To reduce dependence on China, more of us need to work in factories

Elisabeth Braw is a senior fellow at the American Enterprise Institute and adviser at Gallos Technologies.

As deglobalization and its recently born sibling, derisking, have policy wonks excited, even free-trading political leaders are concluding that Western countries need to reduce their manufacturing dependence on China by moving it home or to friendlier countries. But who’s going to work in all the factories that could now be built on Western shores?

If the West is serious about friendshoring, many more will need to carry out manual work — albeit aided by robots. And yes, that means university graduates.

Last week, European Commission President Ursula von der Leyen presented her proposal for a new economic security strategy for the European Union, which, as reported by POLITICO, promises to be “an exercise in this new economic thinking.” Now set to be discussed by the bloc’s national leaders, the strategy takes the approach that “an economic power like the EU must pay greater heed to the security risks in its trade and investment policies. If [the strategy is] implemented, the EU would behave on the international stage more like the United States or Japan.”

This means less dependence on China, and more manufacturing jobs and cogs in the supply chain wheel at home. And what’s not to like about a strategy that would see the EU become less dependent on China and create qualified jobs in one swoop, just like the Americans are doing with their Inflation Reduction Act?  

It will result in an increasing need for lots more manufacturing workers, along with more of the manual workers who make our economies tick, such as train drivers, lorry drivers — and even miners as the bloc also tries to reduce its dependence on Chinese-processed rare earth minerals.

Such job creation is good, but the challenges of bringing production home are already becoming clear in the U.S., which was one step ahead of Europe in globalizing and is now one very large step ahead in deglobalizing. There simply aren’t enough workers for the jobs the West hopes to bring back in the name of national security and increased prosperity.

In the U.S. mining sector, for example, “the crunch spans engineers who design job sites, miners who extract raw metals and the truck drivers who haul them away for processing. It is another headache for producers already struggling to supply the materials needed for electric vehicles, solar panels and wind farms,” according to the Wall Street Journal.

Essentially, there currently simply aren’t enough workers for the jobs the West hopes to bring back in the name of national security and increased prosperity.

For a peek into the reality that awaits, let’s consider Germany’s current situation: The country already has over 100,000 unfilled jobs in transportation, with another 100,000 in manufacturing and installation services — and that’s not counting the vacancies in healthcare, hospitality and education.

Meanwhile, Tesla — which recently built a new factory in Brandenburg — is in the process of hiring the 12,000 workers needed to build its electric cars there, but since there aren’t 12,000 automotive workers in waiting, Elon Musk’s company is now training apprentices and recruiting individuals with previous experience in other fields and training them. And last week, Chancellor Olaf Scholz secured a deal that will see Intel set up a semiconductor plant Magdeburg, but there was no word on how the plant’s workers are going to be sourced.

The main reason Western countries will struggle to accommodate all the new factories coming their way is that they enthusiastically implemented globalization on the assumption that other countries could manufacture goods while they focused on the service economy. And that worked out exceedingly well until it became clear that such countries might then become strategic rivals, which is why the West now, once again, needs manual workers — both in factories and for transporting goods along long supply chains.

Yet, in the meantime, Western countries have been educating their populations for the high-end service economy. For example, in 1993, Germany had 1,775,661 university students. By 2021, that number had grown by a staggering 66 percent. Western countries have thus ended up with too many “academically” trained citizens reluctant to perform manual work, and too few people attending to duties like truck driving and garbage collection, which had to be carried out even at the height of globalization.

Now that these countries are welcoming the return of manufacturing, they’re facing the opportunity with not just a pervasive manual worker shortage but also a looming shortage of workers in the growing manufacturing sector. Europe’s energy decoupling from Russia is already facing turbulence for this reason, as 900 Norwegian oil-rig workers — already in short supply — have threatened to go on strike.

Individuals who have spent their school years being told the way to middle-class comfort and social respectability is through a university degree are unlikely to retrain for manual work. And as the academically trained who have tried manual jobs can attest: It’s hard work. When a few members of the Red Army Faction (also known as the Baader-Meinhof Group) joined West Germany’s laborers — on whose behalf the group claimed to wage its armed revolution — they gave up after only a few days.

But a lot has happened in the three-and-a-half decades since the West’s current round of globalization took off. And while the jobs that began leaving these countries in the late 80s involved a significant amount of physical work, the jobs now on the verge of returning will be highly technical and require considerable expertise. Just pay a visit to Germany’s car factories and see.

Indeed, it’s not a stretch to suggest that many of the manufacturing jobs now on our doorstep will involve more skill than a whole range of office jobs that require a university degree. It’s no surprise that Tesla has teamed up with local universities to train workers for the Brandenburg factory, or that in Arizona — which has set out to attract semiconductor firms reshoring production from China — the state has joined forces not just with companies but also with Arizona State University, which has launched a wide-ranging program to train individuals for the well-paying jobs now arriving.

Workers were always more skilled than the university-educated gave them credit for, and as manufacturing becomes ever-more technologically sophisticated, those skills will only increase. Indeed, without workers able to operate the machinery needed to produce the sophisticated goods now too risky to make in China, we can kiss friendshoring goodbye before it has even begun. That ought to prompt many to reassess their attitude toward manual work.

Thus, schools and universities would do good to help students get work experience in the manufacturing sector, and those wise enough to see the value and skill involved in manufacturing should consider joining this workforce themselves. Simply put, the factory worker is back — more powerful than ever. I wonder what Karl Marx would have made of this twist of globalization?