Opinion:... ..., Hillary and Bernie are lying to us about those lost manufacturing jobs

Market Watch ^ | May 12, 2016 | Michael J. Hicks

[expat_panama]

Most, if not all, of those manufacturing jobs are gone because of better technology, not Mexico

As the primary season progresses,... ...candidates continue to peddle some version of a promise to “bring back jobs and manufacturing to America.” Voters clinging to this hope need to steel themselves for a letdown. Here’s why.

No matter how you measure it, 2015 was a record year for manufacturing...

...Manufacturing employment peaked nationwide in 1977. Since then... ...makes twice as much “stuff” in an hour as he or she did in 1977...

...In the 1930s, more than half of American household consumption was in manufactured goods... ...Manufacturing now accounts for only a third of family consumption.

These are simple facts...

...candidates blame the North American Free Trade Agreement, but could Nafta cause these job losses? Nafta was implemented in 1994, so if Bernie, Hillary and...

...are to be believed, American firms must have anticipated Nafta by some 20 years (so much for all that short-term thinking on Wall Street).

For every manufacturing job lost since 1977, we have had nearly 10 created elsewhere....

...trade also creates jobs. We have 7 million more transportation and logistics jobs alone...

...The “bring jobs back” promise is simply fiction... ...graduate degrees in robotics laboring in Palo Alto, Calif., West Lafayette, Ind. and Boston are to blame...

...look at any online help-wanted listing in Indianapolis, where Carrier Corp. (part of United Technologies Corp. UTX...

...the real concern is finding enough manufacturing workers to fill existing demand.

The demagoguery on manufacturing employment is most un-presidential and readily contradicted by easily obtainable data. Candidates cannot bring jobs and production back from overseas, since they didn’t go there in the first place. Voters looking for a return to the 1960s economy richly deserve the bitter and lasting disappointment that awaits them.

[PLMerite]

You mean it won’t be fixed by the workers seizing the means of production in the name of the people?

[Dave Wright]

The basic premise of the article is valid. Technology has increased the productivity of the average worker enormously and made it possible for companies to get more output from fewer workers. Trade agreements have enabled the off shoring of low to medium skilled assembly work to countries where wages are relatively low such as Mexico. My real concern is the notion that the average American will simply retrain to do the higher skilled jobs of the future. These jobs will require cognitive skills and advanced training that exceed the capacity of the average worker. Our society is reaching a point where a small priesthood of technical wizards aided by a cadre of robots and 3rd world sweat shops will be all that is needed to sustain the manufacturing economy in developed countries. What will the vast majority of humans do that do not own/rent the technical means of production to earn a living? Will we just tax production and redistribute wealth as tax credits or reverse income taxes? What are the moral implications of the course we are on?

[biff]

Exactly. The main questions are:

Why are American auto and auto parts factories relocating in Mexico as well as other countries?

Why are Japanese as well as European car manufacturers building factories in America? And when they do why do tens of thousands of Americans line up to apply for those jobs?

Perot was right and the middle class of America is paying for it.

[expat_panama]

...it didn’t disappear because of “robots.”

There are two things we might want to understand here.  One is that the article doesn't blame "robots" for "stolen factory jobs. Folks with graduate degrees in robotics laboring in Palo Alto, Calif., West Lafayette, Ind. and Boston are to blame."

The other thing is that we need to understand what folks w/ degrees in robotics build.  

 

←they don't build stuff like this...

 

...they design these things: ↓

WENDY’S ANNOUNCEMENT that it will deploy self-service kiosks across its 6,000-plus restaurants like the one abovebytheendof the year should benosurprise to thosewhounderstand theimpact ofminimum-wagehikesonjobs. As the government makes employing unskilled workers more expensive, robots and other job-killing machines become more economically feasible. A bill to raise the minimum wage to $15 should be called the Robot Full Employment Act.

[expat_panama]

...I applaud your dedication and effort...

LOL --you're very kind not mentioning "results"!!!  Hey, I'm having a good time if you are ;)

[bert]

not to worry..... results are a lagging indicator.

Results may not be known for a long time. Results are often difficult to measure.

[Let's Roll]

Remember those overpaid union jobs will only produce items that are over priced.

It ain’t gonna be the same.

Can it be better than it is now? I sure hope so.

[spintreebob]

There are many reasons for changes in an economy... in a local economy... in a national economy ... and in a world economy. Here is a discussion of just one or two of the many factors involved.

In the 1950’s Chicago to Rockford was a hub of the tool-and-die industry and machine shops that made machines for factories worldwide. There was massive export of their product. But much of the product was used locally in the midwest.

These machine shops required workers with a good grasp of math, especially 3D geometry. Many of the workers were immigrants (legal and illegal) who spoke little English but were strong in math.

But as the 60s and 70s progressed, the education system of Northern IL was taken over by the JohnAnderson/LynnMartin type Republicans. That education system produced high school graduates who could not do math.

The tool-and-die/machine shops were unable to find competent employees. Gradually they relocated to Japan, Korea and other places. They pre-ceded the movement of their customer factories to Asia. It was only natural that the factories be located close to their supply of equipment. This became especially true as the pace of life and product cycle became faster and faster.

Consider now. Suppose you want to start a plastics factory in the US. Your plastics factory will need extrusion molding and compression molding and other types of equipment. Where will the plastics factory find a supplier company to supply that equipment?

Consider Mexico also? what percentage of the equipment in a Mexican factory comes from tool-and-die/machine shops in Mexico? Korea? China? Japan? Taiwan? the USA?

There are other factors, of course. The cost of regulation is heavy overhead. Taxes are an issue.

[semimojo]

When a Ford, the great American company, makes any of its autos or trucks elsewhere, those are lost jobs.

Do you have a problem with BMW making cars in North Carolina?

[semimojo]

North Carolina's textile industry didn't disappear from the state because of robots

Would you rather have North Carolinians making tee shirts or cars?

You can shut down trade and keep the textile mills, but you won't have the BMWs.

[IM2MAD]

Off topic but I wish someone would ask Bernie what he thinks caused the mass starvation in SOCIALIST Venezuela where they’re eating cats, dogs and pigeons. And the inflation rate tops 500 percent.

Google Venezuelan starvation.

[SaraJohnson]

enrich the establishment politicians in Washington.

---

And the multinational corporations.

[Smokey Stover]

American businesses make more, with fewer workers. So do companies in Japan, China, Mexico, Germany, and Sweden. All of them will continue to make even more, with even fewer workers.

I don't see the trend being reversed. No one is going back to this:

[Ozark Tom]

The vast majority of humans otherwise without means may find themselves faced with employment within an entertainment niche. Let's hope better than bread and circuses.

[Ozark Tom]

1: labor costs

2: energy costs

3: only game in town

[Ozark Tom]

If automation really-really pushed down the costs of manufacture, then more product would be in reach of the consumer. More of everything for the same cost input. To foster economic growth locally, the manufacturing profits would have to invested locally to maintain the consumer base.

[ZULU]

You can’t dispute facts. Government taxes and looney regulations are only part of the explanation.

[biff]

1. No. American labor costs are American labor costs whether it is a Ford factory or a Nissan factory.
2.No, energy costs? Give me a break, if that was the case Nissan etal would be building in Mexico, not America.

Try again.

[Pollard]

And how on earth can it be cheaper to box up an alternator, ship it down to mexico to have a person spend 15 minutes labor on it, box it back up and ship it back to an auto parts store in the USA than to just rebuild them here?

[Oatka]

North Carolina’s textile industry came from Massachusetts because it was easier and cheaper to exist in the South than unionized Yankee land.
So, North Carolina lost the business for precisely the same reason as it got it in the first place.

Indeed, but the money earned at those jobs was, for the most part, spent in America, not oveseas. Also the technical skills to maintain machinery stayed here as well.