Made in America: Trend against outsourcing brings jobs back from China

Sat Jan 14, 2012 9:59 AM EST

Manufacturing is now underway at Lincolnton Furniture in North Carolina.

By Sopan Deb
Rock Center
The United States may be on the verge of bringing back manufacturing jobs from China.
Harold Sirkin, along with Michael Zinser and Douglas Hohner (all experts from the Boston Consulting Group – a leading management consulting firm), says that outsourcing manufacturing to China is not as cheap as it used to be and that the United States is poised to bring back jobs from China. The three consultants first reached this conclusion in a recently published study titled “Made in America, Again: Why Manufacturing Will Return to the U.S.”
Many companies, especially in the auto and furniture industries, moved plants overseas once China opened its doors to free trade and foreign investment in the last few decades. Labor was cheaper for American companies – less than $1 per hour according to the BCG report. Today, labor costs in China have risen dramatically, and shipping and fuel costs have skyrocketed. As China’s economy has expanded, and China has built new factories all across the country, the demand for workers has risen. As a result, wages are up as new companies compete to hire the best workers.
“The tilt is now getting lower,” Sirkin says. “We think somewhere around 2015 it’ll look flat and may start to tilt in the U.S. favor at that point in time.”
By 2015,  it will only be about 10 percent cheaper to manufacture in China.
“We have to recognize one thing,” Sirkin told NBC’s Harry Smith in an interview to air on Rock Center with Brian Williams. “The average Chinese worker is about a quarter as productive as the average U.S. worker.”