Why manufacturing jobs aren't coming back to the U.S | Hacker News Reader

Why manufacturing jobs aren't coming back to the U.S

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43 pointssmaili50 comments

It is interesting seeing how hard this assertion is being pushed in some area for political purposes. Especially as it counters another message coming from the same groups. I am not sure how the two can be reconciled. (note: I am neither advocating or criticising the below)

1. We need mass immigration to keep up growth

2. Robots and AI are coming to take our jobs, so get used to it.

Many in politics, think-tanks and media sphere seem to be pushing both quite heavily, especially 2. Both are being memed into public consciousness, but by who and for what purpose I don't know.

I have not thought it all through, but surely if you are expecting higher unemployment supported by a welfare state you would want a smaller population? Both present a (perceived or real) threat in the minds of the working class and a somewhat contradictory message. It is easy to adopt a conspiratorial mindset on this in the belief that the public are being groomed for mass unemployment and to accept further exacerbated social inequality.

> Many in politics, think-tanks and media sphere seem to be pushing both quite heavily

Can you please provide prominent examples where the same actor is pushing both narratives?

> Artificial Intelligence, Automation, and the Economy

https://obamawhitehouse.archives.gov/blog/2016/12/20/artific...

Summary: AI and automation will "disrupt" millions of low paying jobs

> The economic benefits of fixing our broken immigration system

https://obamawhitehouse.archives.gov/sites/default/files/doc...

Summary: More humans means higher GDP and larger labor force

edit: Tons of examples in ${Your_Favourite_Newspaper}. A lot seem to just push out government and think-tank pieces from upstream.

This is not really a contradiction. Automation will indeed replace humans in millions of jobs, low-paying and otherwise, but until that process reaches a critical tipping point, we still have a country to run.

There's no contradiction if you don't assume that the skill level of the workforce is fixed. The first paper cited concludes that the government should invest heavily on better education & training and should ensure that there is a pathway to retraining with these new technologies. The second paper suggests that immigration is needed to bring more highly-skilled and highly-educated workers to the U.S. Both of them center around the need to increase the overall education & skill level of the U.S. workforce.

If you have no desire to learn new things, then yes, you will be in a world of hurt in the new economy. If you do, there are abundant opportunities for you.

> The second paper suggests that immigration is needed to bring more highly-skilled and highly-educated workers to the U.S.

That aspect is indeed covered, however you will notice is a small constituent of what was proposed. Much of the bill is focused on the increased labor participation for low-skilled work (also includes protection for the skilled US jobs, countering that original point) as well as the increased GDP expected due to more people to provide loans to etc. Also, put it in context of the distribution of skill level in the jobs filled by immigration.

Any of these papers can be quoted to support either side tbh, it can be quite hard to decipher and see the bigger picture.

On the left: The Brookings Institution

https://www.brookings.edu/opinions/in-defense-of-immigrants-...

https://www.brookings.edu/opinions/u-s-manufacturing-may-dep...

On the right, the Wall Street Journal. (paywall thwarted my quick attempt to get links)

Seems like the biggest issue is that employers are not willing (rather than unable) to re-train a workforce to be competent at new jobs, or to make the jobs attractive enough for people to want to work them. The answer from cops very often is the imported supply of labor.

If we can presume that the skills currently available in the workforce do not overlap with the skills demanded in the workplace, re-training would both benefit the underemployed as well as companies. Sadly, re-training is not often seen as a solution.

China's middle class will rise out of their oligarchy in the next 100 years and then you will have the largest cultural middle class cluster the world has ever seen. Then all that cheapo labor will come from somewhere else. I personally think this is irrelevant, the US doesn't need any more toxic waste dumps (a.k.a factories).

The truth is MFG is not what the US needs to be doing, the US needs to be working on automation and permanent systems design related to agriculture.

F* making some future recycling nightmare in the form of a fashion accessory and telecom unit, we need to be figuring out how to actually feed people on a massive scale without dumping phosphate and nitrates and plastics into the ocean, we need to figure out how to avoid the massive and unsustainable aforementioned supplies of chemical inputs required to sustain the BS process that is modern plow and sow automated factory farming. We need to shift the global food diet away from beef and other carbon nightmares and into more localized food sourcing.

This is going to require robots, and entirely new disciplines combining agriculture, industrial/agricultural/robotic engineering, and systems design.

Do you think anybody is going to give a shit about the iPhone 12 when half of the world is eating itself alive in the Water Wars of 2030? I doubt we will be as extravagant in our tastes when that new world order arrives.

tl;dr who gives a shit we have bigger fish to fry (or none really because they all died in toxic algae blooms)

The Malthusians don't have a great track record. Every time someone predicts that we're going to run out of food and starve to death, we just get more efficient at producing it, with greater yields on less acreage, with less labor.

There is so much under-utilized, fertile agricultural land it's not funny. We're still paying people not to grow crops on it.

Also don't forget that 40% or some horrifically large proportion of food produced is wasted. That's a great deal of scope for slack.

Gratuitous plug: We hope to increase distribution and preparation efficiency @ http://8-food.com/

Agree agree. Misuse of resources is the key problem. New systems required.

Black Swan fallacy. And I never claimed to be Malthusian so please leave your tar brush at home.

Also you may note that my criticisms are aimed directly at the current broken systems under utilizing and abusing our agricultural and water resources. We absolutely have enough land and water to go around, but the way we misuse it is going to have the extraterrestrial archaeologists digging through our powdered bones and plastic wrap shaking their heads in sadness.

That's fallacious thinking. Just because someone made incorrect predictions doesn't mean that the trajectory is incorrect. Clearly, at some point along the path of exponential population growth we will experience diminishing returns in the yields of engineering efficiencies. Ultimately, we really are dealing with a zero-sum game.

~"even if they come back, it will be robots" - it fascinates me that people trying to make the case that the jobs will never come back rely on this line. They leave off the other half, which is that _manufacturing_ can come back, with some jobs, just not with as many jobs as before the loop closed.

So, yes, it is basically true, but it is also misleading. The jobs aren't coming back to China, either, or anywhere else. And this isn't new at all: https://www.youtube.com/watch?v=sT6aphdX0rI

The thing is that _manufacturing_, as a sector, never left:

https://fred.stlouisfed.org/series/OUTMS

By output, U.S. manufacturing has had a steady upwards trend, interrupted (as you would expect) by recessions. It's just that the jobs left. The narrative that manufacturing as a whole went overseas isn't really true; it's more that labor-intensive manufacturing industries moved overseas, while automated manufacturing industries (or final assembly plants) sprung up in the U.S.

Yep, it is scary that many people don't know that US manufacturing is at all time highs.

The package says made in China. Some parts may come from the US. The machines that make the parts may come from the US. But at the end of the day if you walk down any aisle in a big box store almost everything will be stamped with made in China.

Broadcom and Intel still manufacturer chips in the US but the laptops it's packaged in is still shipping from China.

People are judging by number of jobs, not the fed calculating output. I think that's more rational than scary.

Manufacturing is so broadly defined at the Fed level it isn't really useful in this context. Electronics manufacturing left, furniture manufacturing left, etc.. What didn't leave is the fossil fuel industry, So oil refining, and fracking related businesses helps keep manufacturing output high in dollar terms. But manufacturing as people casually think of it (factories making a product: phones, cars, computers, solar panels) really has left.

Also still here: defense, aerospace, rocketry, construction, machinery (eg. Caterpillar). Basically light industry left and most heavy industry stayed, the output of the latter grew, and now some light industry is coming back (eg. textiles [1]), but with basically fully-automated factories that employ very few people.

[1] http://www.nytimes.com/2013/09/20/business/us-textile-factor...

Defense, aerospace, and rocketry are all good examples of industries that are here due to government and trade policy, not because it is cheaper or easier to build a tank in the US.

Then they should think less casually.

I've been in industry for almost 30 years. All the companies I've worked for were US owned and US based and they all did manufacturing of some sort. Including my little side-businesses.

Yes. Low-margin consumer goods like cheap toys & appliances went overseas. But cars, heavy trucks & coaches, specialty tools and industrial equipment, medical devices, high-end office machinery, manufacturing machines (heh), industrial electronics, robots, are all being made in the US.

An earlier comment alluded to labor-intensive manufacturing going offshore. I'd qualify that as "low-skill" labor intensive manufacturing. At my last job, my office was directly above the manufacturing floor and that assembly was very labor-intensive and definitely not low skill in terms of "pick up doll's body in left hand, head in right hand and plug head into body" .

The reason that is, is because the idea of bringing back "manufacturing" implies that it'll bring back the jobs as well. That bringing back "manufacturing" means all those people who lost their assembly line jobs will get it back, and things will go back to how they were. That's the reason it keeps getting evoked.

So the other line has to keep being stated, because it needs to be known that bringing back "manufacturing" isn't going to solve the employment problem for those people, and more needs to be done.

(I kept putting manufacturing in quotes, because those that tend to talk about bringing it back generally downplay the fact that manufacturing output in the US is at an all time high.)

A remark worth making is that not every manufacturing job can be done by someone who can write down their name and recite the alphabet. That's just entry-level assembly work, or some very specific, repetitive task.

Certainly not highly skilled traditional manufacturing jobs, like machining and the like.

Making almost everything requires skill; certainly making it well. Assembling certain pieces may be something easy that anyone can be trained to do, but not necessarily making those pieces.

One reason manufacturing won't come back to a given area is that the people who know how to do that are retired, or dead, and their grandkids don't know how to do that sort of work.

It's not just about money.

I don't think labor in China is as cheap as it used to be. Choosing as an example an entry-level assembling job that requires no skill other than reciting the alphabet is rather a cherry-picked example. That's not going to pay well anywhere.

Skilled people aren't going to work for peanuts just because they are located in China. Or if they are, that won't last for long.

I've worked for a steel manufacturer for a short time, it was an interesting experience. I liked the idea of doing some lower level coding. Most of the people who worked in IT had been there for over 30 years. People who'd been there for 10, were still newbies. The cool aspect of it, was their willingness to listen to anyone who had innovative ideas, because it often came from workforce on the line. What scared me, was the lack of anyone under 50. It felt like there was no investment in a future because they didn't expect one.

I work in public policy, so I'll just weigh in on that aspect for a moment: Manufacturing jobs won't be coming back to America because of various environmental and labor laws.

It started with the unions, and labor laws, and in response companies sought ways to reduce labor costs. They looked where labor could be had cheaper, with less restrictions.

Then environmental regulations kicked in and companies sought to reduce those costs, etc. The results? Manufacturing moved overseas to places like China, where there are few environmental laws, labor laws, and the cost of both are way down.

Manufacturing, especially on the scale that can move an economy, will always be up against those two paradigms: Labor and Environment. In theory, as long as strong protections exist for those there is zero incentive to large-scale manufacture in America.

Of course, the government can further intervene by e.g. imposing import tariffs on products that are manufactured in countries that don't have labor and/or environment laws that don't match or exceed the baseline provided by US.

They could, and probably should, but then we run into the possibility of a zero sum game. First, that is pretty much all of the countries which produce our consumer goods, and might I add, buy our debt. Second, the CEOs of those companies are going to get really pissed if their products go up in price. So they'll retaliate politically, but also pressure the other country to raise its tariffs on our exports.

Speaking policy only, an option to take is to make it cheaper overall for companies to manufacture here. Define a set of industries you want back in America, and reduce or eliminate their corporate income tax based on a certain number of employees and plants. Then even with the environmental and labor laws in place, they'll still see it's more economically feasible to return.

https://ustr.gov/countries-regions/china-mongolia-taiwan/peo...

US exports to China is $116 billion, imports is $485 billion.

Top export categories : aircrafts, electrical & other machinery, soybeans (never thought $11 billion), vehicles (same as soy beans $11 billion).

I think, improving exports is the best way to create jobs in US.

If it were true that manufacturing jobs aren't coming back (and it isn't, at least in the short term) it would still be worth it to move the supply chain back to the United States. If the future is automation, then lets do that automation here, get the knock on effects of automation engineering, automation maintenance and the general innovation we see in production-oriented (rather than consumption-oriented) economies and then share the generated wealth via whatever means are politically acceptable. (I favor public works via debt-free money, but I'm willing to listen to anything.)

Selling our kids into debt slavery and a jobless future is not an option. The service (really, the consumption) economy is built on a mountain of unpayable debt. It has to end, but the right is too wedded to free market ideology and corporate donors, while the left is too wedded to international universalism and, strangely, mainstream academic economics.

Nobody is saying that we shouldn't still try to get those automated manufacturing jobs back here. Just that bringing those suppliers back here isn't going to lead to the awesome manufacturing jobs that once existed, and we're going to have to do something else to help those who are getting displaced.

The jobs are even more awesome - higher skill, higher pay. Just that there are many fewer. Still worth bringing the back.

That's what I said. But I also said that we have a LOT of people who we still need to do something for, because, as you agreed with me on, there are a lot fewer jobs.

Let's say the average factory before all this started took 100 people to run (making numbers easy). Now, after all of this, and the rise of automation, how many people do you think that factory is going to need? Probably about 10% of that. And for those people, it's great, and we should try to get more manufacturing here to encourage that. BUT, we still need to have a plan for the other 90% of people who aren't going to get those high-paid, high-skilled jobs. They haven't gone away. They still have families to take care of.

I agree entirely with you on the urgency of figuring out productive jobs for people with IQs on the left side of the bell curve. Jordan Peterson has a very good video on this[1]. I would couple this with a concern that we end (or, dare we dream, reverse) the dysgenic social policies we currently have in place (IQ is 50-80% heritable).

In the short run, we need to work to move the production chain back to the united states, and that will generate some manufacturing jobs. I suspect more than the corporate-interest controlled media will say, but it almost doesn't matter if we are playing the long game for our kids.

[1] - https://www.youtube.com/watch?v=fjs2gPa5sD0

Interesting point of view from the labor side. I wonder if there is a bit of technological curve the US doesn't have as well in design and setup of manufacturing facilities. let alone the machines that make machines.

Not really. You can find pretty much any skill you need here. The only real issues are (a) how much you pay for it and (b) how much of it there is. b drives a :-)

For a while, there was a fellow on a machining/manufacturing site I frequent who was getting textile manufacturing business going in LA by automating the living hell out of it. I believe he had purchased a failed business and figured out he could make money by automating everything he could and having a small labor force to do the things that were too difficult/expensive to automate. Like most people, he stopped posting after all his problems were solved (about 3 years ago), but it was an interesting read for a few months.

I was under the impression that import tax would be used to balance the cost.

A 100% import tax on iPhone imports would force Apple to move production to the USA.

I don't imagine he has the political clout to make it happen.

This is unrealistic. A 100% import tax on Chinese electronics would result in a 100% import tax on American pork, for example, going into China.

It would take years for Apple to get the supply chain necessary to make their products in America. A better strategy for Apple would just be to wait for a more friendly administration, or use political leverage and lobbying money to get the law repealed.

There is no scenario where tariffs would result in iPhones being built in America.

You are right, it is probably too late now. But tariffs might have prevented the supply chain from moving or being established in China in the first place if they had been in place ~20 years ago. And while unrealistic, there might be a scenario now that would work: some slowly escalating tariff over a decade that would allow time to deal with the supply chain issues.

I never quite understood how imposing import taxes/tariffs is seen as being good for your own population / bad for manufacturer.

To my extremely simplistic view:

* If I live in country A

* My government imposes taxes/tariffs on goods imported from country B

= MY cost to purchase said things I want just went up.

Long term, this may or may not have impact on the manufacturer/Country B.

Immediate term, my life sucks a bit more because of my government.

How/Why are masses so enthusiastically responding to all the populist promises (in USA right now, but around the world in general) to raise taxes on imports (which still goes in the category of "taxes I pay on things I want to buy), when they respond so negatively on raising taxes on anything else??

> To my extremely simplistic view: * If I live in country A * My government imposes taxes/tariffs on goods imported from country B = MY cost to purchase said things I want just went up.

Please correct me if I my own simplistic view is incorrect, but is that not the reason why foreign product costs are so high in Australia as well?

The idea is that because the manufacturer's costs also go up, there's no longer any reason for them to manufacture abroad, and the same goods are manufactured in the country instead. So while their prices are higher, the workers that make them are also paid more (and, perhaps more importantly, are paid at all, on account of having a job). And furthermore, that money remains in the economy of the country imposing the tariff. Ideally, the end result is that more people overall can afford that iPhone, for example, even if the sticker price is higher.

To what extent this works in practice is another matter. But I would posit that the notion that's common nowadays that tariffs are always bad is just as simplistic as wrong as the notion that tariffs can fix all problems. It all boils down to the specific numbers.

Not necessarily - it would likely just be passed along to the consumer, so that iPhones in America would cost double what they do in China. There are more consumers in China than in America, so if Apple's forced to choose between manufacturing in America and getting taxed for every unit they sell in China vs. manufacturing in China and getting taxed for every unit they sell in America, they'd pick the latter. American iPhone buyers tend to be relatively price-insensitive anyway.

Are there really a lot more consumers that can afford an iPhone in China?

Not that jobs necessarily should be the end goal.

While people still need to buy food and clothing, and pay rent/mortgages, yes, they should be.

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