mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
US Manufacturing Rebounds (But Without the Jobs)


In the first half of 2012, US manufacturing posted some of the best numbers we’ve seen in years, suggesting that a broader revival may be underway. Our trade deficit has grown noticeably smaller in the past six months, driven in large part by energy exports, the “reshoring” of factories to America, and the cooling off of China’s manufacturing sector. The WSJ takes a closer look at how American manufacturers have reconfigured themselves to become more competitive:

Like many U.S. manufacturers, Harley since the 2008-09 recession has revamped its operations to create a smaller and more flexible workforce, resulting in annual cost savings of more than $300 million and making the company more competitive. Among the changes: The union at its plant in York, Pa., accepted the use of temporary workers, who can be dismissed without severance pay. The number of job classifications at York also fell to five from 62, so workers have a wider variety of skills and can go where needed. As restrictive working rules were eliminated, a 136-page labor contract was replaced by a 58-page document.

The shift is modest, but it has some analysts predicting that a broader revival could be on the way. They point to the fact that America has become “one of the lowest-cost countries for manufacturing in the developed world,” and predict that a manufacturing renaissance could lower the unemployment rate by a few percentage points.

This may be going to far, but it is indisputably right that US is becoming a more attractive place to manufacture: Labor costs in China are rising, the US labor force is becoming more competitive, and the energy sector is booming.

None of this, however, means that a large-scale manufacturing employment boom is in the offing. Factories may well re-open, but they will rely far more on automation and will require far fewer workers than the plants of recent years, much less the mid-20th century. That era is never coming back, no matter how many new factories we build.

[Assembly line worker image courtesy of Shutterstock]

Features Icon
show comments
© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service