It is amazing to watch liberals push public policies that only exacerbate the very economic problems they’re trying to solve. And the latest example: Liberals’ demand for an increase in the minimum wage to $15 an hour—that is, until they decide $20 or $25 would be even better.
For years liberals have complained that U.S. companies were “offshoring” jobs—i.e., establishing workplaces in foreign countries and hiring locals or contracting with foreign companies to do the work that had been done by U.S. workers on American soil.
Well, a few years ago there was growing evidence that the offshoring trend had peaked and companies were beginning to bring some of those jobs back to the U.S.
In 2012 the Wall Street Journal reported in an article entitled “Once Made in China: Jobs Trickle Back to U.S. Plants” that, “After a 35% decline in the number of manufacturing jobs between 1998 and 2010, the tally has since risen by 489,000, or 4.3%, to 11.9 million. … A survey of 105 companies in January and February … found that 39% were considering moving some manufacturing back to the U.S.”
And the reason for the reversal? “U.S. manufacturing has become attractive for some companies as Asian wages have surged over recent years and the wage gap between the U.S. and China has narrowed.” (emphasis added)
By January of last year, the Journal still saw the trend: “Companies Tiptoe Back Toward Made in U.S.A.”
But it appears you can kiss that trend goodbye. Management consulting firm A. T. Kearney, which has developed an index to track manufacturing reshoring, sees a turnaround. “Indeed, the 2015 data confirms that offshoring seems only to be gathering steam, while the U.S. reshoring train that so many predicted has yet to leave the station.”
Of course, not all offshored jobs were in manufacturing, many were for lower-paying service jobs such as call centers.
What happened to quash the budding reshoring movement? Barack Obama and the liberal agenda.
Employers offshore, in part, to lower labor costs. As China’s costs rose, it made economic (and political) sense to start bringing some of those jobs back.
But Obama and Democrats successfully raised the cost of many lower income workers by requiring employers to provide health insurance. And now California and New York have passed legislation to raise the minimum wage to $15 an hour. With health insurance, a minimum wage worker will be making well over $30,000.
Now that wage differential between the U.S. and China or Vietnam or Indonesia is growing again.
The good news for many workers is that they can thank liberals for increasing their wages and health benefits, which won’t do them much good as they watch their jobs go back overseas.