{"id":33828,"date":"2016-06-29T22:11:14","date_gmt":"2016-06-29T20:11:14","guid":{"rendered":"http:\/\/www.w-t-w.org\/en\/?p=33828"},"modified":"2016-06-29T22:11:14","modified_gmt":"2016-06-29T20:11:14","slug":"is-bringing-manufacturing-home-the-answer","status":"publish","type":"post","link":"https:\/\/www.w-t-w.org\/en\/is-bringing-manufacturing-home-the-answer\/","title":{"rendered":"Is Bringing Manufacturing Home the Answer?"},"content":{"rendered":"

Call it \u201creshoring,\u201d or \u201cinsourcing\u201d if you prefer. By any name, a significant movement of manufacturing back to U.S. shores may be exactly what the US economy needs. Factory movement overseas has opened a hole in the American job market that nothing else can truly fill, a point stressed in blue-collar populist appeals from both political parties.<\/span><\/p>\n

The reshoring movement is, by definition, a fusion of politics and economics. \u00a0 <\/span>Industrial giants will not move operations back to American soil if doing so makes no sense from a financial standpoint. Given the expense involved in relocating factories, some of the gloomier analysts believe decades of movement overseas might be irreversible. Every business cost is ultimately passed along to consumers, whose willingness to pay significantly more for goods with a \u201cMade in America\u201d label has always been greater in theory than in practice.<\/span><\/p>\n

However, government policies were a big part of the reason offshoring happened, and wise policy can set the economic conditions that make bringing capital back home attractive. Naturally, after agreeing that America wants manufacturing to come home, candidates from different parties have dramatically different ideas about what those policies would look like.<\/span><\/p>\n

While\u00a0a growing number of companies are returning to the United States to do their manufacturing, the trend is smaller and less significant to the economy than it appears. The number of companies bringing operations home is actually quite modest.<\/span><\/p>\n

Manufacturing jobs coming home are still exceeded by jobs heading overseas. <\/span><\/p>\n

Certain industries have been especially enthusiastic about bringing their factories home, leading to big predictions about a broad-based reshoring \u201cmovement\u201d that has yet to begin. One notable example is the apparel\u00a0industry. Brooks Brothers, which has increased hiring at new and upgraded factories in the U.S. over the past decade while steadily increasing sales, is cited as a standout of reshoring. <\/span><\/p>\n

The reasons for the return of apparel manufacturing, and their policy implications, are interesting. Every industry with positive movement on reshoring mentions\u00a0lower energy costs.\u00a0 <\/span>Reshoring companies also routinely cite increased wages in China as a reason American labor has become more competitive, so artificially increasing labor costs with more taxes, more mandatory benefits, and an increased minimum wage would be dangerous.<\/span><\/p>\n

Garment manufacturers additionally describe the importance of remaining flexible in their industry, asserting that domestic factories make it possible to produce smaller product runs and reduce the amount of excess inventory that ends up on clearance racks\u2026\u00a0or\u00a0<\/i>gear up rapidly for high-production runs of popular items, as needed. The short turnaround time from design to manufacture made possible by domestic manufacturing is also highly desirable for the trend-conscious fashion industry.<\/span><\/p>\n

Those virtues might be difficult to sell to industries that don\u2019t place such a high value on flexible manufacturing, but one other appealing aspect of onshore manufacturing mentioned by\u00a0Forbes\u00a0<\/i>is universally intriguing: keeping factories in the U.S. makes it possible for businesses to start smaller. A certain magnitude of sales is needed for the cost benefits of overseas manufacturing to kick in.\u00a0 <\/span>Make small business entrepreneurship easier to increase the demand for small-scale onshore manufacturing. <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Call it \u201creshoring,\u201d or \u201cinsourcing\u201d if you prefer. By any name, a significant movement of manufacturing back to U.S. shores may be exactly what the US economy needs. Factory movement overseas has opened a hole in the American job market … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":22,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[13],"tags":[],"class_list":["post-33828","post","type-post","status-publish","format-standard","hentry","category-finance"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t