instruments.
And Daewoo, while still a subcontractor to U. The danger that collaboration will give way to competition is immediate and real. As the newly industrializing countries of Asia lose their advantage as low-wage producers to places like China and Thailand, they are increasingly anxious to develop their own technology-intensive industries and marketing capabilities.
Even in aerospace, it is hard to satisfy a coproduction requirement anymore by just letting the foreign plant rivet an aluminum assembly. The host country wants the whole technology, and it is not long before a competitor has been developed. Many offer U. Malaysia has stepped up its efforts to get companies to invest in research, and Ireland has been encouraging foreign businesses to boost their product development efforts there. Indonesia, for example, has no patent protection at all. Korea denies copyright protection to software, semiconductors, or foreign works.
Other countries require an importer of technology to license local companies to use that same technology for modest fees. Offshore manufacturing is most promising when three conditions hold: the dollar is strong, foreign wages are low, and trade barriers are absent.
Most of the offshore investments between and were motivated by the strong dollar. Now that the dollar is considerably weaker, running those operations is more expensive. There is no simple solution to their dilemma. As the dollar declines, Deere will have to either raise prices or lower profit margins. Reducing offshore activities when the dollar weakens is not a realistic option. Most of the offshore investments are irreversible capital expenditures, and they are hard to liquidate.
But even purchasing arrangements are hard to change overnight. The move is projected to create over 20, new jobs at Apple's existing campuses and at a new office location which has yet to be announced. Apple's job creation announcement comes amid criticism aimed at the company for its outsourcing of manufacturing jobs to China, and accusations that it has dodged U.
A March press release from Apple claims the company supports some 4. While companies have been under significant pressure over the past decade to invest in the domestic manufacturing sector, many of the companies bringing the most jobs back to America are not necessarily doing so for political reasons. Some of the most common reasons cited for reshoring manufacturing jobs are to capitalize on the brand value of the Made in USA label, proximity to the U. More: Public sector jobs: States where the most people work for the government.
The pledge has reduced some of the risk of relocating production to the United States and has helped companies such as Element Electronics, which won a contract with Walmart shortly after opening a small flat-screen television plant in Michigan, make the decision to reshore.
Data is based on reshoring announcements and press releases gathered and quantified by the Reshoring Initiative. Only companies that had already completed significant offshoring projects, or had specifically chosen to manufacture in the U. Companies were ranked based on the total number of jobs they plan to add or retain in the United States through domestic capital investments. Facebook Twitter Email.
Which manufacturers are bringing the most jobs back to America? Show Caption. Hide Caption. Analyst: Tariffs likely to cost American jobs. President Donald Trump's decision to impose tariffs on imported steel and aluminum has resulted in retaliation from the country's closest trading partners, which at least one analyst warns will cost American jobs. June Trump: 'The era of global freeloading' is over. President Trump says the era of "global freeloading" is over.
Petitions for trade adjustment assistance TAA — a government scheme designed to soften the blow from jobs sent overseas — shows that about 37, workers had their positions sent overseas between 15 March and 31 July , , a nearly identical rate to the same timeframe in There was no need to do it in the middle of a pandemic.
Workers were told in an email the layoffs were part of a restructuring plan. The company will rely on production abroad, displacing up to workers in the US.
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