Reversing US Manufacturing Decline

The other day I read an article about the effort to reshore manufacturing to the United States. Reshoring is taking industries that have gone overseas and reintroducing them to the the united states.

The article in Quality Magazine:

Here’s why reshoring will benefit the US:

  • Reshoring will reduce imports and trade imbalance
  • Reshoring will increase exports and reduce national debt
  • Reshoring will mean jobs and higher quality of life for middle class Americans
  • Reshoring will mean more tax revenues generated and reduction in national debt

I was impressed with the efforts of Moser, and how patriotic his efforts are.

One point of the article is that it makes economic sense for companies to bring manufacturing back nearer to the point of comsumption, especially now that fuel prices have increased, and consequenlty, shipping prices have increased.

So, I sent a link to the article to an industrialist that I know. I have an enormous amount of respect for this man. He is soft spoken, fair, immensely powerful, modest, personable, analytic. I hold the response that I got to be considered, and worthy of deep consideration.

What my friend told me is that the problem with reshoring, which they had considered is “… most manufacturing that can work in this country requires people with a modicum of technical skill and education, and there just aren’t enough qualified or committed applicants yet.”

My friend also wrote:” There are frequent stories about manufacturing companies, particularly in the Midwest that have lots of jobs they can’t fill.” Quality of life issues for Midwest living, and manufacturing jobs.

So this is a supply and demand problem. It also seems to be a chicken / egg problem. The US has been importing engineers under H2 visas for nearly 20 years. That has depressed the value of engineering compensation. Also because of offshoring, there are fewer jobs available to engineers. Higher education costs have skyrocketed as well. So the risk to reward ratio for persuing an engineering career in the US makes it an unwise career choice. It is much more lucrative to persue other careers.

It appears that we are going down the same path with medicine. Doctors are seeing less compensation and higher education costs, along with higher insurance costs and increased support costs while trying to collect fees from third parties (insurance companies), and it is apparent that medicine is not a good career choice; The risk / reward ratio makes it a bad choice. The medicine situation has gotten so bad that we now how doctors leaving the field. 

The situation is just getting worse.

At the last minute before it expired in 2012, Congress passed a short extension to lowered student loan interest rates. While this seems like a victory on the surface, it hides a steady erosion of incentives to get advanced degrees in the US. The policies of the government seem to be discouraging instead of encouraging US competitiveness.

In the biography of Steve Jobs by Walter Isaacson , Jobs meets with President Obama and tells him that there is a dearth of engineers in the US, and that Apple can find those engineers in China, and so opens manufacturing plants there. We’ve since learned of the horrid working conditions in those Chinese factories. Yet that knowledge has not altered Americans buying habits. Neither conscience, nor long term self interest over-rides our short term self interest. We continue to buy the latest gadgets that are designed using imported workers on H1-B visas and manufactured overseas under deplorable conditions.

I fear that the US will continue to decline unless we have a culture shift that reveres domestically produced goods over imported luxury goods, and also reveres and rewards productive careers such as engineering and medicine over celebrity and entertainement careers. But that means shunning those that flout promiscuous comsumption and ostentation. It means patronizing simplicity. It means a return to the real core values that this country was built upon.

6 comments on “Reversing US Manufacturing DeclineAdd yours →

  1. Does your blog have a contact page? I’m having trouble locating it but, I’d like to send you an e-mail. I’ve got some suggestions for your blog you might be interested in hearing. Either way, great blog and I look forward to seeing it expand over time.

    1. I’ll try to get a contact form up on this blog. I didn’t think it would be needed, but several have asked for a way to communicate.

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