There have been a number of news stories recently about manufacturing jobs returning to the United States.
This was the cover story on Time Magazine a few weeks ago. Here’s a link, but it the full article is only available to paid subscribers: U.S. Manufacturing is staging a Comeback
And GE recently announced that it will expand production of appliances in the Appliance Park in Louisville. Here’s a link to the Lane Report article.
These articles note that manufacturing is returning to the US for a number of reasons, but all are based on the economics of production in the US. There are two major reasons for the move. The first is that this allows production to be much closer to product design, which allows the designers to quickly modify the product based on manufacturing experience, and also allows the manufacturers to work more closely with the designers to improve both the manufacturing process and the design of the product. The other major reason for the move is that the increase in shipping costs, particularly for large and heavy products, has greatly reduces the competitive advantage of producing in low wage countries like China.
This is extraordinarily good news for the American economy and for American workers. But one point that bears mentioning is that this seems to throw cold water on the idea often offered by conservative politicians that manufacturing left the US because of overly burdensome regulations. If anything, according to conservatives, regulation during the Obama years has only increased. [This is not really true, but is not the point of this post.] Despite this, manufacturing is returning to the US. If conservatives were right and production left because of burdensome regulation, how is it returning now, when regulation has only increased? Could it be that they were wrong?
It is worth noting that none of these articles mentioned the regulatory burden as a reason for leaving, or a reason for returning.
