Will Manufacturing Jobs Return to the United States?

This has become a big question in recent years and the center of much political debate, but the question remains largely unanswered. According to the current employment statistics survey conducted by the Bureau of Labor Statistics, there has been an increase in manufacturing jobs in the U.S. over the past few years. However, January 2019 saw little job growth in the manufacturing sector. In January 2019, 13,000 jobs were created, in contrast to 16,000 in January 2018.

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Manufacturing Incentives in the USA

Many areas are creating incentives to try to get corporations to open their manufacturing plants in the U.S. instead of taking them overseas. These incentives are usually in the form of tax credits and breaks, though they can sometimes include things like land and helping with the infrastructure.

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Incentives for Manufacturing Overseas

Many people say they manufacture overseas because they can keep their production costs lower without having to sacrifice quality. However, more often than not, the costs of the materials are about the same price overseas as they would be in the U.S. What makes the manufacturing costs cheaper overseas is the amount they have to pay for labor; the wages overseas can be significantly cheaper than they are in the U.S. If you plan to mass produce, that is where you will see a major difference in the prices.

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Top Manufacturing Countries

The Brookings Manufacturing Scorecard compared the manufacturing environment in the United States to 19 other countries and ranked them based on:

7 RANKING FACTORS

  • Policies and Regulations
  • Tax Policy
  • Energy
  • Transportation
  • Health Costs
  • Workforce Quality
  • Infrastructure
  • Innovation

The survey also compared information on manufacturing output, manufacturing employment, and changes overtime. They found China to be the top nation for manufacturing output; the U.S. came in second in that category, Japan came in third. Twenty-seven percent of China’s overall national output is manufacturing and it accounts for 20 percent of the manufacturing output in the world. Twelve percent of the United States’ total output is due to manufacturing which equates to 10 percent of the overall global output. Japan’s manufacturing output is 19 percent and its contribution to the world output is 10 percent. China, the United States and Japan together account for 48 percent of the manufacturing output in the entire world.

Top Manufacturing Countries

Conclusion

With the U.S. being in the top five countries to have a factory in, along with the potential tax breaks and incentive packages, right now is a good time to be in the manufacturing industry in the United States. While the tax breaks can be a good incentive for manufacturing overseas, the incentive packages many states and the federal government offer can offer a greater incentive to remain domestic and grow a manufacturing business in America.

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