‘Made in America’—how important is it?
It’s no secret that American manufacturing has struggled since the late 1990s. We’ve seen massive layoffs and a growing trend to outsource jobs overseas—with some companies moving more than 90% of their manufacturing to countries in Asia or South America. But there is hope on the horizon. Over the past two years, the manufacturing industry has regained some of its former strength and added more than 400,000 jobs here at home.
The White House has turned its focus towards domestic manufacturing. In his State of the Union Address earlier this year, Obama advocated that insourcing would stimulate economic recovery. Companies like Ford, Honda, General Electric, Caterpillar and Intel have already moved plants back to the US, and the current administration encourages other American companies to follow suit.
“To create an economy that is built to last,” Obama announced, “we must ensure that the next generation of products are not only invented here, but manufactured here as well. Right now, companies get tax breaks for moving jobs and profits overseas. Companies that choose to invest in America, they get hit with one of the highest tax rates in the world. Does that make any sense? It’s time to stop rewarding businesses that ship jobs overseas.”
To encourage insourcing, the Obama administration proposed tax incentives for companies that return jobs to American workers. The White House also introduced the National Network for Manufacturing Innovation, intended to accelerate innovation by investing in manufacturing technologies. By bringing together industry, educators, and federal and state agencies, the network aims to
- Bridge the gap between basic research and product development
- Provide shared assets to help manufacturers access cutting-edge capabilities and equipment
- Educate and train students and workers in advanced manufacturing skills
With a united effort to reshore, it looks like the tides will turn for American manufacturing. Based on a recent survey, economists predict that one third of American companies worth $1 billion or more will bring back manufacturing plants that moved overseas during the past two decades. The outsourcing trend may be losing steam as our technology improves and domestic manufacturing becomes a more viable option.
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