With historic unemployment, some propose reshoring incentives to help bring jobs to US

Posted at 4:16 PM, Jun 25, 2020

WASHINGTON, D.C. – Since the start of his presidency, President Donald Trump and his administration have talked about getting manufacturing companies to come back to the United States, a process known as reshoring.

Now, with unemployment at a historic high, another 1.5 million people filing jobless claims last week and still 19.5 million continued claims or people unemployed, the idea of reshoring is being revisited by Congress.

Some on Capitol Hill are proposing reshoring incentives for companies in the next stimulus package.

“There are a lot of potential ways that the administration and Congress could come up with tax subsidies and tax breaks for companies that produces here,” said Ed Yardeni, an economist and the president of Yardeni Research.

While believes there could be some jobs created by companies reshoring in the U.S., it’s hard to say how many. That’s partly because, many companies that would consider reshoring would also consider using artificial intelligence at their production plants.

“Clearly bringing back jobs would be great, but I don’t think we go back to the 70s and 80s, where we had a lot more people employed,” Yardeni added. “I would think that if you are reshoring and bring production back to the U.S., you are going to use state of the art technology to do that, so I’m not sure it is going to be a huge win-win in terms of jobs.”

Experts, including Yardeni, believe companies that would most likely consider reshoring would be those in the pharmaceutical and technology sector. Their reason for the move is likely less for job creation and more because of national security concerns.

Either way, the way to get more jobs out of reshoring may be by doing more than just incentivizing companies to come back to the U.S.

“Maybe what we need is to combine reshoring with really focusing on reeducating a lot of the labor force so that they can manage the robots, build the robots, program the robots, as opposed to doing the job the robots are doing,” said Yardeni.