Energy Boom And Union Declines Drive “Insourcing Boom” Bringing Jobs Back To America


For The Atlantic, Charles Fishman describes how “insourcing” is now bringing jobs back to America.

Many offshoring decisions were based on a single preoccupation—cheap labor. The labor was so cheap, in fact, that it covered a multitude of sins in other areas. The approach to bringing jobs back has been much more thoughtful. Jobs are coming back not for a single, simple reason, but for many intertwined reasons—which means they won’t slip away again when one element of the business, or the economy, changes.

As with any economic trend, the motivating factors here are complicated, and the article does a good job of laying them out. For one thing, higher oil prices are making the cost of shipping goods across oceans more expensive. For another, China’s economy is modernizing, which means higher wages for workers there, undermining the financial impetus for American companies outsourcing manufacturing.

But there seems to be two major factors driving this.

The first is America’s energy boom. While increases in oil production haven’t done a lot to bring fuel prices down (more on that here), the natural gas boom in America has certainly had a dramatic impact on electricity prices. Manufacturing uses a lot of power. Lower prices here, backed by surging natural gas reserves, means manufacturing in America is cheaper.

Second is organized labor’s weakening grip on private sector labor. A couple of years ago, for the first time in history, public sector union workers began to outnumber private sector unions. That was the result of a decades-long trend in declining union enrollment, which continues through today. Unlike public sector unions, private sector unions have to be more pragmatic. As we saw with the Hostess debacle, a union that gets too greedy will kill the business it is associated with, resulting in no jobs for any workers.

The private sector unions still standing are learning to be a bit more reasonable in their demands. That’s keeping American labor costs lower and bringing more jobs to the country.

These things could change, of course. The federal government could kill off America’s energy boom through taxation and regulation. Organized labor in the private sector could see a resurgence. But for now, the “outsourcing” trend that politicians have been griping about for decades seems to have reversed itself thanks not to any new tariff or government policy but through developments in the free market.

Rob Port is the editor of In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters.

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  • Harold

    Republicans along with democrats during Clinton and Bush years embraced free trade throughout the world with no rules for cheating, which has occurred and damaged our industries because now our workers in many fields have seen their wages lowered in order to compete with cheap labor overseas, or their plants have moved to those countries for that cheap labor. Both political parties embraced free trade as it was called in those days, but it certainly wasn’t free when we lost all those jobs to countries who never raised the wages and living conditions of their workers who now compete with american workers for those jobs. Free trade was sold to america as a win win situation, and now we don’t have enough jobs for our people. Soon you won’t have enough money to buy that cheaply made product we used to produce for our own people.

  • The Fighting Czech

    Great jobs for all coming back to the USA!!!! of course there wont be any benefits, because they will all be 29 hr work weeks so youll be able to hold down 2 part time jobs. and the best part???? your income will still be low enough, that you wont have to pay taxes anymore.. and you get a SNAP card too. yup, Its going to be known as the American Dream, the next Generation..

    • awfulorv

      An analogy can be found in the fish farms found in the waters of many oceans. If we’d learn to manage who, what, where, when, and how many, fish could/should be taken, there would be no need for fish farms. Same goes for world wide economies…

  • $8194357

    This has got to be a conservitive lie from hell.(sarc)

    It doesn’t line up with what we teach and preach the masses from the left…..

    Bill Ayers wrote the acredidation courses for most of our teachers colleges…
    Leninist dream come true..

    In September, the Chicago Teachers Union went on strike, shutting down the Windy City’s schools for 10 days. Many of those same teachers were in attendance on Nov. 10 at the Midwest Marxism Conference held at Northwestern University in Chicago.
    The topics of the conference were:

    Marxism, Crisis & Resistance

    The Meaning of Marxism

    The Flint Sit-down Strikes & The Founding of the UAW

    From Apartheid Schools to the New Jim Crow: Racism, USA

    The Democrats: A Critical History

    Russia: A Case Study in Workers Power & Revolution

    Socialists & Trade Unions

    Class, Race & the Civil Rights movement

    Education & Capitalism

    Lenin’s Theory of the Revolutionary Party

    Marxism & Women’s Liberation

    Whose City? Labor, the 1%, and the Democratic Party Machine in Chicago

    Imperialism: Why Capitalism Creates War

    Detroit, I Do Mind Dying

    Read more: