Five reasons why manufacturing jobs are coming back to stay

Last month after taking a shot at Forbes columnist Tim Worstall for his snarky column, “Manufacturing Isn’t Important But Factory Goods Orders Are Rising — That’s Nice,” I heard back from Worstall in a cordial if combative response.

Among other things, I’d argued that his habit of diminishing manufacturing simply because companies move it offshore undermines the sector by undervaluing it. Worstall wouldn’t have it. He responded, “I am not saying that manufacturing shouldn’t happen. I am saying that it’s entirely unimportant that it happens in the U.S. or not.”

I invited Worstall to Colorado to debate the proposition, as I disagree with his premise and his clarification. But our friendly, in-person spat will have to wait, as Worstall’s ensconced in Portugal.

Perhaps his colleague at Forbes, John Tammy, will accept in his stead. Tammy is also anti-manufacturing, as evidenced by his shortsighted missive published a few weeks later, “When They Promise To Bring Back Manufacturing Jobs, They’re Promising Stagnation.” Tammy chides that manufacturing jobs are a vestige of the Civil War era, when “New York was a city of factories.” He adds, “Lest we forget, it’s where the talented migrate, and the talented disdain low-wage, back-breaking manufacturing work. So have American workers of all stripes left manufacturing employment behind.”

This surprisingly common theme in the business press, that manufacturing and a modern U.S. economy don’t mix, runs headlong into a different reality on the ground. Manufacturing jobs are coming back, reshored or contemplated in the U.S. first, despite the protests.

Here are five reasons why:

1. Consumers want more stuff made here. More than ever, we now care about where products are made, for reasons involving health and wellness, convenience, product quality, social and economic accountability, and other issues.
2. Brands want to make more stuff here. In response to consumers, and for other compelling reasons including cost, access to technology, brand integrity, and social responsibility, the trend in product management is for companies to shorten supply chains in support of domestic manufacturing.
3. Rise of the new tradesman. Today’s high-tech, entrepreneurial, manufacturing sector will continue to get traction with families and undergrads, and a new and viable career path is emerging. Elon Musk and others are providing inspiration by rewriting the rulebook, seeking out a generation of new U.S. tradesman, many armed with advanced degrees. This from Ashlee Vance’s Musk biography, on the hiring process at SpaceX: “Most attention goes toward spotting engineers who have exhibited type A personalities traits . . . who excel at robot-building or haves built unusual vehicles. The object is to find individuals who ooze passion . . . and have real world experience bending metal.” Experience bending metal. How great is that?
4. Domestic manufacturing is now a national security issue. There’s widespread acknowledgment that along with our collective manufacturing acumen, we’ve also offshored technology and advanced processes to places like China, countries that use this knowledge to compete against American companies and employees. We’ll manufacture more products domestically as a result. The move last week by the U.S. to block the Chinese government’s attempt to buy Lattice Semiconductor is a trend, not an isolated incident.
5. The economics of global manufacturing are changing — to the benefit of the U.S. The cost of production is rising sharply in places that today are production destinations for American brands. The purely economic rationale to offshore manufacturing is fading.

The straightforward means to accelerate the trend and establish a new manufacturing labor class is to focus on the domestic supply chain. Companies that want to make more products in the U.S. need more of, well, everything.

Support of the domestic supply chain is a clear litmus test for any trade association, economic development entity, elected official, or academic leader that claims to support manufacturing.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.