OUT: Outsourcing. IN: Insourcing.

Posted by spaul on 01/11/2012

"Insourcing." That’s at the top of my trending list for 2012. But, how do we make reshoring—bringing jobs back from overseas—real? For America to have a thriving economy and lower unemployment, we need to create more good-paying jobs. And to do that, we’ll have to win back some of the jobs that have been shipped overseas for the past decade.

President Obama, to his great credit, gathered about a dozen businesses and many more experts at the White House to strategize on how to bring manufacturing jobs back to America. Within the past year, major consulting firms have published a litany of reports urging businesses to take a look at reshoring. This week, the White House issued its own report.

There is no doubt that some progress has been made. American manufacturing jobs have grown over the past two years—the first time that’s happened in more than 15 years. Our nation gained 23,000 manufacturing jobs in December alone. Other manufacturing indicators—sales outlook, growth in output—have also been in consistently positive territory. The Center for Automotive Research predicts that the auto industry and its suppliers alone could add 167,000 American jobs over the next three years.

Here are five things the President should highlight in the State of the Union address to ensure that the significant trickle of reshored jobs becomes a genuine trend:

  1. Adopt insourcing tax incentives, such as extending a domestic manufacturing tax credit for clean energy and enlarging a deduction for US manufacturing activity. Also, improve the research and development tax credit by making it more generous for innovation that is actually commercialized in America. Finally, adopt a federal tax incentive for companies that reshore high-paying jobs.
  2. Work to balance our trade account by continuing aggressive trade enforcement, where a major hat tip should be given to the Obama Administration for its support of domestic industries. But, the Administration must also work to stop China’s currency manipulation and lower our record trade deficit with that nation.
  3. Invest in infrastructure to make our economy more efficient, our businesses more competitive, and to create some demand for manufactured materials.
  4. Apply Buy America laws to make sure that our manufacturers get a reasonable preference for federal procurement on everything from commemorative wristbands to major bridge reconstruction. The Department of Transportation does a good job of applying the Buy America laws on the books, but other agencies need to step up, and loopholes need to be closed.
  5. Invest in our workers to ensure we have skilled human capital on the factory floor, in the research lab, and in the executive suite. Our educational system is built towards guiding every child into a four year college and every MBA onto Wall Street. That shouldn’t be the case. We must rebuild our vocational education system from the ground up, or we will never make manufacturing great again.

There are also factors beyond our control that can help—or hurt—these efforts to reshore jobs: namely, the value of the dollar, shipping costs, and consumer preferences. But, if you think we can’t be a manufacturing powerhouse as a high-wage nation, then think again. Germany, where average manufacturing wages are in some cases double that of American wages, has balanced trade with China (we have an annual $272 billion deficit) and over 20 percent of its economy in manufacturing (we have 11 percent).

It’s clear from the job numbers, as well as voter sentiment, that Made in America is starting to make its way back. But we want reshoring to be more than a slogan—we want it to be our national policy.

**This editorial was cross-posted on The Hill, Huffington Post, IndustryWeek, and Daily Kos.

1 comment

Our Government has to Start Protecting American Jobs

We need to bring manufacturing back to the United States of America!

Most US Citizens are not as concerned about the “Global Economy" as they are about being able to earn a living, their children’s future and the future of our country.

The “Global Market Place” is not a level playing field! We should provide tax incentives and if necessary even partial subsidies to companies that manufacture products here in the USA with US Citizens. We need to add tariffs that are proportionate to the inequities in wages and regulations in the country where the goods were produced and or where we’re importing them from. We could then use the money raised by these tariffs to help companies build state of the art manufacturing plants here in the USA, which would create more jobs here at home for US citizens, which would then in turn increase our income tax revenue. We also need to bring customer support services back to the United States of America and staff them with employees that are US Citizens. Both political parties sold out the American people by letting Wall Street, Corp Board of Directors and CEOs open the floodgates. There’s nothing wrong with making a profit and people in these other countries deserve to earn a higher standard of living, but our leaders can’t allow it to happen at the expense of the American people, who they’re supposed to represent. Both the Democrats and Republicans have to stop just arguing along party lines and actually get things done that are in the best interests of the United States of America and all US Citizens, including the majority of our citizens.

We have to stop letting Corp Boards, Wall Street and CEOs promote sending US jobs to countries where they work for slave wages, no benefits, no OSHA safety standards or no real environment regulations. The so-called “Global Market Place” is not a level playing field. Companies may have made higher profits by doing this, but they've been putting middle class Americans who are a good part of the world’s customer base out of work. I’m not a lefty or member of any union. I run a business that employs over 20 people and produces products that are purchased by customers that do manufacturing and packaging. I’m just an average Joe, but I've been saying this for more than 10 years now. If I can see it, so can our so-called leaders (political leaders) who are beholden to the same people who are exporting our jobs. We need a 3rd party that actually does what's best for all Americans (US Citizens) rather than just worrying about their party and winning the next election. Even though I usually vote Republican, I think they put the interests of Wall Street above the interests of the majority of Americans (Middle Class US Citizens).

Again most US Citizens are not as concerned about the “Global Economy" as they are about being able to earn a living, their children’s future and the future of our country.

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We Also Need to Stop Illegal immigration! They’re not just doing jobs that Americans don't want. Do they pay taxes? Don't get me wrong most of these people work very hard, but are a drain on the system if they don't pay taxes, have healthcare coverage, learn the language or get paid wages that are inline with their American counterparts. We all know that the health care provided to uninsured illegals here in the states is being averaged into our hospital costs and our insurance premiums, which have proportionately increased along with illegal immigration over the last 20 years? And who’s footing the bill for the education of their children and the infrastructure around them?

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Regarding Unions: They were necessary at one time in our country, but now they've gone over board and just make us less competitive with the rest of the world.

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(Under Clinton jobs to China, Under Bush I & II influx of illegals or cheap easily abused labor into the US and jobs to Mexico/NAFTA) I voted for Reagan, Reagan, Bush, Perot, Dole, Bush, Bush and McCain
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And now we find out that we have subsidized Chinese companies rebuilding our bridges with tax money that was supposed to stimulate our economy and create jobs for Americans - Are they frigging kidding me! When is it going to stop?

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