One of the more encouraging developments of the current decade has been a burgeoning manufacturing renaissance in America. There's a wave of job immigration underway. Many of these jobs are returning from overseas, after a decade of flight to cheaper labor offshore, yet many are actually originating here.
According to Bloomberg, this is more of a movement than a trend: more than a third of American manufacturers with revenues larger than $1 billion will return jobs to the United States. Move higher up in the revenue ranks, and the story gets better: almost half of U.S. firms with revenues over $10 billion are planning to do the same. Manufacturing jobs declined from 17.3 million at the start of 2000 to an all-time low of 11.4 million in 2010. That’s when the trend reversed, and manufacturing jobs grew to 12.3 million by mid-2016. This isn’t simply the result of American innovation and the homecoming of lost American jobs. A good many foreign companies are now “offshoring” their own jobs and moving them into the United States.
You thought the textile industry in the U.S. was dead? Think again. The Keer Group, a Chinese textile company opened a cotton mill two years ago in South Carolina. A sister Chinese firm, JN Fibers, Inc., built a plant there as well. Meanwhile, ShriVallabh Pittie Group, from India, is building a textile factory in Georgia. And Tianyuan Garments Co. is setting up shop in Little Rock, Arkansas.
Why? Wages have increased in the developing world. Energy is unreliable. Shipping is becoming prohibitively expensive and time-consuming. The U.S. has become a sensible place to make things—you can build your products only a one- or two-day truck ride from two thirds of the American market. And foreign developers are drawn to states that offer tax credits, infrastructure grants, revenue bonds, assistance with worker training, and—believe it or not—continuous electricity. (Reliable power is not something manufacturers can take for granted in the developing world.)
Plus U.S. workers are now willing to work for less, especially in states that are make it harder to unionize. For better or worse, new hires will work long shifts for lower wages than in the past, and they can multi-task on the plant floor in ways a union would usually prohibit. It’s a perfect storm of conditions favorable to foreign investment in U.S. job growth.
Though all of this raises thorny questions about worker safety, exploitive practices and low wages, it suggests that we might be seeing the dawn of parity for American workers in the global economy. That may have been an essential starting point. With time and effort, these companies will have the opportunity to motivate workers to produce dramatic improvement in productivity and innovation. And then—this is the critical part—they must share incrementally in the value they produce.
One of the brightest spots in this story actually serves as an example of how companies ought to handle their most precious resource—employees. It also shows the way to hire people who may not be entirely qualified on Day One, but can quickly adapt and learn on the job. This is essential because manufacturing jobs require much higher skills than in the past.
South Carolina, as you may have already noticed, is a bellwether for this new manufacturing. It has created new partnerships between government and business to create fast-track training for newly hired manufacturing workers. A German car maker has become its biggest and most publicized partner. Even though BMW uses 1,400 robots to build luxury SUVs, it still needs 10,000 workers to fill in the gaps and make sure the machines are getting the job done properly — that’s total employment following an addition of a 1,000 jobs announced in June.
One can start with BMW even though, strictly speaking, the new hires are unqualified to jump into the job immediately because BMW has a “dual-track” training program. They learn while they earn, working under a certified Apprenticeship, in cooperation with the U.S. Department of Labor.
These jobs have starting salaries of $60,000. It’s a dream come true for both young workers getting into the job market as well as mid-career types who have been displaced or are simply looking for a better future. These recruits go to school and get paid an hourly wage while they’re doing it. It’s been twenty years since BMW located its plant in Spartanburg and, in that time, he has created more than 23,000 American jobs, with a total capital investment of $4.6 billion, as of 2015. Before BMW, Spartanburg had job openings in the military or at Wal-Mart.
Though apprenticeships have been on the decline in the U.S. for many years, this proves that it’s a viable way to build a skilled workforce, at a time when college degrees are more expensive than ever and trade schools haven’t yet caught up with the sort of jobs that require new skills now.
What BMW has done in South Carolina offers a template to address multiple roadblocks to economic growth: inadequate education, the decline of American manufacturing, and income inequality. In all respects it shows how we can revive and grow economic sectors we’ve all but given up on for so many years. The other states in our nation ought to look to South Carolina for some job-growth lessons.
How many categories, beyond automotive, can be identified and attracted to our shores? An aggressive search by private industry, states, and the federal government can produce great paying jobs for countless unemployed, as well as youngsters moving into the job market. Real, solid growth is possible. The limit may be our short-sightedness and dormant entrepreneurial drive. What’s going on today should give us both hope and determination to grow.
