C'mon, we lose jobs and the standard of living goes up?
Posted on 07/28/2016 5:37:52 AM PDT by expat_panama
Did you hear that U.S. manufacturing just had another big month? That output has risen about 20 percent in the past six years? That industrial capacity is actually expanding?
Probably not. At most times, and especially in election season, the talk surrounding U.S. manufacturing is one of relentless decline: a loss of jobs, the shutting down of factories, increased competition from foreign countries, a global war in which the U.S. seems to be on the losing end.
And of course, it’s true. At some level, manufacturing has declined dramatically — as a direct employer of American workers. According to the Bureau of Labor Statistics, 12.3 million Americans had payroll jobs in manufacturing in June. That’s down about 30,000 from June 2015, off nearly 1.9 million from June 2006, and down 4.9 million from 1996. In the past 20 years, in other words, America has shed 28 percent of its manufacturing jobs. In good times and bad, in recession and expansion, the manufacturing sector employs fewer people. It’s impossible to dismiss or talk around this trend.
But the decline of employment isn’t the whole story. Not by a long shot. In fact, in many significant ways, U.S. manufacturing is thriving. The point of manufacturing is to make stuff that people and companies will buy and use, not to employ people to make stuff. And by the former measure, U.S. manufacturing is actually doing quite well. (Note: Rex Nutting at Marketwatch made this point back in March.)
Take a look at this long-term chart of industrial production, courtesy of the U.S. Federal Reserve. Over the past 100 years, the index, which measures the value of the output of the manufacturing, mining, and utilities industries, has risen steadily. But the rise has generally continued in the last several decades — decades in which the narrative was that manufacturing has been in apparent decline.
What accounts for this disconnect between the rising dollar value of manufactured goods and falling employment? A few things. First, the production of less-expensive goods, like T-shirts, toys, and the like, has long since gone offshore. As a result, manufacturing in the U.S. is disproportionately a high-end activity: heavy machinery, tools, cars. I visited a General Electric plant in South Carolina a few years ago that made gas turbines for power plants — at US$90 million apiece. Boeing makes large airplanes in this country, which can cost about $200 million each. America may not make as many objects as it did 30 years ago, but the average value of an object made in the U.S. has risen sharply.
Second, there’s productivity. Manufacturing, from the outset, has been a pioneer in labor-saving technology. A century ago, Frederick Winslow Taylor walked around factories with stopwatches to time workers and suggest improvements. Henry Ford spend untold hours devising a hyper-efficient assembly line. Then came total quality management, Six Sigma, lean manufacturing, and all the other trends and practices. The overriding imperative driving these efforts has always been to figure out how to produce more (and faster) with fewer resources — raw materials, energy, effort, and, yes, labor.
In an often-overlooked phenomenon, quarter after quarter, year after year, companies have invested in and applied technology to the manufacturing process. Recent advances in computer technology have transformed efficiency efforts from an analog undertaking to a digital one.
The result is that factories today can actually be slightly eerie places, especially to someone accustomed to working in a densely populated newsroom or trading floor. Over the past several years, I’ve visited a range of factories: a steel fabrication plant in New York, a window manufacturer in Florida, car factories in Ohio, a frozen-French fry plant in North Dakota, a jet-engine plant in North Carolina, a producer of plastic coffee pods in Virginia, a jar manufacturer in Indiana, and a fishing-line producer in South Carolina. The common denominator in each: There just aren’t that many people in them. There are lots of whirring gizmos, belts that move goods through the stages of production, and machines that package and stack the finished products on pallets. But the people on the floor are mostly involved in tending to raw materials, quality control, maintenance, and oversight.
There’s a third point that is overlooked when we focus only on direct factory employment as a measure of manufacturing’s strength. Manufacturing has, to a large degree, unintegrated. That is to say, the activity you see on the factory floor is the culmination of all sorts of other activity that happened elsewhere. A rule of thumb in the gas-turbine or jet-engine business, for example, holds that for every job in the factory, there are eight in the supply chain.
And those aren’t just jobs at the manufactures of the components that are assembled in the factory. In fact, there are a lot of service jobs involved with manufacturing, many of which are done by people who don’t work directly at manufacturers. All the materials have to be moved — on trucks, trains, and planes. Marketing and sales professionals help goods find buyers. Factories wouldn’t be able to run without security, maintenance, landscaping, and food service.
Put another way, manufacturing may not simply be more robust than is commonly understood; it may support more employment than many people think.
Of course, it’s natural to discuss direct employment when determining the state of manufacturing in a given country. There’s an important human story behind every job that has been lost in manufacturing over the years. But when we’re trying to grasp the implications of complex economic phenomena and technological change, one data point doesn’t always tell the entire story.
At many universities, engineering and robotics are very sexy majors, with staring salaries in the high five figures.
Most of the Cheap Labor Express hawks hate tariffs and love the income tax. Go figure.
From CNN: Here is a list of companies we’ve confirmed are “Exporting America.” These are U.S. companies either sending American jobs overseas, or choosing to employ cheap overseas labor, instead of American workers.
http://www.cnn.com/CNN/Programs/lou.dobbs.tonight/popups/exporting.america/frameset.exclude.html
I know for a fact that this list falls short, as there are four companies I can think of here in my town that have moved to Mexico, and are not on this list.
I’m sure the standard of living for the laid of Carrier workers in Indiana is so high now with all the free time on their hands.
I don't see where it relates to American manufacturing but it does bring up a related question. I understand that one PAC that supports Trump is running ads attacking Hillary for saying to an Indian business audience that offshoring is an established fact and that there isn't anything the U.S. can do to stop it. How would President Trump prove Hillary wrong and stop offshoring of jobs?
Couch-surfing, Xbox, and growing man-buns, as far as I can see.
And I’ve recently seen about millenials working their “side-hustle”. . .whatever that is. . .
Reduce the H-1B visa quota to zero.
Most vehicles sold in the US areASSEMBLED in the US
That's bringing people from overseas to the U.S. to take American jobs. But millions of jobs in customer support, accounting, IT, medicine, banking, and the law have been outsourced to overseas vendors and are no longer being done in the U.S. by anyone, H-1B or other. Ending H-1Bs won't end that. What will Trump do that will?
And jobs in mfg?
What we know for sure here is that you're posting stuff you don't know anything about. Meanwhile U.S. factory out put soars while the lefts wimps and cries.
It sure seems that way, and at the same time there's a lot of info being passed around here --more than I've seen elsewhere. My take is that we only seem to hear from morons because the morons are so much louder. That leaves a lot of other folks that know what's going on and don't feel the need to whine so much.
IMHO, the Dems want to destroy as many good paying jobs as the can, union or not. Why? Simply because they benefit when people are dependent on Government. They figure they will always be able to print enough $$ to fund the Entitlement Sate.
I worked for a natural gas company. When I started a fifth of the company's demand came from a HUGE industrial base with a fairly large baseload. As the decades passed the demand from that sector decreased to a small fraction of total demand. Some companies moved out of Chicago due to taxes, unions and other costs due government regulations others died like Stewart Warner. Google that company. There were many companies like that in Chicago. Now if not extinct, definitely endangered. Why? Because of Unions, taxes and regulations.
BTW, why the term “Rust Belt”? Is that a figment of Freepers’ imaginations?
A trade imbalance doesn't mean all of that money evaporated. We sent cash and got $1T worth of goods in return.
Visit the Toyota plant in Georgetown, KY or the BMW plant in Greer, SC. They are ringed with parts manufacturers that supply most of what is assembled in those plants. Every car sold in the US has a domestic content sticker.
bkmk
The jobs you are service jobs and not manufacturing. Those services with be subject to a import tax like on durable goods. Same concept.
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