Relocation and de-globalisation are all the rage, but will jobs come back? – Mish Talk

The Wall Street Journal reports that American companies are on the verge of bringing home a record number of jobs from abroad

American companies are on track to relocate, or return to the United States, nearly 350,000 jobs this year, according to a report due Friday from the Reshoring Initiative. It would be the highest number on record since the group began tracking data in 2010. The Relocation Initiative is pushing to bring manufacturing jobs back to the United States.

Over the past month, dozens of companies have announced plans to build new factories or launch new manufacturing projects in the United States. Idaho-based Micron Technology Inc. announced a $40 billion expansion of its current headquarters and investments in memory manufacturing. Ascend Elements said it would build a billion-dollar lithium-ion battery materials plant in Kentucky. South Korean conglomerate SK Group said it would invest $22 billion in a new packaging plant, electric vehicle charging systems and hydrogen production in Kentucky and Tennessee.

“We think this will be a long-term trend,” said Jill Carey Hall, U.S. equity strategist at Bank of America Corp. “Before Covid there was… a little uptick, but obviously Covid was a big trend and you saw a continued big jump this year.

To be sure, globalization has been a tailwind for investors and big business for much of the last 30 years, especially American companies. The increase in cross-border trade boosted profits and productivity and allowed countries to focus on the goods and services they were best equipped to produce. Globalization has also provided multinational companies with new customers and new pools of cheap labor.

However, the vast change might not be an outright victory for American blue collar workers. The increase in capital spending suggests that many companies may be looking to replace foreign workers with technology rather than U.S.-based workers, according to Bank of America. Capital expenditures are often investments in equipment or technology that automates worker tasks.

“There’s no doubt that companies, when they bring back jobs, know they’re going to pay three to five times more for labor,” said Harry Moser, founder and chairman of the Reshoring Initiative. “Therefore, they have to automate.”

North American companies ordered a record 11,595 robots, worth $646 million, in the first quarter, setting 2022 on pace to surpass last year’s record numbers, according to the Association for Advancing Automation.

Leave a Comment

Your email address will not be published.