Off the West Coast, an armada of container ships wait for weeks to unload their cargo. In the Midwest, trains loaded with goods sit in miles-long lines. Across the nation, overworked truck drivers slog it out in a game of hurry-up-and-wait.
And all the while, businesses are disrupted and consumers are facing higher prices for some products due to a breakdown in the global supply chain that no one knows how to resolve.
“It’s going to get worse again before it gets better,” said Brian Bourke, chief growth officer at SEKO Logistics, to The Washington Post. “Global supply chains are not built for this. Everything is breaking down.”
That’s alarming news, and it puts an exclamation point on the need for the U.S. to bring back manufacturing jobs to our nation and our hemisphere.
The supply chain problem has several roots, including production slowdowns of certain products due to the pandemic and a spike in demand for shipped-in products from American consumers while cooped up during the pandemic.
But well after the world economy began stabilizing from the disruptions of COVID-19, the supply chain remains in turmoil. As reported by The Post in a story based on interviews with more than 50 people associated with every link in the chain, the pandemic disruptions “exposed weaknesses in the nation’s transport plumbing: investment shortfalls at key ports, controversial railroad industry labor cuts, and a chronic failure by key players to collaborate” among them.
And as Bourke said, it’s getting worse. Businesses are preordering items at an accelerated rate in hopes of stockpiling supplies, which is putting more pressure on the broken system.
Shortages are occurring elsewhere, too, including in Britain, where they’re driven by Brexit and the logistical problems snarling the system worldwide.
Last month, President Joe Biden initiated a 100-day, government-wide review on the issue, but the best way to resolve it is by creating policies that would help repatriate manufacturing jobs.
This would reduce reliance on goods shipped from overseas, particularly China, and would also have significant environmental benefits by cutting greenhouse gases used in shipping products over wide expanses of ocean. Repatriating manufacturing also protects consumers — our global shipping system relies upon unrealistically inexpensive oil, something that can’t continue. All it would take would be a significant jump in oil prices and those formerly “cheap” goods from China could become more expensive than producing them at home. Offshoring so much manufacturing to Asia is neither sustainable nor wise.
Moving manufacturing back home also would help America’s battered working class and middle class, while putting pressure on China to check its aggressive behavior by squeezing its economy. Gaining some geopolitical leverage over China to become a better global citizen would benefit U.S. security and possibly prevent a war down the road.
While American jobs should be the main focus of this effort, the U.S. should go about it with an eye toward also strengthening the economies of our neighboring countries and the entire hemisphere.
In some sectors, jobs that have migrated overseas require lower wages than the standard for American workers, but the U.S. would benefit by helping draw them to the hemisphere. The result would be shortened supply lines and a boost to the economies of neighboring nations, which would improve their ability to trade with the U.S. and buy our goods.
As we’ve stated before, what’s needed is for the Biden administration to create tax breaks for bringing manufacturing back home to the U.S. and develop smaller but meaningful tax incentives to draw lesser-paying jobs to Mexico, Central America and South America.
Biden floated measures aimed at job repatriation, such as the elimination of incentives for U.S. multinationals to shift investments overseas, and discontinuing expense deductions for domestic companies that offshore jobs.
Those are fine steps, but the real key is a package of attractive tax breaks that would incentivize companies to bring jobs back to the U.S. and the region. These breaks wouldn’t hurt the federal budget, as an increase in high-paying domestic jobs would generate offsetting tax revenue.
This is a critical need, and one that is gaining urgency every day that ships sit idle, trains back up and trucks inch along in traffic jams.
With no end in sight to the current problem, and another one waiting right around the corner with the next pandemic or some other type of global disruption, we must get manufacturing jobs back on our soil and simplify the system.