- US manufacturing is struggling to fill existing jobs as tariffs aim to bring back more.
- The manufacturing industry faces a skills gap, an aging workforce, and negative perceptions.
- Trade experts say China has advantages in manufacturing from subsidies and low-cost labor.
The US manufacturing renaissance may need a lot more than tariffs.
President Donald Trump wants to bring back manufacturing, but even if his tariffs manage to stimulate growth in this sector, the industry faces a skills gap, an aging workforce, and negative perceptions — not to mention the potentially mounting cost of hiring domestic labor in comparison to countries like China.
Experts and researchers in trade told Business Insider that the manufacturing sector is struggling to fill the existing open positions.
“Manufacturers have faced a structural challenge for multiple years now,” said Carolyn Lee, president and executive director of the Manufacturing Institute. “The heart of that is most people don’t know what modern manufacturing is all about, that we still are challenged by a perception of what the industry used to be.”
“Our workforce, a lot of them are also retiring, and they are older,” Lee added. “Manufacturers have averaged about 500,000 open jobs every month for several years now.”
The Manufacturing Institute and Deloitte found in an April 2024 report that the manufacturing sector could need as many as 3.8 million net new employees between 2024 and 2033, and that around half of these jobs could remain unfilled if the shortfall in workers with the right skills is not solved.
More than 65% of manufacturing companies consider recruiting and retaining workers as their top business challenge, according to the Manufacturing Institute.
Sameeksha Desai, Associate Professor at Indiana University and director of the Manufacturing Policy Initiative, told BI that job functions and the types of technologies that workers need to know are rapidly changing, and training is struggling to keep up.
“More innovation and more technology uptake are crucial for the industry, but this also means manufacturing companies need to fill needs related to cybersecurity, digital skills, data management, and so on,” said Desai. “These skills can also be workforce concerns.”
Trump made manufacturing a cornerstone of his policy, but experts are skeptical
Bringing back manufacturing jobs has been an integral part of Trump’s campaign promise, which he doubled down on by imposing some of the highest tariffs the country has seen in decades.
“Have you ever heard that we’re going to take other countries’ jobs?” he said to attendees during a campaign rally at the Johnny Mercer Theatre in Savannah, Georgia, in September. “We’re going to take their factories — and we had it really rocking four years ago — we’re going to bring thousands and thousands of businesses and trillions of dollars in wealth back to the good ole’ USA.”
“Jobs and factories will come roaring back into our country,” Trump added while announcing sweeping tariffs on April 2. “And ultimately, more production at home will mean stronger competition and lower prices for consumers.”
Howard Lutnick, the secretary of commerce, also proposed having people work in factories for the rest of their lives and then passing the same lifestyle on to their children and grandchildren.
A recent Wells Fargo report says that tariffs are unlikely to bring manufacturing jobs back to America, and Willy C. Shih, a professor of management practice in business administration at Harvard Business School, told BI that some countries like China may indeed have some key advantages.
“Let’s take your typical smartphone that I estimate to have about four hours of labor in it,” said Shih. “In China, you pay between $6 to $8 an hour for that, but in the US, with overhead benefits, healthcare, and other costs, you’ll probably pay $40 an hour.”
“That’s $160 versus $30 for four hours of labor content,” he added.
Desai also says that China’s subsidies for domestic industries are “definitely a big part of the story,” as are well-established industry clusters and regional value chains that help keep costs down.
A solution for the manufacturing shortfall?
Carolyn Lee of the Manufacturing Institute told BI that she thinks a large part of the issue is that people are often being pushed to get a college degree, without thinking about what other well-paid opportunities exist and how to attain those skills.
“Let’s get the learning you need for the job that you aspire to,” said Lee. “I think there are a lot of different opportunities out there, and society shouldn’t just be pushing people to one.”
But it may not be the end of the world even if manufacturing does not return to the US in the desired numbers, according to one expert.
Gordon Hanson, a professor of urban policy at Harvard Kennedy School, told BI that policymakers are “asking the wrong question” by overfocusing on manufacturing.
“The problem we should be trying to solve here is the absence of good jobs, especially for workers without a college degree,” said Hanson. “We’ve lost a lot of middle jobs in middle wage categories over the last 30 years, but most good jobs that non-college workers can get are not in manufacturing.”
“They’re going to be in healthcare, they’re going to be in the construction trades, they’re going to be in the many parts of the information technology industry where you don’t need a four-year degree — there are options,” Hanson added. “What you need is the right sort of technical training you can get in a community college — manufacturing is just one of many options.”
The last company I worked for was a Specialty Paper Manufacturing company – I think the vast majority on all sides of this conversation of Manufacturing are completely disconnected with reality unless they have any first hand exposure to the nature and state of manufacturing facilities in this country. In regards to the Paper Mills for instance – these facilities are largely ancient – grandfathered in from a time before regulations and standards essentially prevent the construction of a new one. The ability for them to keep these systems running and profitable is near impossible – the company I worked for had one Mill partially blow up only a few months after the acquisition and ultimately after a few years they found it was not viable to keep open and they just closed it down; now they recently announced the closure of another near 1000 acre property due to the fact it hasn’t been profitable to run for years and the cost to modernize or bring back to life any of the ancient paper machines that are sitting idle is in the many millions. I was on the IT side of things trying to help modernize various systems and let me tell you – these OT networks and systems running manufacturing systems are ancient and many still require Windows 9x and do not support hardware and software utilizing anything close to modern IT solutions so they cannot take advantage of any technological progress of the last 30 years. I didn’t have to spend much time inside the Mills but the one I did go through – the working conditions are awful – well over 100 degrees in the summer etc. Automation is possible and in place in some cases but others it is not economically viable. Overall I can only imagine that most Manufacturing in this country is in a similar boat.
That’s what 55 years of offshoring and communist regulations do to the manufacturing base.
No coincidences here.
Apparently, a lot of people don’t want to travel to the US anymore.
I’m kind of scared of the cops there, if you get a bad one they seem to have the power to make life hell. I remember years ago having a gun drawn on me at a border crossing. That was quite surprising, the guy seemed so friendly an hour before that, but we walked the wrong way so he told us he could shoot us. It was all a bit much really. Cops in Colombia were better. One even let us take photos and touch his M16 (but he wouldn’t let us hold it by ourselves, which is reasonable).
Do you think any of that fear is justified? I travelled through South America, Honduras, Nicaragua, Mexico, Colombia etc but the one place that felt cold to me, the one place I would not want to be stranded in with no money was the USA. It felt like being in a steel box, like some kind of Matrix. It had a very bad vibe. Out in the country, in the small towns, it was far better. But overall it seemed a harsh place to me compared to the others. It’s a strange mix of the best people ever and the most dangerous. The best Americans to me seemed like THE best, most polite, well spoken, elegant, and civilised people I’ve ever met. But the US seemed to be also full of complete morons and lunatics, or at least they appeared to act that way. Certainly it’s a wide spectrum.
What do you guys think of American cops? How often have they gone over the top with you or pointed a gun over a minor traffic infringement? How serious are they about Jaywalking laws, that sort of thing? Are the police brutality and stupidity videos an accurate sampling of the truth or not?
https://www.youtube.com/watch?v=0vq2hHrKiyg
It depends on who you are. For people like me it’s fine. However, if I get pulled over by a police officer, I hope he’s a white male. Women police officers are the worst and America has a lot of them. In this regard, they definitely won’t let you off the hook. It just pays to be respectful.
Black cops actually aren’t that bad. I think it depends on the jurisdiction as well. I think there’s a lot of YouTube videos that show the multicultural mongrels getting treated harshly. That’s because they have it coming to them. There’s a lot of stupid people doing a lot of stupid things in the United States.
I was pulled over about 7 or 8 years ago and a young white male told me why he pulled me over, I apologized, made up an excuse and told him I was coming back from one of my condos that just flooded, and promised I would be more careful and wouldn’t do it again, and he let me go without even asking for my papers.
It takes money to live in America. Lots of people come here to get away, but I find the United States can be demoralizing to those with little or no money. However, being outside of the blue areas and the cities help to make life a lot easier. Cost of living in some areas of the country can be much cheaper for its local residents than anywhere else in the developed world.
Houses in many areas can be had for as little as $70,000 to $80,000. And I’m not talking about Detroit or Gary IN.
I wouldn’t live anywhere else. The ability to conduct business and go about a daily routine uninfringed is without peer. Despite what we see on the news, there’s a lot less corruption, the laws and such are straightforward and less arbitrary, and taxes are a lot less. I mean a lot less.
It is important for people like us to stay with like kind. It’s just much easier when we follow biblical ideals. I don’t delude myself into the multicultural lie.
Depends on location too. Younger people in many small towns only have fast food places or gas station mini marts to work at. The leap to an expensive big city where the jobs are at takes a lot of ambition and responsibility. Many highly intelligent kids are flipping burgers when they could be making alot more money if they were in a city with better job opportunities.
Trying to reverse an economic model in place for the last 50 years will be very difficult and take many years.
There’s has been too much of a push to send students to college that are not appropriate for college and as a result a college degree has been downgraded. College is a joke these days. Meanwhile vocational technical schools have been denigrated as for losers when in fact it is appropriate for very intelligent and talented people. Vocational schools lead to many high paying jobs without that costly degree. This is why we don’t have enough skilled factory workers and tradesmen. Students for the last 30 years have been lied to about the value of a college degree. In fact, only a select few college graduates get the high paying jobs while the others languish with mediocre jobs and are burdened with student loan debt. I think the destruction of the vocational trade education was a part of the plan to destroy USA. It is interesting that the Leftists promote education! education! which is really translated as useless brainwashing.
Yep same thing in NZ.
It has been said that universities are businesses now, which means the students are customers, and since the customer is always right, if the customer says the exam is too hard then the exam is too hard.
So the exam must be made easier. This is the law of supply and demand in action.
The student loan thing is a scam. So many fell for it. The professors pay doesn’t matter, it’s the administrators. They live lavish lifestyles funded by the student loans. An investigation should be done into where all this money went. These admin parasites should pay a big chunk of it back.
Remember the movie, Rudy? He grew up in a steel town and his father and likely his fathers father worked their. That type of connection has been gone since the 80’s. I think it’s almost a cultural thing. Now we have self entitled young people who expect to be coddled at work. The work ethic is practically shot. Maybe I’m too negative but it seems like the horses are out of the barn and its too late to think about shutting the door.