Here’s the best argument I’ve heard for a jobs “re-shoring” drive to the United States

RASHMEE ROSHAN LALL December 2, 2016

america i sing you back 2Here’s the best argument I’ve heard for a jobs “re-shoring” drive to the US

Deloitte’s global manufacturing competitiveness index ranks the US second only to China, according to Justin Fox on Bloomberg View.

What that means in real terms is as follows: companies are going to start bringing jobs back to the US.

Two reasons will guide the decision:

  • If the cost differentials are small (ie. It’s not a huge savings to manufacture in a poor, developing country half-way around the world rather than the US) why bother going overseas? Why bother irritating political leaders, not least so pugnacious an American president as Donald Trump?
  • Considering the greater risks of globe-spanning supply chains, why manufacture elsewhere to supply somewhere? Just keep the whole process together.

All of this comes off the back of President-elect Trump’s triumphalist announcement that he and his Vice President-elect Mike Pence have managed to persuade United Technologies Corp. subsidiary Carrier to keep 1,000 furnace-plant jobs in Indiana rather than going to Mexico.

It may in the end have been more Mr Pence (he being governor of Indiana); it may have been just a few hundred jobs and it may have been a big tax giveaway for Indiana.

But that’s neither here nor there. As Mr Fox points out, the Indiana triumph, if that’s what it can be called, is not the way to keep the US rich, well-served by jobs and with humming factories.

It needs to pursue new industries and new products, not just fight to keep old jobs in place.