Here’s something more uplifting than anything you’ve read here lately: it’s an “onshoring” piece–bringing back jobs that were offshored in earlier years–about how some textile jobs are coming back to the US (from the NYT).
The piece hits on a lot of our themes here at OTE:
–The persistent US deficit in traded goods, including textiles, has been the enemy of full employment in this country for over a decade. This pushes the other way.
–This story includes a crucial fact missing from almost every other story about how employers allegedly are in need of more skilled workers: rising wages.
Wages for cut-and-sew jobs, the core of the apparel industry’s remaining work force, have been rising fast — increasing 13.2 percent on an inflation-adjusted basis from 2007 to 2012, while overall private sector pay rose just 1.4 percent. Companies here in Minnesota are so hungry for workers that they posted five job openings for every student in a new training program in industrial sewing, a full month before the training was even completed.
Employers often go on about how they can’t find the workers they need. That’s even led some economists to argue that today’s high unemployment is largely structural, the result of a mismatch between employers’ demands and workers’ skill. But absent increasing wage pressures, there’s no real case for a labor shortage or structural unemployment. As this piece shows, while it can take a bit of time, workers will respond to positive wage signals by shifting into the expanding sector.
–The onshoring is the result of a confluence of interesting, global developments: the diminished differential in production costs between here and some parts of Asia, including labor and transportation costs; customer demands for American-made products; quality control; and safety issues invoked by recent tragedies in foreign factories.
Of course, this is still a relatively small and new phenomenon and textile production remains a highly competitive business with thin profit margins. Surely, we could recreate the lousy working conditions that have often characterized the industry. But the piece suggests that at least at this early stage, strong labor demand is pushing the other way, toward better jobs requiring some training, with decent starting wages and benefits.
It’s a microcosm of the full employment story: it’s hard to imagine either the wage pressure or the impetus for working training absent tight labor markets (in this case, a unique pocket of strong labor demand).