The Electrical Worker online
June 2012

Companies 'Re-Shore' in the South.
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Since 2001, the U.S. has lost an average of 50,000 manufacturing jobs each month for a total of about 6 million today. Two million of those were shed during the 2008-2009 recession, according to data collected by the Information Technology and Innovation Foundation.

But some business leaders are pointing to what they see as a burgeoning reversal of fortune: many U.S.-based manufacturers are bringing business back after shifting production overseas. Rising wages and distribution costs in China — coupled with a largely low-wage, nonunion work force in many Southern states — means the price advantage of manufacturing overseas as opposed to the U.S. is narrowing.

The Boston Consulting Group polled 106 companies in February to gauge their attitudes about "re-shoring." Cost of labor was one of the top reasons plants are coming back, as 37 percent of companies polled say they will move some production from China. That number climbs to 48 percent of companies in the poll that have more than $10 billion in revenue. Examples include General Electric, which has moved much of its appliance manufacturing from China and Mexico to Kentucky. Caterpillar, Inc. has also shifted production from Japan to Georgia for some small tractors and excavators.

But wages still hover near the bottom. The Southern wage for a manufacturing job averages $14 per hour, and starting pay is less, the Washington Post reports. Labor leaders say this will present challenges and opportunities in the effort to revive the industry and bring better wages and benefits to struggling American workers.

"It's a positive thing that manufacturers are deciding to re-invest in American labor," said IBEW International President Edwin D. Hill. "But without rising wages, the workers in the new Southern plants won't be able to rightly enjoy the fruits of their labors. We need to work to not just preserve but expand the middle class by helping these workers win good pay and benefits that come with unionization."

Outside of the South — where organized labor has more of a foothold — there are exceptions where companies take the high road in terms of wages and workers' rights. Avionics company Rockwell Collins recently announced that it is shifting production of some aircraft electronics devices from its facility in Mexico to Iowa. That's good news for the nearly 500 IBEW members of Coralville Local 1634 who will pick up some of the new work.

Local 1634 Vice President Chuck Holder said the quality of the union work force convinced the company to move the production line back north. "We have a three-shift operation, and our productivity is simply better," he said. Members will earn as much as $20 an hour with benefits.

"This is a big deal for us — the membership is really happy," Holder said. "Our facility is 25 years old and we've had three rounds of layoffs in the past three years. Everyone knows how the economy has been, and people had been pretty nervous. It's a big relief to know there's still work to be done and that it's coming here. This also opens up the possibility of more work down the line and more organizing opportunities. We've worked with the company to make this a success, and we've proven ourselves as the work force of choice."

Look for more reporting on Local 1634's victory in an upcoming story on

Read more: For More Americans, Low Wages are the New Normal For More Americans, Low Wages are the New Normal

Read more: Q&A on the Economy Q&A on the Economy

Read more: What Congress Can Do What Congress Can Do

Empty Wallet

Photo used under a Creative Commons license from Flickr user NoHoDamon.

Share of Employees in
Low-Wage Work, 2009
(Most recent year available)
Of all economically developed nations, the U.S. has the greatest percentage of citizens employed in low wage work — earning about $10 an hour.

Source: Center for Economic Policy Research

Low-Wage Workers
by Age Group
While low-wage jobs were largely staffed by teenagers in the late 1970s, such positions are now mostly filled by adults between 35-64 years old.

Source: Center for Economic Policy Research