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Reshoring from China to US not a short-term solution

Reshoring industrial operations from China to the US has not been as straightforward as it may have sounded at first, and companies looking to do so “face significant problems”, according to a report by the South China Morning Post.

American companies, encouraged by the administration of President Donald Trump to relocate to the US, have found that there are numerous problems with reshoring.

One of the main issues relates to recruitment. The industrial sector – whether you’re talking about manufacturing, logistics, or other segments – has long had to contend with deep, structural problems in attracting workers.

Not many young people – or even older people – choose the industrial sector for their career path, possibly still thinking of it as potentially a difficult and dirty job.

And even with the coronavirus pandemic making tens of millions of new people unemployed, and making people realise that the US is not as self-reliant as it would like to be, it’s difficult to see how those attitudes can be changed in the short term.

As quoted by SCMP, Lindsey Graham, US Republican Senator for South Carolina, says: “Coronavirus has been a painful wake-up call that we are too reliant on nations like China.”

US politicians like Graham have introduced a number of bills to try and encourage reshoring, calling for subsidies and tax breaks among other things.

However, companies returning to the US from China still need to resolve the staffing issue before anything else.

Rafael Salmi, president of Richardson RFPD, a technology engineering company based in Geneva, Illinois, says: “I don’t believe that countries, any country around the world, can re-skill people very quickly.

“You’re going to have hundreds of thousands of Uber drivers or Instacard delivery people or hairdressers that lose their jobs. And it’s like, wow, I’m going to create a hi-tech factory? The access to talent is still a big challenge.”

An American organization called Reshoring Initiative is calling for something it has dubbed “new-collar jobs”, a play on the old terms “blue collar jobs”, meaning manual labour work, and “white collar jobs”, meaning desk or office jobs.

The Reshoring Initiative says: “Over the years, the dividing line between blue and white-collar workers has grown frayed and it is about time to move to a new-collar worker philosophy where essential skills matter more than outdated degrees.”

Perhaps thinking too long term to make much of a difference in the immediate aftermath of the devastation caused by the coronavirus pandemic, the Reshoring Initiative says: “The US educational system must be retooled to graduate career and college-ready citizens with the employable skills and knowledge to obtain their first job and / or continue on with post-secondary education or credentialing for success in work and life.

“The Institute for the Future estimates up to 85 percent of ‘new-collar’ jobs don’t yet exist so having transferable skills will be more important than a degree.”

Main image courtesy of AreaDevelopment.com

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