Posted on 01/19/2015 2:42:11 PM PST by CutePuppy
All the talk we hear about a manufacturing renaissance in the U.S. is just that — all talk. That's the conclusion of a new report from the Information Technology & Innovation Foundation entitled "The Myth of America's Manufacturing Renaissance: The Real State of U.S. Manufacturing." As Adams Nager, an economic research assistant at the foundation and a co-author of the report, says, "A lot of what's in the news [about a revival] is based on anecdotes; there's very little real data."
A look at job and factory numbers between 2007 and 2013 should put to rest any thoughts about a boom in U.S. industry. The report quotes the Reshoring Initiative, which calculates that between 2007 and 2013 a net two million manufacturing jobs were lost, and some 15,000 manufacturing establishments. And the jobs picture hasn't improved much. The Reshoring Initiative estimates that about 30,000 U.S. jobs are now leaving each year, the equivalent number that are coming to U.S. shores.
Moreover, the value-added of U.S. products has actually fell by 3.2% from 2007 to 2013, while gross domestic product advanced 5.6%, according to the report. "If the manufacturing sector were holding its own, you'd expect to see it match up to GDP," says Nager.
The report concludes that whatever gains made in manufacturing since the Great Recession have been purely cyclical, rather than structural, with the manufacturing trade deficit still a whopping $458 billion at the end of 2013. Labor productivity is advancing in China at an annual rate of 8.5% compared with a 2.5% rate in the U.S. Perhaps that's because China bought 50% more robots last year than we did.
(Excerpt) Read more at online.barrons.com ...
Might be of interest to your ping list?
Author is Robin Goldwyn Blumenthal (please fix the author field if possible)
It really would be simple, though not easy, to fix the American economy. The problem in one word is “regulation.” Every governing body is regulating the life out of industry. The EPA, Labor Department and a plethora of taxes, fees, assessments, levies, etc. All of this exists to feed the leviathan of government agencies, employees and benefits packages. It’s not just the cost of, say, hiring an inspector empowered to shut a businesses’ doors. It’s the cost of his benefits for the rest of his life.
It's also a huge problem afflicting most of Europe; in particular, it's suffocating and corrupting business in Italy.
From the same article: "Banks are under assault. We have five or six regulators coming at us on every different issue. It's a hard thing to deal with." - JPMorgan Chase CEO Jamie Dimon, on an earnings call
Oh, the numbers are probably true, it's just that instead of trained chimpanzees (goonions)...robots are doing the work. 24/7, no meals, smoke breaks, coffee, no vacation, wages, pension, benefits etc etc etc.
Bots are funny that way... have been doing this since Industrial Revolution. Ned Ludd was not happy.
absolutely, tx!
Myth. Large cap manufacturers LOVE regulations it keeps the riff raff out and lends and excuse to offshore, a fig leaf. A win win situation for tme. Lose lose for the American people.
You obviously don't work in manufacturing because you don't have a clue...
I have worked in heavy manufacturing for over 30 years.
Prior to that I worked for a state regulatory agency.
There are quite a few federal regulations that were written
in such a way as to create a “barrier to entry” for competitors.
There are many examples where:
if you had such-and-such equipment
that was installed prior to such-and-such date
you were exempt from the regulation.
Big government and big business
have been in bed with each other for a long time.
as the article admits, the rate of offshoring has become a trickle instead of a flood, in fact many of those same jobs have been “other shored” from China to cheaper places like Thailand. Based on rising labor and freight cost vs the increase in US productivity that argue for keeping jobs here, the rate of reshoring continues to increase:
So they’re like, “bringing back American jobs, now”.
Many things go into consideration whether to re-shore or stay or move within Asia or Eastern Europe: cost of labor, cost of transport (if goods are made for re-import), taxes and administrative / regulatory cost.
Another big issue is that much of the money (near USD$2T) are not only generated but also stay in Asia / Europe, because of the huge US corporate tax on repatriated money which companies would need to hire in the US.
Yet another issue is that this 2013 article talks about a specific impetus for jobs re-shoring, i.e., fracking. That's not quite regular "manufacturing" (most of the jobs in energy sector qualify as "service") and, now is not a good time for fracking / energy industry, with layoffs across the board in "manufacturing" and "service" until the next boom.
Also, freight cost is going to be substantially lower for a while, for the same reasons. So it's been a trickle of re-shoring and off-shoring recently, to a virtual net zero. Large and medium companies are looking at the rise of new "occupy" / "higher minimum wage" / NLRB "franchise / corporate" initiatives and rules, and are not too anxious to start a lot of hiring in the US.
“heavy manufacturing” what?
So you were being paid to be part of the problem that you dismiss as Big Business' friend? That doesn't mean you were "in" manufacturing. You were paid to be part of the problem...
Visit K street and get back to me.
Prior to that I worked for a state regulatory agency
Like I said. You were part of the problem and you want to blame the manufacturers. I notice you didn't answer my question about your "heavy manufacturing" experience. Couldn't tell me what you "manufactured." Just that you were a part of that regulating authority. Yea. A real expert.
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