How Wages, Taxes, and American Value are Reshoring…

How Wages, Taxes, and American Value are Reshoring…

Aug 24, 2017

“How Wages, Taxes, and American Value are Reshoring US Manufacturing Jobs” By Paul Carlson, CliftonLarsonAllen The flow of American manufacturing jobs overseas has peaked and is now reversing as U.S. companies find more than just economic reasons to bring them back home. Over the past few decades, the United States has lost as many as 4 million manufacturing jobs to foreign nations as companies look for ways to reduce costs. But the overseas manufacturing landscape is changing significantly. The emerging market wage difference that existed when the decision was made to offshore manufacturing is now dwindling, and in the past few years the costs of production have been increasing. This, in turn, has led to a growing number of companies reshoring — bringing manufacturing back to the United States. Catch the reshoring wave According to the 2016 Reshoring Report from the Reshoring Initiative — an organization working to return manufacturing jobs to the United States — more jobs are returning to the United States than are going abroad. “We publish this data annually to show companies that their peers are successfully reshoring and that they should reevaluate their sourcing and siting decisions,” says Harry Moser, founder and president of the Reshoring Initiative, in a May 15, 2017, statement. “With 3 to 4 million manufacturing jobs still offshore, as measured by our $500 billion annual trade deficit, there is potential for much more growth.” The report found that 77,000 new reshoring and foreign direct investment (FDI) manufacturing jobs were created in 2016. This is a 500 percent increase from the low of 2000 – 2003, when only 12,000 jobs were created on average annually. Overall, it is estimated that a net 25,000 new jobs were created in 2016. Jobs are returning from Asia Most of the jobs being reshored are from Asian countries, where 138,450 jobs have already been brought back to the United States. Of those jobs, most came from China. During the 2010 to 2016 timeframe, China accounted for approximately 60 percent of all manufacturing jobs created by reshoring and FDI. One of the biggest reasons for this trend is the shrinking wage benefit in China. Since 2001, the hourly Chinese manufacturing has risen by approximately 12 percent a year on...

Manufacturing jobs opening in US, are workers qualified?

Manufacturing jobs opening in US, are workers qualified?

Aug 16, 2017

By The Associated Press Fox Business As Wisconsin state legislators prepare to vote on Gov. Scott Walker’s (R-Wis.) $13 billion incentives package for Taiwanese manufacturing giant Foxconn’s first U.S. manufacturing plant this week, the state immediately needs to address a dilemma troubling workers and employers across the country: the skills gap. The Foxconn plant is expected to bring as many as 13,000 direct jobs to Wisconsin, according to Walker, with starting salaries of $53,000 plus benefits. The Foxconn plant could also potentially create 22,000 indirect positions within Wisconsin. It would be a substantial gain for a state that currently has 472,000 manufacturing jobs and is still recovering from factory layoffs. Walker said he has already begun discussions with colleges about training opportunities to prepare graduates for work at the plant. But the need for high-skilled employees at the new manufacturing plant highlights the paradox of manufacturing jobs in 2017. Donald Trump won the presidency in great measure because he pledged to stop American jobs and manufacturing from going overseas, winning Rust Belt votes from blue-collar voters. It’s true that many jobs have gone overseas, to lower-wage workers. But at the same time, American manufacturers have actually added nearly a million jobs in the past seven years. Labor statistics show nearly 390,000 such jobs open. The problem? Many of these are not the same jobs that for decades sustained the working class. More and more factory jobs now demand education, technical know-how or specialized skills. And many of the workers set adrift from low-tech factories lack such qualifications. Factories will need to fill 2 million jobs over the next decade, according to a forecast by Deloitte Consulting and the American Manufacturing Institute. Workers are needed to run, operate and troubleshoot computer-directed machinery, including robots, and to maintain complex websites Last year, software developer was the second-most-common job advertised by manufacturing companies, behind only sales, according to data provided by Burning Glass Technologies, a company that analyzes labor market data. Yet the United States for now remains a follower, not a leader, of the trend. Workers in many European and Asian countries are more likely to be working with robots than U.S. workers, studies show. In such...

The Reshoring Challenge: Why and How CEOs are Moving…

The Reshoring Challenge: Why and How CEOs are Moving…

Aug 9, 2017

“The Reshoring Challenge: Why and How CEOs are Moving Jobs Back to America” By William J. Holstein, Chief Executive For his reshoring initiative, Rongione paid to move unique knitting equipment from China to Pennsylvania in part by using a YouTube video of Jackson to appeal to investors on Kickstarter, the crowdsourcing website. Bollman, which says it is America’s oldest hat company, with more than $10 million in annual sales, bought the Kangol brand in 2001 from a British company. That company had previously sent all of its custom-made machines dating back to the 1930s and 1940s to southern China, where it made the beret-like Kangol hats. So Bollman, in effect, inherited a factory in China, containing the special machines that performed at much lower costs than any new machine might. Bollman struggled to manage the factory profitably and ultimately sold it to a Chinese hat maker, but that arrangement fell apart and the idea to simply move the equipment to central Pennsylvania was born. Rongione set aside some of the employee-owned company’s funds, raised some from the state of Pennsylvania and then launched the Kickstarter campaign. Jackson, wearing a t-shirt that reads “Motherfunder,” a slight variation of a word he’s known for uttering on screen, appealed to viewers to support the move. They did, ponying up more than $100,000. The company recently moved 10 of the knitting machines, is preparing to move dozens more, and is hiring workers at a starting hourly wage of $10.30 an hour. But it is finding that its workers, both new and old, have a big learning curve ahead of them in absorbing how to master the knitting process, which is new to the company. “Hiring people with the specific knowledge has been virtually impossible,” Rongione says. “No one has the knowledge on this type of equipment.” So the company has brought in experts from Britain who are familiar with the equipment and worked with a local community college in Reading, Pennsylvania, to train students to become apprentices. The final outcome remains uncertain. “We still have a mountain to climb,” Rongione says. HOMEWARD BOUND More American CEOs are, in fact, deciding to bring home jobs from China and elsewhere....

Manufacturing Adds 16,000 Jobs in July

Manufacturing Adds 16,000 Jobs in July

Aug 7, 2017

By Bill Koenig, Advanced Manufacturing US manufacturing added 16,000 jobs last month, with makers of durable goods doing the heavy lifting. The durable goods sector added 13,000 jobs while makers of non-durable goods boosted employment by 3000, according to a breakdown by industry issued today by the US Bureau of Labor Statistics. Notable job gainers included fabricated metal products (up 5000 jobs), transportation equipment (3800) and machinery (2100). Within transportation equipment, motorized vehicles and parts added 1600 jobs. That sector had lost 1300 jobs in June. The auto industry is seeing US sales soften following a record 2016 with 17.55 million deliveries of cars and light trucks. US light vehicle sales fell 7% in July and are down 2.9% for the first seven months of 2017, according to Autodata Corp. Automakers are also coping with plunging demand for cars. Those deliveries slid 14% in July and are down 12% for the first seven months. Widespread Gains Most durable goods categories had at least small employment gains. The few job losers included furniture (down 1600 jobs) and miscellaneous manufacturing (down 200). Manufacturing jobs totaled 12.425 million on a seasonally adjusted basis last month. That’s up from an adjusted 12.409 million in June. The July figure also was an improvement from 12.359 million manufacturing jobs in July 2016. Total non-farm employment increased by 209,000 jobs last month, the bureau said in a statement. That was better than the 183,000 gain forecast by economists polled by Reuters. The US unemployment rate edged down to 4.3% from 4.4% in June. Manufacturing jobs peaked in June 1979 (19.6 million on a seasonally adjusted basis, 19.7 million unadjusted). That sank to a low of 11.45 million adjusted and 11.34 million unadjusted in February 2010 following a severe recession caused by the 2008 financial crisis. Since that low, new manufacturing jobs have been created requiring increased skills because of more automation and technology in...

Survey Suggests More Growth Ahead For Midwest Economy

Survey Suggests More Growth Ahead For Midwest Economy

Aug 1, 2017

By The Associated Press A monthly survey of business leaders suggests that business conditions worsened last month but that the economy will pick up over the next few months in nine Midwestern and Plains states, according to a report issued Tuesday. The Mid-America Business Conditions Index dropped to 56.1 in July after reaching 62.3 in June. The May figure was 55.5. “The overall index over the past several months indicates a healthy regional manufacturing economy, and points to solid growth for both manufacturing and nonmanufacturing for the second half of 2017,” said Creighton University economist Ernie Goss, who oversees the survey. The survey results are compiled into a collection of indexes ranging from zero to 100. Survey organizers say any score above 50 suggests growth in that factor, while a score below that suggests decline. The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota. Economic optimism remained strong despite a decline in July’s number: to 60.2 from 67.5 in June. “Strong profit growth, still-low interest rates, and international sales boosted the economic outlook among supply managers in the nine-state region,” Goss said. The July employment index remained above growth neutral, despite slipping to 56.5 last month from 60.7 in June. “With the recent boost in employment growth, total regional employment growth (year over year) is now 1.4 percent, and slightly below the nation’s 1.6 percent gain over the same time period,” he said. On the trade front, the regional index for new export orders index dipped to 54.3 in July from 56.6 in June, and the import index declined to 50.0 from June’s 56.7. Japan’s recent decision to raise the tariff on frozen beef imports will significantly harm Kansas and Nebraska, according to Goss, because Nebraska ranked No. 1 and Kansas No. 4 in those...