Manufacturing in the United States has fluctuated in recent years, as US-based businesses moved labor-intensive manufacturing overseas. These are profit-driven changes to produce low-cost goods for low-income households. Recently, the POTUS has debated the security behind industrial supply chains and wants to "bring factories back" to the United States. Data released by the US Bureau of Economic Analysis (BEA) estimates that by 2024, stock in US direct investment in manufacturing abroad was $1.1 trillion. While China was estimated to run at $200 billion. This is because overseas industrial operations are not included in national accounts and could be the reason why US-based workers felt these consequences more than the US stock markets.
If we try to bring old manufacturing back to the US, it will only hurt the American people. It was a smart move for the US to abandon manufacturing when we did. As technology advanced, the employment per output shrank dramatically. During Germany's run as a top manufacturer, it only saw a rise in unemployment numbers. As higher-value goods were being produced by robots, fewer workers were needed for their skills. Will large American corporations continue production internationally, or will trade tensions bring labor-intensive manufacturing back to the United States? Who will be the most affected by these changes??
https://www.project-syndicate.org/commentary/us-manufacturing-globally-dominant-deindustrialization-a-myth-by-jorge-arbache-and-otaviano-canuto-2025-09
2 comments:
Bringing back manufacturing in the US could improve supply chain security. One downside is that there would likely be less jobs for low skill workers, since factories are so automated. I think the consumers would be affected the most, as prices would rise, since production cost will be higher here than overseas.
It's interesting how the data shows that U.S. firms still dominate manufacturing globally, even though much of it occurs abroad. That makes me think the issue isn't really about bringing jobs back, but about what kinds of jobs exist in the first place. If technology continues to reduce labor demand, then even domestic factories won't create the employment people expect. The bigger question might be how the U.S. adapts its workforce to new kinds of high-value production rather than trying to restore an older model of manufacturing.
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