American companies are deciding to keep factories and production facilities in the United States and even bring jobs back to the U.S. from overseas after decades of “outsourcing” jobs to other countries, resulting in a growing trend of “insourcing,” according to the story ‘Everything You Need to Know About Insourcing’ on The White House Blog.
Evidence of this insourcing trend can be found in the January 2012 White House report ‘Investing in America: Building an Economy That Lasts’ containing the following statistics:
- The private sector added 3.2 million jobs over the past 22 months.
- Nearly 2 million private sector jobs were added in 2011, more than in any year since 2005.
- Real business fixed investment grew by 18 percent since the end of 2009.
- As of October 2011, American exports of goods and services over the past 12 months totaled over $2 trillion, a 31.6 percent increase over the level in 2009.
- The economy has added 334,000 manufacturing jobs over the past two years, the strongest two‐year period of manufacturing job growth since the late 1990s.
Concrete examples of U.S. companies insourcing jobs include the following:
- Large manufacturers such as Ford and Caterpillar have announced large investments in U.S. facilities in recent months when these expansions used to be aimed at facilities in Mexico, China, or Japan in years past.
- The footwear designer KEEN opened a 15,000-square-foot facility in Portland, Oregon, moving production from China to a location just five miles from its corporate headquarters.
- Master Lock is bringing production back to Milwaukee, the city where the company was founded in 1921, after costs rose in its Chinese factories.
- Service firms ranging from customer support centers to software developers to engineers are deciding to invest in the U.S. for their operations.
As for some of the causes of insourcing, the White House Blog gives the following statistics:
- The cost of manufacturing in the U.S. is improving in relation to other countries.
- While labor costs are lower in places like China, costs in those countries are going up in many cases.
- The historically productive American workers are becoming even more efficient, as productivity rose nearly 13 percent in the first quarter of 2009 alone.
- Between 2002 and 2010, only one of 19 other industrialized countries managed to improve its unit labor cost position in manufacturing more than the United States.
To help support insourcing, the White House provides a fact sheet ‘Administration Support For Insourcing and Increasing Investment in the United States’ that encourages American companies to insource:
Increasingly, businesses are making the decision to ‘insource’ production back to and expand operations within the United States. While the talent and hard work of America’s entrepreneurs, innovators, and workers will continue to be the main drivers of these encouraging trends, there is a critical role for government policies that support new investments. The Obama Administration is working to encourage this trend by taking measures – through tax, trade, financing, energy, and education policy – that allow American businesses to thrive.
The fact sheet ‘Administration Support For Insourcing and Increasing Investment in the United States’ is available at: http://www.whitehouse.gov/sites/default/files/1_10_2012_fact_sheet_on_past_support_for_insourcing_final_2.pdf.
The January 2012 White House report ‘Investing in America: Building an Economy That Lasts’ is available at:
The White House Blog ‘Everything You Need to Know About Insourcing’ is available at:
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