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High Oil Prices Brings Back Some US Jobs

In recent months Americans have felt the economic pressure caused by record high oil and gasoline prices in the U.S. But now there may be a positive benefit to that financial hardship: new jobs. In the past 10 years, economists say an estimated four million manufacturing jobs have been lost in the U.S. because it was cheaper to make things overseas. But with the cost of energy and shipping escalating, some companies say "Made in the USA" is starting to make more economic sense. VOA's Mil Arcega reports.

A Texas businessman says one way to help the U.S. economy is to stop sending American jobs overseas.

Farouk Shami operates a billion dollar haircare company that makes more than a thousand different products. His signature line is called Chi.

Most of Chi's haircare products are manufactured in Houston, Texas. But other items sold by his company -- such as flat irons and blow dryers -- are still made in China and South Korea.

Not for long. Shami says he plans to shut down his manufacturing operations overseas and bring those jobs back to Texas, "Just close it. Forget about it. Charity starts at home and our people need the jobs more than the Chinese and the Koreans," he said.

Shami says the move will create about 1,000 well-paid, full time jobs within a year. "We like our people to be insured," he said. "We like our people to be better paid, that's what brings loyalty to the company."

The same thing is happening, on a smaller scale, at a North Carolina furniture manufacturing plant. Because of soaring transportation costs, factory owner Casey Hearn says it's now cheaper to hire local craftsmen to build his furniture designs.

"In December, we had three employees here. We were just getting set up. Now it's 14," Hearn said.

Economists say shipping products from other countries made sense when oil was $20 a barrel. These days, a 40-foot container -- that used to cost $3000 to ship from Shanghai to New York -- now costs about $8000.

Some U.S. companies are also finding it's more cost effective to manufacture in the U.S. some goods destined for American consumers.

Economist Jeffrey Rubins says high shipping costs could benefit the American steel industry, which used to maintain large fabricating plants in industrial cities like Pittsburgh, Pennsylvania.
"When you have to shift iron ore from Brazil to China to make steel and then ship it back to New York, Pittsburgh's looking pretty good," Rubins said.

While Americans earn a higher standard of pay than workers in other countries, bringing jobs back to the United States would not necessarily mean higher prices for consumers. For example, Shami says it takes 70 people in China 20 minutes to make one of his flat irons. Using automation, he says the same flat iron takes five Americans about five minutes to make.

Shami says the challenge is convincing other companies that 'Made in America' makes good business sense.