Malcolm Rivera
The decline in manufacturing jobs is a global phenomenon, with employment in the sector decreasing annually in industrialized countries. While manufacturing employment has declined in the US, this is not due to jobs moving to countries like China or Mexico, but rather because of automation and digitalization, which have eliminated the need for manual workers. The nature of manufacturing is also changing, with highly automated and flexible production methods requiring fewer blue-collar workers and more skilled employees with STEM knowledge. This shift has led to a skills gap, with manufacturers struggling to fill open positions. Political efforts to bring back manufacturing jobs through tariff policies and investments in US competitiveness have been met with criticism, as they may not succeed in reviving factory jobs and could have negative economic consequences.
| Characteristics | Values |
|---|---|
| Manufacturing jobs in the US | On the upswing |
| Traditional factory jobs | Will not return due to automation and digitalization |
| Manufacturing jobs requiring STEM skills | Will be scarce |
| Manufacturing jobs not requiring STEM skills | Difficult to fill |
| Tariffs | Do not bring manufacturing jobs back to the US |
| US manufacturing spending | Topped $234 billion as of March 2025 |
| Manufacturing jobs lost since 1997 | 5 million |
| Manufacturing jobs lost under the Trump administration | 1,800 factories and nearly 5 million jobs |
| Manufacturing jobs lost since the 2001 entry of China into the WTO | Not stated |
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What You'll Learn
Tariff policies
One criticism is that tariff policies do not address the underlying reasons for the decline of manufacturing in the US. For instance, technological innovations have transformed the nature of manufacturing work, reducing the need for human labour. Additionally, there has been a brain drain towards sectors that offer higher wages and better working conditions, such as the service industry. As a result, there may not be sufficient workers willing to take on these manufacturing jobs, especially considering the physical demands of many manufacturing roles.
The effectiveness of tariff policies is also questioned due to the time lag in reshoring supply chains and manufacturing operations. Building new factories and establishing stable supply chains can take several years, during which businesses may be hesitant to invest due to unpredictable cost structures caused by fluctuating tariff policies. Furthermore, tariff policies implemented by the US in the past have not always resulted in the expected increase in manufacturing jobs. For example, when tariffs were applied to Chinese imports, it led to a shift in manufacturing to countries like Vietnam, which offered lower wages and similar supply chain advantages.
Another concern is the potential impact on wages and unemployment. If manufacturing jobs were to return to the US, companies would likely face increased labour costs, which could lead to lower wages for American workers. Additionally, tariff policies that trigger trade wars may lead to higher consumer prices, slower economic growth, and increased unemployment, as seen in the case of Trump's tariffs.
While tariff policies aim to address the decline of manufacturing in the US, they may not be sufficient or effective in isolation. Other complementary measures, such as targeted investments in education and training to address skill gaps, could be necessary to create an attractive and competitive manufacturing sector in the US.
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Automation and digitalization
While it is technically possible to bring manufacturing jobs back to the US, the reality is that traditional blue-collar factory jobs will not be returning due to the effects of automation and digitalization.
Digital manufacturing is an integrated approach that uses computer systems to improve machines, processes, and productivity. Automation in digital manufacturing refers to the use of advanced technologies such as robotics, artificial intelligence, machine learning, and the Internet of Things (IoT) to enhance efficiency and quality. By automating repetitive and time-consuming tasks, manufacturers can increase production capacity, improve accuracy, reduce labour costs, and improve product quality. Automation can also help manufacturers collect real-time data, allowing them to proactively identify and address potential issues, resulting in better quality control and fewer defects.
Digital transformation in manufacturing involves moving through the automation continuum by replacing analog activities with digital infrastructure and processes. This can help minimize complexity, improve productivity, reduce misprocessing, and lower production costs. However, it is a complex undertaking that requires careful planning and significant initial investments. Manufacturers must also address employee concerns and ensure that their skill sets are utilized and developed in the new digital landscape.
The future of manufacturing in the US will be highly automated and flexible, requiring fewer blue-collar jobs. For example, Adidas's Speed Factory employs slightly over 100 employees, with robots and 3D printing technology making up the bulk of its production force. The requisite skills for the remaining jobs will also change, with shop-floor jobs requiring more skilled workers with STEM knowledge, problem-solving skills, and programming familiarity.
While automation and digitalization bring numerous benefits, they also present challenges. Initial investment costs can be high, and the return on investment may not be immediate. Additionally, the specific contribution of digitalization may be overrated, as simply integrating digital technologies does not automatically imply increased productivity.
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Labour costs
Firstly, it is important to recognise that Chinese labour is not only cheaper but also more efficient and productive. Chinese workers are often characterised as having a strong work ethic, with lower rates of absenteeism and higher levels of discipline compared to their American counterparts. They are also perceived to possess relevant skills that enable them to perform tasks faster and with greater accuracy. This perception is reflected in the following quote:
> "Chinese workers work longer hours more happily and they’re physically faster with their hands; they can do things that American labour can’t. It’s years of accumulated skill, but it’s also a culture that is oriented around hard work and education that the United States no longer has."
Secondly, the availability of labour in the United States is a significant concern. There is a perceived labour shortage in the country, with a mismatch between the skills required for manufacturing jobs and the skills possessed by the American workforce. This skills gap has been attributed, in part, to the decline in unionisation and the changing nature of the American economy, which has seen a shift from manufacturing to service industries. Additionally, there is a general sentiment that Americans are less interested in pursuing manufacturing careers, particularly those that are considered "masculine" and physically demanding. This sentiment is reflected in a poll where only 25% of Americans believed they would be better off working in a factory.
To address the labour shortage, some have suggested increasing wages to attract workers to the manufacturing sector. However, this could lead to increased production costs for companies, making it challenging to remain competitive, especially in the face of global competition. Furthermore, it is argued that even with higher wages, Americans may not be willing to perform the menial and repetitive tasks associated with manufacturing jobs.
Finally, it is worth noting that labour costs are not the only factor influencing the competitiveness of American manufacturing. Automation has been proposed as a potential solution to labour-related challenges. However, China already installs significantly more industrial robots than the United States and has access to cheaper robotic technology. Therefore, automation alone may not be sufficient to level the playing field.
In conclusion, while labour costs are a critical factor in the discussion of bringing manufacturing jobs back to the United States, the issue extends beyond wage rates. Addressing the labour-related challenges in the American manufacturing sector will require a multifaceted approach that considers cultural attitudes towards work, skill development, automation, and global competitiveness.
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Education and skills
The manufacturing industry in the US is facing a labour shortage, with nearly half a million open jobs. However, the nature of manufacturing jobs is changing. Traditional blue-collar jobs are disappearing due to automation and digitalization, and new jobs require workers with different skills.
Manufacturing jobs of the future will require workers to be comfortable in highly automated environments. There will be a continued need for human workers in manufacturing, but these workers will need to have significantly more STEM skills and aptitude. Jobs on the shop floor will require workers with science, technology, engineering, and math (STEM) knowledge, problem-solving skills, and programming familiarity.
The government can help reduce the shortage of skilled labour by increasing support for apprenticeship programs and initiatives for digital manufacturing education. Companies can also play a role by instituting internal training and retraining programs to teach workers the skills they need.
The Manufacturing Institute has been working to develop better apprenticeship programs to help Americans build the skills needed in the manufacturing sector. For example, the Federation for Advanced Manufacturing Education (FAME) was founded by Toyota in 2010 to address the shortage of machine technicians at their manufacturing plant in Georgetown, Kentucky. They partnered with local companies and a community college to develop an apprenticeship program to create the workforce they needed.
Additionally, reforming high school education to offer more vocational skills and investing in community college programs can help equip Americans with the skills needed to be productive in manufacturing.
While manufacturing jobs may provide higher wages than some other sectors, the quality of these jobs has changed. There is no guarantee that manufacturing jobs will pay significantly more or offer better benefits, and they may require mandatory overtime.
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Political appeal
The political appeal of bringing manufacturing jobs back to the US is clear. Manufacturing jobs have historically provided good jobs and career ladders for people without a college education. However, this is no longer the case, as many manufacturing jobs now require STEM knowledge, problem-solving skills, and programming familiarity.
The push for increased American manufacturing has come from both sides of the political spectrum. For some, the motivation is national security. For example, the CHIPS Act, passed under President Biden with bipartisan support, created incentives to bring back semiconductor manufacturing to the US. Others, such as former President Trump, have focused on "bringing high value-added manufacturing jobs back" and developing an "entire ecosystem" around factories, including supporting services and businesses.
However, it is important to note that the Trump administration often issued press releases citing plans for major foreign investments in the US that never materialized. For example, in 2017, Foxconn announced plans to invest $10 billion and bring "thousands of new American jobs" to Wisconsin and elsewhere in the US, but as of April 2020, their buildings in Wisconsin were still empty.
The US has suffered a net loss of more than 91,000 manufacturing plants and nearly 5 million manufacturing jobs since 1997, with nearly 1,800 factories disappearing during the Trump administration between 2016 and 2018. Despite this, the reality is that US manufacturing is much more robust and in better shape than public discussion would suggest.
One of the main challenges in bringing manufacturing jobs back to the US is the comparative inefficiency and higher cost of labor in the US compared to countries like China and Vietnam. Additionally, the traditional blue-collar assembly-line jobs are not coming back, not because they have moved to other countries, but because of the effects of automation and digitalization, which have eliminated the need for many manual workers.
To bring manufacturing jobs back to the US, leaders may need to refocus their education systems to help Americans acquire the skills that manufacturers need. Apprenticeship programs and partnerships between manufacturers, community colleges, and local businesses can help build the talent pipelines necessary for a productive and capable workforce.
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Frequently asked questions
It is possible to bring manufacturing jobs back, but it is important to note that the nature of these jobs will be different from traditional factory jobs due to automation and digitalization. The jobs that will come back will be highly automated and require workers with STEM knowledge and problem-solving skills.
There are several challenges to bringing back manufacturing jobs. Firstly, the effective cost of labor in the United States is higher than in countries like China and Vietnam, where labor is not only cheaper but also more efficient and productive. Secondly, there is a skills gap in the United States, with many manufacturing jobs requiring a combination of technical knowledge and skills that the current workforce may lack. Additionally, tariff policies designed to bring back manufacturing jobs may not always have the intended effect, as seen in the past.
Addressing the challenges of bringing back manufacturing jobs requires a multifaceted approach. On the one hand, investments in STEM education and workforce development programs can help equip Americans with the skills needed for modern manufacturing jobs. On the other hand, policy interventions like the CHIPS and Science Act aim to strengthen American competitiveness and bring back domestic manufacturing jobs by investing in research, development, and production in critical areas like semiconductors.
Bringing back manufacturing jobs can have both positive and negative impacts. On the positive side, it can provide good-paying jobs for Americans, especially those without a college education. It can also strengthen the country's industrial base and competitiveness in the global market. However, there are potential negative consequences as well. For example, tariff policies may lead to increased consumer prices, slowed economic growth, and a negative impact on America's global economic leadership. Additionally, the type of manufacturing jobs returning may be limited due to automation, and they may not provide the same career ladders as traditional factory jobs.
