Manufacturing work might actually be coming back to America.
More than one-third of executives at big manufacturing firms say they're either considering moving production into the U.S. from China, or that they're already planning to do it, according to a recent poll from the Boston Consulting Group. The poll specifically addresses executives at U.S.-based manufacturing companies with annual sales of $1 billion or more.
While more multinational companies may be bringing jobs back home, it doesn't begin to make up for the manufacturing jobs lost during the recession, according to reports released last month. The manufacturing sector lost 16.3 percent of its jobs between 2007 and 2009, according to the Information Technology and Innovation Foundation, and only 1.4 percent of those jobs have come back since.
Still, the phenomenon of companies moving operations into the U.S. from abroad is one that carries mixed implications for American workers.
On the one hand, it's hard to complain about domestic job creation, particularly at a time when more than 12 million people are still unemployed and some of America's biggest companies are expanding their overseas workforces much faster than the ones at home.
On the other hand, ever since the economic downturn hit, many companies have moved work into the U.S. from elsewhere largely because the weak labor market means employers can get away with not raising American workers' wages very much. Indeed, wages have essentially stopped rising for many Americans, and in some sectors, like manufacturing, U.S. labor has become so cheap that multinational employers can use it as a bargaining chip to argue down worker pay elsewhere.
The BCG report notes that among the executives polled, 57 percent cited labor costs as a reason they would move production into America from China.
But the decision to create jobs at home might not only be based on the increased availability of cheap U.S. workers. Labor in China is also getting more expensive. More than 90 percent of the executives polled said they expect wages in China to continue to rise. While the Chinese manufacturing boom was fueled in part by low wages, the Chinese government has reportedly started pushing for better pay for workers in recent years, in part to encourage consumer spending in that country, according to the Wall Street Journal.
Meanwhile, in some parts of the U.S., local governments are trying to set the stage for a manufacturing revival. Several states are adopting new tax and energy policies to render themselves more attractive to manufacturing companies, according to CNN.