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Why manufacturing jobs are coming back to the U.S. — even as companies buy more robots

But for how long?

New Chrysler CEO Tours Windsor Manufacturing Plant Photo by Bill Pugliano/Getty Images

In the long run, many think that automation and robotics are going to replace a significant percentage, if not the overwhelming majority, of manufacturing jobs. That’s certainly a possibility. But for now, even as companies add more robots to North American factory floors, the number of human jobs in manufacturing is also on the rise.

In April, 12.4 million Americans worked in manufacturing, according to the U.S. Bureau of Labor Statistics. That’s up by about 25,000 jobs from a year prior, and almost a million from early 2010. But it’s still down by about one third, or more than six million jobs, from 1980.

One reason for the uptick: Last year, for the first time in decades, more manufacturing jobs came back to the United States than left, according to data compiled by the Reshoring Initiative, a firm that works to bring jobs back to the U.S.

In 2016, there was a net gain of more than 25,000 jobs. That reflects a loss of about 50,000 jobs that left the country, combined with a gain of about 77,000 jobs that returned to the U.S. or are a result non-U.S. companies investing in U.S. factories, according to the report.

The bulk of reshored jobs — about 60 percent from 2010 through 2016 — came from China, according to the report. Labor has become more expensive in China than in the past, with Chinese wages going up 12 percent to 15 percent a year for the past 15 years, according to Harry Moser, founder of the Reshoring Initiative.

The automotive industry has brought the most jobs back to the U.S., followed by makers of electronic components and appliances. Those are industries, according to the report, “focused on products whose size and weight suggest offshoring never offered great total cost savings.”

But there’s still the question of how the increasing use of automation could eventually play an even bigger role in these trends. In the first quarter of 2017, North American companies bought 32 percent more robots than the same period last year, according to data from the Robotic Industries Association. The reason for the increase? Robots have become cheaper.

Even though now both human jobs and robotic manufacturing are on the rise, in the end machines do take away jobs from humans. For every robot brought into the U.S. workforce between 1990 and 2007, six human jobs were lost, the National Bureau of Economic Research found in a study released earlier this year.

So with robot sales on the rise, why aren’t U.S. manufacturing jobs plummeting? The answer, for now, may be that robots are actually helping bring more jobs back from overseas than they’re eliminating.

Take the Carrier manufacturing plant Trump claimed he helped convince to stay in the U.S. last year. That decision was driven in part by the company’s decision to save on labor by automating the plant. Adidas, as another example, says it’s opening a new factory in Georgia that will be highly roboticized, with only about 160 human workers. So while those jobs are staying in the U.S., the plants aren’t employing nearly as many human workers as they would have in the past.

“If you had an assembly plant that was making 500 cars a day and you shut it down 20 years ago and you offshored the production, and you move the plant here again, now you’re going to be making the same number of cars with maybe half as many people,” Moser says.

The question then becomes how long this mutually beneficial trend will last before the robots take over.

Additional reporting by Rani Molla.

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