'Reshoring' of Jobs Looks Meager

No one knows how many of the manufacturing jobs created since 2010 actually made a round trip from the U.S. to a foreign address and back. And if jobs are returning, they’re doing so slowly. At the current pace of recovery, it will take 25 years for the U.S. to regain all the factory jobs lost since 2000.

China’s cost advantage is gradually eroding. In 2005 production in China was 31 percent cheaper than in advanced nations, according to the Hackett Group’s calculations. By 2013 the gap will be down to 16 percent, small enough for U.S. production to make sense in some cases, says the study. Likewise, Hal Sirkin, who wrote a 2011 Boston Consulting Group report that’s optimistic about a U.S. manufacturing comeback, estimates that over the next eight years 2 million to 3 million jobs could result from improved U.S. competitiveness. “A significant chunk will be jobs that went to other countries and came back,” he says.

So far, many of the jobs China is losing aren’t heading to the U.S. but to other low-cost Asian nations. Rising wages in China led Coach to start looking for alternate places to make its wallets and handbags. By 2015 the company aims to reduce China’s share of its production to about 50 percent from almost 80 percent today. New orders will be sent to factories in Vietnam, Indonesia, Thailand, and the Philippines. Reshoring to somebody else’s shores will be more common in coming years than jobs returning to the U.S., says Tim Leunig, who teaches economic history at the London School of Economics: “The next president of the United States, whoever he is, will end his term with fewer Americans working in manufacturing than he inherited.”

The bottom line: Though manufacturers have created 495,000 jobs since 2010, there’s little evidence it’s because of a reshoring surge.

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Lynch is a reporter for Bloomberg News in Washington.