CRAWFORD: Reshoring output requires STEM input

by Ross Reily

Published: May 10,2013

Tags: Bill Crawford, finance, Mississippi, Mississippi Business Journal, taxes

Reshoring is the catchy name used to describe efforts to bring manufacturing jobs back to America. It includes the return of jobs “off-shored” or “out-sourced” by U.S. companies as well as jobs brought to America by direct foreign investment.

While General Electric, Caterpillar and Ford have brought jobs back to the U.S., we see more direct foreign investment jobs. The just announced Japanese Yokohama Tire project in West Point joins Russian Severstal, Israeli Stark Aerospace and European Eurocopter as examples in East Mississippi, Toyota in Northeast Mississippi, European Airbus and German ThyssenKrupp near Mobile, and Chinese Golden Dragon near Thomasville, Ala.

Why are these manufacturing jobs coming to or back to America?

Rising shipping costs matter, but a narrowing wage gap as foreign wages go up and U.S. wages go down may matter more. Boston Consulting Group found that “the United States is on pace to have lower manufacturing costs than Europe and Japan by 2015,” reported the Washington Post.

President Barack Obama wants to reshore one million jobs by the end of his Presidency. Federal agencies support this initiative by offering competitive grants. The most recent is a multi-agency grant entitled the Make It In America Challenge.

The Make it in America Challenge will provide $40 million through the Department of Commerce, the Department of Labor and the National Institute of Standards and Technology to support the development and implementation of regionally driven economic development strategies “that accelerate job creation by encouraging re-shoring of productive activity by U.S. firms, fostering increased Foreign Direct Investment, encouraging U.S. companies to keep or expand their businesses — and jobs — in the United States, and training local workers to meet the needs of those businesses.”

“Training local workers” is a vital part of the reshoring formula.

You see, many high-tech manufacturing companies located in the U.S. import skilled foreign workers to fill high-tech positions. They do this through the H-1B Visa program. The Make It In America Challenge requires the training of American workers for jobs now being filled by H-1B foreign workers.

Through reshoring, we want more high-tech manufacturing jobs — for Americans.

These H-1B manufacturing jobs include mechanical, chemical, and electronics engineers and advanced technicians in the same fields.

Here lies the challenge for many parts of America and Mississippi. Too many of our K-12 students fare poorly in the science, technology, engineering and math (STEM) programs that produce engineers and advanced technicians. Our global STEM rankings have been on the decline.

We expect our universities to output engineers and our community colleges to output credentialed advanced manufacturing technicians. But to do so, they have to input students with STEM competencies and interests.

Mississippi and America can reshore only so many high-tech jobs with a weak STEM educational system.

» Bill Crawford (crawfolk@gmail.com) is a syndicated columnist from Meridian.

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One Response to “CRAWFORD: Reshoring output requires STEM input”

  1. R. Lawson Says:

    Usually there is a punchline to these articles. “We claim a shortage and the only solution we can think of is indentured (employer sponsored) visa programs”.

    Since you resisted the urge to jump to the usual punchline we can have a reasonable conversation about how we bring back manufacturing and create STEM jobs.

    Labor isn’t trained overnight and skills are acquired without investment and commitment to their development. When they are acquired its a costly investment both in time and money. So we want that investment to be a smart one.

    Let’s look at why jobs fled offshore to being with because that’s the core problem here. Education and training is something we must do once that core problem is solved, but if just investing in education and allowing the status quo to reman is your strategy it is putting the horse before the cart, and will fail. If you build it they may not come.

    “Free trade” deals that really aren’t free at all lead to massive trade imbalances. It is currently a smarter business decision to offshore production and onshore costs. So you send jobs where labor is cheap and preferably taxes are low or non-existent. You keep all your costs on the books here in America so your American subsidiaries are money losers and your money makers are offshore. Not only do you pay no taxes here, you just might get paid by those of us who do pay taxes to keep this scheme going.

    So we can invest in all the training in the world. If the fundamentals don’t change (incentives to send jobs offshore) it is a fools errand. We should resign ourselves to skills that can’t be easily offshored – like Wall-Mart shoppers and Wall-Mart greeters. We need to print more money and keep building this house of cards higher and higher, hoping we’ll be gone before it falls down.

    Or we can do the right thing and move away from a consumer (aka debt) driven economy. We need to be producers AND consumers – not just consumers. We need balanced trade. Anyone who says otherwise has resigned ourselves to building a house of cards.

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