The reshoring trend isn't about replicating traditional manufacturing. Instead, the U.S. gains a competitive advantage by leveraging automation and robotics, effectively trading labor costs for electricity costs. This strategy directly challenges global regions that rely on exporting cheap human labor.
Related Insights
The decline in U.S. manufacturing isn't just about labor costs. A crucial, overlooked factor is the disparity in savings. While Americans consumed, nations like China saved and invested in capital goods like factories, making their labor more productive and thus more attractive for manufacturing investment.
Onshoring is not possible by replicating China's labor-intensive model, making autonomous robots a necessity. Simultaneously, the strategic, dual-use nature of this technology makes it imperative to develop these robots domestically. This creates a powerful feedback loop where the technology enables onshoring while the need for the technology drives it.
Bringing manufacturing back to the US won't mean a return of old assembly line jobs. The real opportunity is to leapfrog to automated factories that produce sophisticated, tech-infused products. This creates a new class of higher-skill, higher-pay "blue collar plus" jobs focused on building and maintaining these advanced manufacturing systems.
To find the leading edge of US reshoring, look beyond traditional industrial firms. Major technology companies like the "Mag7" are now aggressively hiring top-tier physical AI, robotics, and manufacturing talent. This signals a fundamental shift in where the most significant capital and innovation in US manufacturing are being directed.
Amazon's plan to automate 75% of operations isn't just about job replacement; it's a fundamental workforce transformation. Future roles, even for hourly workers and managers in its facilities, will increasingly require knowledge of engineering and robotics to maintain the vast robot fleet, shifting the baseline for employment.
The belief that China's manufacturing advantage is cheap labor is dangerously outdated. Its true dominance lies in a 20-year head start on manufacturing autonomy, with production for complex products like the PlayStation 5 being 90% automated. The US outsourced innovation instead of automating domestically.
A powerful mental model for the future of work is a three-step pipeline. If a job can be done remotely in a high-cost country, it can be offshored to a low-cost one. Once offshored and process-driven, it becomes a prime target for AI automation. This positions remote work as a transitional phase, not an endpoint.
The narrative of "evil capitalists" replacing jobs with robots is misguided. Automation is a direct market response to relentless consumer demand for lower prices and faster service. We, the consumers, are ushering in the robotic future because we vote with our wallets for efficiency and cost-savings.
The national initiative to reshore manufacturing faces a critical human capital problem: a shortage of skilled tradespeople like electricians and plumbers. The decline of vocational training in high schools (e.g., "shop class") has created a talent gap that must be addressed to build and run new factories.
By shipping millions of jobs overseas, globalism forced American workers to compete with a much larger, cheaper international labor pool. This eliminated employers' need to compete for a finite domestic workforce, leading to wage stagnation. The proposed solution is to bring manufacturing jobs back to the U.S.
