The term off-shoring refers to U.S. companies moving jobs to foreign countries to take advantage of lower labor costs, but now there’s a new term: re-shoring. N.C. State University economist Mike Walden discusses the term and what it means for U.S. jobs.
“It’s really a good term …, because what it refers to is a movement of U.S. company jobs that used to be in foreign countries now back to the U.S. So they’re coming back onshore, if you will. And we’re hearing more and more about this. And the main reason is what we’re seeing in some foreign labor markets — particularly China — is a dramatic increase in the last couple of years in their labor costs. As those countries have expanded, as they’ve moved up the economic ladder, as they’ve experienced inflation, their labor costs have been growing very rapidly, And in some cases, certainly not all, but in some cases, it now makes sense and it’s actually cheaper for U.S. companies who have jobs in those foreign countries to actually bring them back to the U.S.
“We’ve had, for example, … in North Carolina some examples of furniture companies that had been located here in North Carolina. They moved their operations to China, and now they’re bringing them back here to the U.S.
“Now we shouldn’t get real excited. This is still a trickle, and it’s likely not going to bring all those jobs that we’ve lost to foreign countries back. But it does show that the economic sands seem to be shifting, and they’re shifting in a way that is favorable to U.S. companies here doing business on U.S. soil.”