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Bringing It All Back Home:

Reshoring US Manufacturing

Presented byParker Bedsole

Associate Economist

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Its Alright, Ma (Im Only Bleeding) Jobs

At the start of the 80s, about one American worker in five had a job in themanufacturing sector. Now its about one in 10. The Atlantic , December 2012

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Chinese Imports

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Its All Over Now, Baby Blue Collared Work

One Million Jobs Lost

TD Economics, October 15, 2012

Estimates that 1 million of the 5.3 million lost manufacturing jobssince 2000 were due to offshoring practices Methodology based on net trade flow impacts; jobs supported by

exports to China positive, while jobs lost to imports negative December 2000 net offshoring had destroyed about 507,000 US

jobs Between 2001 and mid-2012 offshoring had a negative impact of

1.16 million jobs, while exports to China supported 123,000 jobs

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The Trend Slows

Note: Official stats do not account forlayoffs eliminating less than 50 jobs, orindirect or secondary offshoring effects

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Why?

By around 2015, the total labor -cost savings of manufacturing manygoods in China will be only about 10 to 15 percent when actual laborcontent is factored in.

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On the Road Again

The Cost of DistanceConcepts in New Economic Geography

Trade flows, effective distance, and gravity Industrial and labor clustering

Direct costs through transportation costs Indirect costs through loss in productivity

Commodity Access

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Are we at the Gates of Eden?

The offshoring of manufacturing is now rapidly moving towards equilibrium- Michael Janssen, Hackett Group

TD finds that net-offshoring activity has slowed to about 100,000 jobs lost peryear, roughly 56,000 jobs per year less than period 2004-2007

Some industries gain, computers, while others lose, apparel Industry breakouts used to simulate the macroeconomic impacts of these jobs per region

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Its a Regional Issue

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Simulation Estimated effects of net-onshoring of

186,000 jobs, from about 56,000manufacturing jobs in single year

Effects strongest on Pacific coast Contributes $21 billion to US economy

Over $12 billion to personal income $8.4 billion to personal consumption

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Simulation

The darker, the greater the effect

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BCG Report

Manufacturing renaissance extends beyond onshoring development

Reports highlights seven tipping point industries worth almost $2 trillion inUS consumption

These industries represent almost $200 billion in Chinese imports Transportation goods, computers and electronics, fabricated metals,

machinery, plastics and rubbers, appliances and electrical equipment,furniture

Conclude that jobs from Chinese imports could add 200,000 to 600,000 jobswhile the general manufacturing export recovery adds 400,000 jobs

Total effect on jobs in coming decade: 2 million to 3 million; 1.5 to 2percentage points off unemployment rate

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Bob Dylans [115 th ] Dream?

The resurgence of manufacturing as we know it?

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Reports Cited Reshoring Manufacturing: Coming Home, The Economist , January 19 th , 2013 Offshoring, Onshoring , and the Rebirth of American Manufacturing, TD

Economics, October 12, 2012 Made in American, Again: US Manufacturing Nears Tipping Point, Which

Industries, Why, and How?, Boston Consulting Group, March 2012

Mr. China Comes to America, The Atlantic , December 2012

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