There has been plenty of talk around bringing manufacturing back to the western world to save jobs. However, commentary for over a decade has been around automation. In China, increased competitiveness has meant that it too has had to automate its factories to compete with even cheaper manufacturers from elsewhere. These aren’t countries just in the Far East like Vietnam but also Mexico where hourly wages are 40% lower than in China. Factories in China that used to be run by 650 employees, now just need 60 to get the job done.
So it is no surprise that the US and other western countries are able to be competitive again thanks to automation. In fact, the US has seen manufacturing double in the past three decades. The problem is that the US lost about 5.6m manufacturing jobs between 2000 and 2010 with 85 per cent of these jobs lost attributable to technological change — largely automation.
Further, the jobs being created are no longer for high school graduates. People need better skills thanks to the increase in technology in the factory.