Reshoring may come at the cost of wage increases...

Posted by scapozzola on 05/29/2012

In a Wall Street Journal article today entitled "Flat U.S. Wages Help Fuel Rebound in Manufacturing," David Wessel and James Hagerty report some good news and some bad news.  On a positive note, U.S. manufacturing employment has been on the upswing in recent months.  Sadly, though, wages for many manufacturing positions have stagnated.

There's an irony here.  Lower pay for U.S. manufacturing workers may be helping to bring some operations back to the U.S., in part because factory pay in China is on the rise, which makes outsourcing a somewhat less attractive option.

But even as U.S. manufacturing adds jobs, workers aren't being paid what they should be worth.  According to Wessel and Hagerty, "sluggish wages also are squeezing workers' incomes and spending. That, in turn, hurts retailers who target middle-income earners and restrains the vigor of the economic recovery."

Overall, the U.S. manufacturing sector has shed more than 5 million jobs since 2000.  But now, as factories start to add workers, they're not necessarily willing or able to offer pay commensurate with the more high-tech, high-skilled work of 21st Century industry.

The Alliance for American Manufacturing (AAM) has continually urged more investment in workforce training in order for the U.S. to meet the competitive technical needs of the 21st Century.  Along with a skilled workforce, though, should be good pay to reward and encourage such skills.

Read more.

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