Re-Shored Manufacturing to the Rescue?

 

Our national debt and spending deficit continues to grow and over 1 Trillion dollars is just interest on the debt.

What could be a genuine game changer in attacking the $38 trillion federal debt is the speed and magnitude of the re-shoring of foreign manufacturing to U.S. states. When looking at potential future revenue streams, aside from raising taxes to offset deficit spending, generating hundreds of thousands of new manufacturing jobs that work in tandem with AI is a viable option that carries large tax revenue implications. Re-shoring began to accelerate in 2022 and is continuing to grow.

The potential numbers look promising. According to the National Association of Manufacturers, for every $1.00 spent in manufacturing, there is a total impact of $2.65 to the overall U.S. economy. In addition, for every one worker in manufacturing, 4.8 workers are added to the overall U.S. economy.  Manufacturing workers in the United States earned $106,691 on average.  Over the next decade, because of organic growth and reshoring efforts, 3.8 million manufacturing jobs will likely be needed, and 1.9 million are expected to be unfilled

America leads the world in innovation, and manufacturers in the United States perform 52.9% of all private-sector R&D in the nation, driving more innovation than any other sector. R&D in the manufacturing sector has risen from $132.5 billion in 2000 to a record $404.8 billion in 2023. In the most recent data, pharmaceuticals  accounted for 36.1% of all manufacturing R&D.

At a time when there is growing concern about AI-related job destruction in several service sectors of the economy, the ramping up of re-shoring and expansion of domestic manufacturing is timely. With retirements rising and digital capabilities growing, manufacturers are going to need to retrain millions of workers.

Based on what we now know about the fragility of global supply chains during the pandemic, it is in our national and economic interest to “Build Baby Build” factories as far as the eye can see.

posted by Rob Taylor, editor