US Manufacturing Isn't Dead, But its Jobs Are
ourfuture.org
ourfuture.org
You could make all the charts you want that show some vague correlation and dismiss my statements as anecdotal, but in some areas the jobs have just gone and the anecdotes represent the lives of real people.
The site linked to (ourfuture.org) is a progressive site, so I'll link to a conservative piece as a counter-argument. There has a been a significant difference in the manufacturing growth in right to work states vs forced unionization states: http://www.americansforprosperity.org/021909-right-work-and-...
While the site I linked to tries to make a single issue of it, there has been a large scale shift from the rust belt to the sun belt in the last few decades. Right to work vs forced unionization is one issue, but I'm sure that state taxes and regulatory policies played a hand as well.
I spoke to an American businessman that did some work in China and he mentioned that if you invented a new technology that was highly productive and removed the need for a lot of manpower, you'd have a tough time getting that pass the government. For them, having jobs for the 1+ billion Chinese is a top priority, even if they have to sacrifice some productivity to get there.
Productivity shouldn't be pursued at all expenses. Sometimes inefficiencies are good (see the U.S. political system of checks and balances, redundant systems in engineering). When the car industry/steel industry was bustling in the U.S., many of those lower-middle class workers bought homes, cars, televisions and created a market for financial and high-tech products. If this segment of society can't be integrated into the economy, I fear there will be long term negative impact on the demand for products that many of us here build.
Those aren't good analogies. The "inefficiencies" in the US political system aren't actually inefficiencies in the long run. They remove the need for revolutions/coups to depose autocratic rulers. Same thing with redundant systems in engineering - in the long run, they are the most efficient approach to the problem, as they reduce rates of catastrophic failure.
However, indefinitely preventing technology from advancing civilization is the exact opposite. For the short term "efficiency" of allowing those workers to keep their jobs, we are tolerating the permanent inefficiency of clinging to old technology.
I don't believe that there needs to be "a viable option for 'hands-on' people to earn a livable wage." Our ancestors all used to be hunter-gatherers, but we have somehow managed to survive in a world where hunting/gathering is nonexistent. It is the remarkable adaptability of the human race that has brought it so much success, and I believe we can continue to adapt to whatever new technology we discover.
I agree, and I could argue the same thing for maintaining manufacturing/vocational jobs. As I said in my first post, giving reasonable wages to the lower/middle class means they have more disposable income and consume more. I think this is a net positive economic effect. If a high net-worth person makes 10x the average wage, that doesn't mean she will buy 10 times as many televisions, ipods, or cars. She may purchase HIGHER QUALITY goods/services, but overall consumption from 10 workers making 40k per year and 1 high net worth person making 400k per year are not equivalent. This consumer demand from the lower-middle class ultimately creates markets and creates long-term efficiencies.
>However, indefinitely preventing technology from advancing civilization is the exact opposite
I don't want to cling to the past. But as our society progresses we must find ways to integrate hard working people that aren't the type to sit in a office all day. I think Germany is a good model. In high school, students are separated into a vocational track or an academic track. Because of this, Germany has a very highly skilled manufacturing workforce today.
>I don't believe that there needs to be "a viable option for 'hands-on' people to earn a livable wage
I disagree very strongly with this statement. There are more 'hands-on' people than 'intellectual' people in this country. If those 'hands-on' people can earn $25 per hour, then you can make your apps and devices and they will have enough money to buy it.
> There are more 'hands-on' people than 'intellectual' people in this country.
And once upon a time, there were more artisans than 'hands-on' people. When the Industrial Revolution occurred and a lot of artisan jobs were replaced by factory jobs, people made arguments similar to yours. But people have somehow managed to adapt, haven't they?
> I think Germany is a good model. In high school, students are separated into a vocational track or an academic track. Because of this, Germany has a very highly skilled manufacturing workforce today.
But because of their specialized training, the German workforce is relatively inflexible and has failed large portions of the population. There was an article in this week's Economist about this[0]:
> Even so, the system has flaws. Some worry, for example, that a stronger general education is needed to equip young Germans to change trades should demand for their specific expertise dry up.
> A bigger concern is that early selection fails children from poor and immigrant families, who are likeliest to attend the least academic schools and to miss out on apprenticeships. Partly for this reason, there is a large group of students at the bottom of the rankings—which explains why the German average is still below par. “It is a schooling system that has left a large fraction of students behind,” says Andreas Schleicher of the OECD.
We could accelerate this process by allowing income spent on salaries to pass through the individual - i.e., if you earn $200k/year and spend $30k/year on a butler, your taxable income is only $170k. This already occurs in limited cases - domestic labor is often paid in cash off the books.
In the long run, we may balance out to a world economy. (Or not.) But in the short term, we may disenfranchise entire generations of our population.
If it were truly a "free market", workers could follow the work. (Work -- the oft neglected other half of "the market".)
That is not the case, now. (And even if it were, income disparity would make it a one-way trip of separation from family and friends -- not that that's anything new.)
I agree, society presents -- and depends upon -- a diversity of mental and physical types, and excising an entire sector's means of gainful employment is a distortion to that balance.
You can have a country of gated communities and slums, or a country where you can walk down the street in safety and comfort. Which would you prefer?
I'm not sure there's a viable alternative to the way we're proceeding. But one should be ready for the consequences.
The "free market" doesn't care about deaths. (Some would argue they are an efficiency.) That's left to human morals and values. The hook being, again, what kind of community you wish to live in. One where you can enjoy the company of other people, or one where you fear it.
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Addendum: I meant to include the comment that "white collar" work is moving overseas (as compared to e.g. the U.S. and other "first nation" countries) more rapidly that many realize. Even the (non-ownership) bankers, lawyers, and other "management professionals" that were supposed to be this country's future, are soon -- already -- going to find themselves priced out of the market.
The need overseas to educate a generation in this work, and to have sufficient legal and regulatory stability, delayed this occurring. But those prerequisites are now falling into place. And why is someone going to pay 3 - 5 or more times as much for a U.S. resource, when they can get as good somewhere else?
True professionals -- the truly creative and proficient -- may always have a job, even if they have to move. But a lot of "value added" people are going to find that, well, they don't (add sufficient value, or have a job).
At least, not abroad. There will always be some domestic work. But, their fortunes will fall with those of those of the disenfranchised around them. No one's going to pay them outsize incomes to "manage the world".
I don't think everyone enjoys or is cut out for computer based or intellectual work and there should be a viable option for 'hands-on' people to earn a livable wage.
There were probably lots of people not cut out for factory work when the shift happened from farming to manufacturing. The big difference here that I think most people miss is that it isn't the change from factory to knowledge that's the problem, but the speed at which the change has happened. This speed of change has caught many older workers off guard, whereas in the past the change happened over a generation or two.
There's probably some good stuff to be repeated from "End of Work" (http://en.wikipedia.org/wiki/The_End_of_Work). Has anyone read it?
Yeap, but assuming you're a country with 20% unemployment that has a very high level of competitiveness, how do you deal with those young, unemployed people (they're mostly young) roaming the streets with nothing else better to do and with their pockets empty? What if they decide to topple the government, or to steal, or to do anything anti-social? They don't have anything to lose anyway.
Sorry for the NY Post link, I'm too lazy to find the original source right now, but here it is (http://www.nypost.com/p/news/business/item_AnwaWNOGqsXMuIlGO...):
""" The number of young Americans without a job has exploded to 53.4 percent — a post-World War II high, according to the Labor Dept (...) The number represents the flip-side to the Labor Dept.'s report that the employment rate of 16-to-24 year olds has eroded to 46.6 percent -- the lowest ratio of working young Americans in that age group, including all but those in the military, since WWII. """
I don't think the situation has improved that much since September 2009. And, like I said, I'm lazy, otherwise I would have found even worst figures from Western Europe countries.
They probably also pay somewhat more because Walmart doesn't care if they lose people to turnover, while a small store does. But that's not what's putting the small stores out of business.
Source? Turnover is a high cost to any business, and if there's one thing Walmart is good at it's watching expenses.
Walmart "cares" only in the very large aggregate.
Look there is no way to say this nicely, but if those people can't get over their issues of the lost paradise thats just too bad. There are plenty of hands-on jobs left: snow needs to be removed, toilets cleaned, windows polished, etc.
And no these jobs may not allow you to live a middle class lifestyle in 2010-2020, but they will allow you to live better than in the sixties.
Half of the houses then didn't indoor bathrooms and medical care for something like cancer would be a joke compared to what we can do today.
But hey lets all go and complain.
Theoretically correct, practically I'll side with the complaining people in this case.
It happens that I'm on a pretty favorable part of the curve (in terms of ability and inclination to "work with computers"), so take my thoughts with as much salt as you think is appropriate, but I'm glad past societies didn't turn their noses up at farming, beer and bread making, writing, indoor plumbing, domesticating animals, stonework, bronze, iron, steel, water wheels, coal/oil/nat gas, electricity, the steam and internal combustion engines, telephony, interchangeable parts and the moving assembly line, automobiles, modern medicine, transistors, integrated circuits, etc.
I'm sure that all of those innovations caused some significant amount of displacement amongst the established practioners of the "old way" of doing things. Had societies past decided that that displacement was too costly, the life of today's 99th percentile priveleged person would almost certainly be significantly worse than the life of today's actual 1st percentile (un) priveleged person.
Is the problem simply this? "Standard of living has dramatically increased for everyone (some more than others), but some people who only received large increases are jealous of the others who received huge increases."
This is completely orthogonal to the fact that a middle-class lifestyle today is better than it was 60 years ago.
If you define it in relative terms (i.e., "a middle class lifestyle is the lifestyle of the middle 40%), then by definition it is always affordable to the middle 40%. So this can't be what you mean.
Or maybe the problem is that in the race to be in the middle 40%, some professions have overtaken manufacturing, and this lowers the relative (but not absolute) lifestyle/status of manufacturing? (Though it's hard for me to see why that would be a problem, unless you are emotionally attached to some sort of caste-based ordering of jobs.)
This conveys the idea I have for a middle-class lifestyle. Hope it helps.
For the explanation of which people I mean I have to ask tomjen3 for help: He used "those people" in his argumentation and I've reused it.
See table 1: http://www.bls.gov/cex/csxann08.pdf
(The bottom 20% are a funny case - they consume about 2x the listed income figures. The reason is that income does not include welfare, so we have no way of knowing how large or small income really is for this quintile.)
Also i further disagree with the notion that it'll let you live better than in the 60s, for a variety of reasons including poorer access to nutrition, lack of public transport, and that society has shifted away from outdoor activities.
Based on studies [1], the above is simply not true. Wal-Mart has for example given more people access to healthy foods at lower prices than at any other time in history. Fresh vegetables and fruits can compete on price with less healthy alternatives at WM. Now, this doesn't mean people will chose them over a bag of chips (they study claims there is statistical significant evidence that people do though), but it has removed price as a fairly large barrier.
[1] http://www.thedailybeast.com/blogs-and-stories/2009-05-16/do...
This is an empirical question, we should probably find actual data to back it up.
As for your second argument you might be slightly right about nutrition (but only on average, its easy enough to live healthy for cheap as several members of this board have done) but the two other things? How does outdoor activities even fit into that?
So isn't the purchasing behavior, rather than the label attached to the consumer, what grows the market and increases business opportunity?
I.e., isn't it better for a modern day poor person to consume a house, a car, an AC and an X-Box than for a 1970's middle class person to walk to work, live in a smaller house, and suffer in the summer with no AC and entertain themselves with only a legacy mechanical music players?
[edit: better for the purpose of creating "business opportunity"]
Students do appear as a statistical aberration in most of these counts since they have no income, but they tend to have access to credit and fewer costs than those that are older than them (health care) or those with families.
So yes, you're right, but i don't think it matters all that much. Studenthood is a transient state which is designed to eject students after a period of time (and you have to fight really hard to stay a student). Poverty and destitution are the opposite.
Just in case anyone gets a wrong impression of life in the 60s, this is not true.
Sorry if it seems like nitpicking, but as a non-native English speaker I find it weird how often this issue comes up. If any native speaker here has any idea why this particular mistake is so prevalent, I'd be very interested.
Even when composing a title with capitals, not all words should be capitalized. Setting "isn't" and "its" in lower-case makes the title easier to read and draws the eyes to the capitalized words that convey more meaning.
English is a "living language," which means that it sometimes grabs a beer, goes out back, has a smoke, and vomits in the gutter.
Changing times and philosophies.
Even hitting the original homepage for the data isn't very helpful (at a cursory glance): http://research.stlouisfed.org/fred2/series/INDPRO
What counts as being manufactured in America? Does US assembly of parts made in other locales count?
Because if it were to be the case that automated assembly of things made in China count, then productivity/efficiency could be seen as increasing, even though the majority of a product was created and built elsewhere.
Anybody know?
Even if the absolute numbers of manufacturing jobs had remained steady from the 1950s to the present, the stagnation in absolute numbers would simply be hiding a rather large relative decline.
We are still a manufacturing powerhouse, but we are no longer adding manufacturing jobs. In fact we can make the same or greater amount of goods (by value) with the same amount or fewer manufacturing employees.
So the perception is that U.S. manufacturing is in decline, because the number of manufacturing jobs stagnated from the 1950s to the 2000s. But those are only absolute numbers. The real story is that by the 1970s already U.S. manufacturing was perceived as being in decline. I'm speculating that we could understand the provenance of that perception by looking at two more graphs: percentage of workforce in manufacturing, and percentage of workforce in (industrial) unions.
Why do these two graphs serve as good indicators of the nation-wide perception of manufacturing decline? The first because the relative share of jobs held in manufacturing is just as important as the absolute numbers in terms of social weight, clout, and awareness. The union chart more specifically would show the decline in political-economic clout held by people in the manufacturing sector, most precipitously (I would speculate) in the 1980s. Without fresh members, closed shops, local chapters, and substantial union bloc voting, the socio-political place of unions in the day-to-day fabric of American life begins to fade into the background.
So, whatever one's politics toward organized labor (present or historical), I think such a chart would be illustrative of why there is a popular perception that "U.S. manufacturing is gone."
My take on this is that human abilities are normally distributed, and the average employable person lies right at the mean in ability. Technology, on the other hand, started at the far left of the ability curve and slowly began automating the most menial tasks. Over the last century, the mean technological ability line has inched ever closer to the mean human ability line, eliminating otherwise employable people from the market along the way.
You don't have to be a Singularitarian to see that this line has already caught up to the mean human ability, as evidenced by the blue collar recession we have experienced recently. The problem is that about 68% of the human population lie within one standard deviation of the average. If you look at the income gap data, it appears there is a divergence occurring in job demand, where only the high skilled and certain non-automated low skilled jobs are in demand. The big fat middle of the distribution appears to have been automated, hence the lack of demand for blue collar jobs and the structural unemployment we see today.
I would be curious to hear HN's opinions on how to deal with this issue. I am at a loss, as the foundation of the issue is based on the non-malleable human ability distribution and the ever accelerating pace of technological efficiency.