It's no secret that America has lost a passel of manufacturing jobs over the past half decade. President Obama has made reversing this trend a national goal. We won't discuss any opinions on whether his administration's anti-big-business attitude has helped or hurt the situation. Let's just agree that it's everyone's patriotic duty to develop U.S.-based jobs just as fast as we can.
A lot has been said about whether the trend toward increased automation of manufacturing processes is a net creator or eliminator of manufacturing jobs. On the surface, it would seem a net eliminator by increasing worker productivity—fewer workers need be employed to manufacture the same quantity of goods—but there are subtle arguments to the contrary.
One thing is obvious, though. Anything that causes manufacturing activity to gravitate toward the States can only ameliorate the situation.
Just before I sat down to write this column, Packaging Digest Executive Editor Lisa Pierce sent me a copy of a press release issued by HQ Futurestech Branding and Marketing Ltd. on behalf of Automation GT reporting a trend toward "onshoring" of manufacturing activity.
To quote the release: "Onshoring, the movement of returning outsourced manufacturing back to the U.S., first began with labor issues in China. China's low labor costs once compelled companies to outsource production abroad. Today, wages are five times higher than they were 12 years ago and are estimated to keep continue rising at 18% a year according to a recent article in the Huffington Post. Companies were also prompted to reconsider the benefits of offshoring when Chinese workers began to resist poor labor conditions in the form of strikes and suicides.
"The problem became so serious for Foxconn Technology Group, the largest contract electronics assembler, that they began to automate their operations in China. Operating automation abroad, however, is no more effective than operating automation here in the United States."
My reaction was that, while this trend is important, it's not news. It has been in progress for a long time. I was first made aware of it over cocktails about a decade and a half ago by then president of Fluke Instruments, John Fluke, Jr.
John made an offhand comment about the company repatriating manufacturing activity. I pounced on the comment, wanting more information. He explained that automated processing was easier and more economically efficient here, where there was better access to advance engineering talent than elsewhere. He reported that manufacturing automation had already taken the cost of unskilled labor out of the manufacturing-cost equation. Even at that early date, he claimed, the driving cost was installation and maintenance of automated production equipment, which was lower in the U.S.
While this trend is no news, it is important. It's also important that managers and engineers involved in automation projects be aware of it. It should be a source of pride—or at least satisfaction—that what we do is having a documented positive impact on our national economy.
Way to go, folks!