There has been some alarm in recent months that US manufacturing jobs are leaving the US en masse and heading south of the border. But what is actually happening is much more dynamic and promising for the outlook of manufacturing jobs in the US. The partnership that the US maintains with Mexico provides a competitive advantage to both nations.
The Carrier Case
US Presidential hopeful, Donald Trump, recently made quite a stir when he threatened to promote the raising of taxes on companies that move manufacturing jobs overseas. His comments came on the heels of news that air-conditioning manufacturer, Carrier Corp., was moving 1,400 positions to Mexico. Building on the fear that US manufacturing jobs were in danger of being lost to Mexico, Trump singled out Carrier for their decision to pull out of their Indiana manufacturing facility in favor of one in Monterrey, Mexico. He went on to blame free trade agreements that reduce tariffs on import and export duties for manufactured goods. But does this really constitute a mass exodus of manufacturing jobs?
The Indiana Case Study
In response, several experts have pointed out that, while many low- to medium-skill US manufacturing jobs are leaving for Mexico, many other high-skill jobs are being created in the US. In fact, just 55 miles away from where Carrier is eliminating 1,400 labor positions, GE is ramping up an aerospace plant with 230 high-skill, high-paying positions in the same state of Indiana.
The aforementioned is no isolated case. According to the US Bureau of Labor Statistics, in 2014, Indiana was ranked 2nd in the nation for manufacturing-job growth. What is actually happening is a change in the kind of manufacturing jobs in the US from. Mexico and the US are in many ways manufacturing partners that complement one another. Steven Dwyer, CEO for Conexus Indiana and former COO of Rolls-Royce Corp. described the situation in this way:
There is a transition going on. Manufacturing is becoming much more sophisticated, but that doesn’t mean it’s going to be automated or that jobs will go away—it just means that US manufacturing jobs will change.
The kind of manufacturing jobs migrating out of the US typically involves commodity goods that can be mass produced by low- or medium-skill labor. But at the same time, the US is growing in terms of the manufacture of proprietary goods requiring a sophisticated and highly skilled labor force. For states like Indiana, the future of manufacturing in the US focuses on industries such as aerospace, high-end automotive, and other sophisticated goods. Additionally, products with unique designs or properties and requiring advanced skills will find a home in US manufacturing facilities.