The Myth of Jobs Returning From China

President-elect Trump and fellow travelers are beating the drum to take American jobs back from China. Unbeknownst to them, some CEOs already are doing that. But the jobs that are coming back are different from the ones that left, according to my research on the subject.

There are two related patterns. One is that if 10 American jobs moved to China, a company might hire 12 or 15 Chinese to do the same work because Chinese workers tend not to be as multi-functional as their American counterparts. And for a long time, they were cheaper. It made sense. But now wages in China have soared and the Chinese are consciously trying to shed the lowest level of jobs to places such as Cambodia and Bangladesh. As a result, American CEOs are recalculating their costs of operating in China and deciding to bring some production back home.

Problem is, when they do relocate manufacturing back to the States, it is highly automated. The same work that used to require 10 workers now requires three more highly trained workers, who can operate computerized equipment. The Reshoring Initiative is a good source of insight into this phenomenon.

The second pattern is when CEOs bring some forms of manufacturing back, they often have great difficulty in finding workers with the right skills sets. We have allowed our educational system to atrophy when it comes to manufacturing. They don’t teach shop in high schools the way they used to. So some CEOs who have brought jobs back are having to scramble to train or retrain workers. U.S. vocational schools and community colleges are trying to fill the gap but they have a long way to go.

So the idea that American CEOs can be intimidated into bringing jobs back from China, and providing the same jobs that left the country in the first place, is simply not realistic. The millions of underemployed or unemployed former industrial workers in the United States are never going to get those jobs back because they are gone forever, thanks to the forces of globalization and technology. A mere high school education is no longer enough to guarantee that a worker can keep a traditional production job for life. The rules of the global economy have forever changed the way work is done in America. The honest thing to do would be to tell these Americans the truth, rather than having them believe that if they just hold on long enough, the jobs that disappeared are going to magically reappear.


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