What's happened to all the manufacturing jobs?

THE BERNIE SANDER'S OPTION

Good question, What jobs? This is the point that misses explanation by economists.

Those jobs that existed 20/30 years ago are "gonzo". And they aint a comin back!

From the Atlantic, here: Where Did All the Workers Go? Excerpted infographic:


If you want a well-paying job nowadays, you are unlikely to find it in manufacturing of the kind that existed back half a century ago. Detroit is a shell of a town, and once was a prominent employer in car-manufacturing.

But nobody asks the question, "What happened?"

What happened (as an example) is that foreign cars at the cheap-end outdid US manufactured cars no matter how much Detroit's BigThree tried to compete. Uncle Sam was competing with Japanese and Korean cars being manufactured at production costs half ours. The BigThree went though a massive downsizing in order simply to maintain production levels during the Great Recession, that clobbered consumer Demand for goods/services (in more sectors than just automotive).

Had we as a nation the prescience to see what would be happening 25-years ago, perhaps we would have installed then the "Sander's-option" of free postsecondary education (vocational, 2- & 4-years). IF we had done that, we'd have had at least one generation (which is described as a quarter-century) that had the necessary credentials to find "good jobs".

But we didn't and, now with Donald Dork in the Oval Office, we are unlikely to have any change for at least another 4 years and perhaps 8 if the American voter remains close-minded to what is happening in the world around us.

MY POINT

Quote from the above infographic:

It's now more than six decades since 1953, and what have we been doing about "manufacturing jobs"? Replacing them with automation, that's what. Let's not look for the culprits ONLY ABROAD, because American manufacturing has been doing what the rest of the developed world (except China) has been doing. It's called "automating production" so consumers could have lower prices, which is what they wanted as China had proven so well.

NB: Where were the jobs being created? "Finance, insurance and real-estate". Where, I suggest, higher skill-level requirements than secondary-schooling prevailed. Which may indeed have been the case as well in the section "Health Care, Education, and Social Services" ...

 

American workers and jobs is a very complex topic. People like Trump proclaim they will change today back to the way it was decades ago and millions of gullible and frustrated Americans believe him. Many of the Americans believing Trump will magically create millions of middle-class paying jobs do not possess the education, skills or qualifications for these jobs. Further, how many millions of them live in the rural areas of the US where these types of jobs will never exist?

About the Big 3, due to competition they were forced to seek offshore outsourcing of subassemblies and complete vehicles, as well as invest in automation and robotics. And in many cases the markets were large enough in some foreign nations to justify setting up manufacturing in those areas. US unions have not helped in this area because the cost of doing business got out of control...nothing is free!

Lastly, public education is a problem today because many Americans believe education is just a nuisance. Those who believe this both in the parents and the kids will never strive to do better. As population continues to increase, the numbers of Americans who lack quality education, and lack university studies, is getting larger and larger and becoming more of a burden on the US. Essentially the job market is passing them by! I don't see public education changing in the future so this problem will simply worsen...

 

BTW...one other comment about manufacturing; most products today cannot be produced by a person using whatever tools. Today's products are designed using CAD systems and most of these designs require very technical equipment to produce. Most all electronics today, from the components themselves to the circuit boards, are so complex and miniaturized and precise that the work must be done with machines. As consumers demand more complex products with higher technical standards...and let's not forget cheaper prices...this alone forces more and more manufacturing into automation...

 

I can't believe people who bathe regularly and know how to use an alarm clock can't make an excellent living these days. People love to hire people who are responsible adults.

 

Keep dreaming. It's so much more comfortable than reality.

 

THE NEW GENERATION

I sympathize with these people, I really do. My fellow Americans are "good people" basically.

But, the jump from the Industrial to the Information Age has done its awesome damage. The Industrial Age where major-industries banged out kitchen-utensils or clobbered together cars in Detroit is over and gone. Everybody has learned how to do the "old technologies".

We need absolutely the New Generation knowhow capacities that only a Tertiary Degree will allow - and that covers vocational, associate and university level degrees. Like cooking? Get a degree as a Master Chef! Kids do it here in France - of course, in France that particular educational venue is not difficult to find. Most apprentices in the US today go into Construction - which is fine but not for everybody.

Germany has the most renowned Apprentice Program on earth. Read about why here: Why Germany Is So Much Better at Training Its Workers . There is a caveat, however, which the author of the article linked explains - excerpt:

Note that the article mentioned the fact that Obama tried to address the problem of "skills formation" in his administration. I'm not sure he got the funding necessary - not from the Replicants controlling the budget in the HofR.

We can do it - but we do not have the "will to do it" - and given Donald Dork who was born with a Golden and not a Silver Spoon in his mouth, that aint gonna happin.

MY POINT

We Yanks had a dedicated and intelligent PotUS, but we screwed Obama by voting the HofR over to the Replicants in the 2010-midterms - because he proved he could not "walk on water" and fix the worst recession since the Great One in the 1930s.

If American voters want to know who the culprit is, they should look in the mirror. We are always looking for the "Quick Fix", and in this matter it is clearly the "Long Frix" of an adequate educational formation that is not the least bit "quick 'n easy". It takes time 'n money, which is why Bernie and Hillary proposed the "European Solution" of government subsidized Tertiary Education*.

Which also has gone down in flames ...

*We can spend 54% of the Discretionary Budget on the DoD, but National Education never gets more than about 6%. (See that fact demonstrated here.)

 

It's more than going from 'industrial to information age'...decades ago a majority of Americans were farmers in which they farmed for income and to sustain themselves...today it's 5% at best. I personally believe most people who farm grow an appreciation of the environment, the community, of sustainability, of hard work, and of others...it is a comraderie of locals and the nation. This is mostly gone today leaving many people without shelter or food or hope.

It's unfortunate in the US that most people today are too stupid to think outside of their political and religious preferences...so we have divisiveness and are moving backwards. There is no way to change this unless we can force about half the voters to get a lobotomy.

Lastly, I don't think any government can force changes to our current culture. We can make some baby steps but our perpetual ineptness does not allow us to move forward. We've been discussing better public education for decades and we're still discussing it and the best we can do is install a DofE person with zero experience and political bias...heck of a job America...

 

I live in farm-country here in France. They can't make a living, and they know it. The price of milk has gone through the bottom. The farmers don't know what to do, except cash-out. Stay in the house, wait till times improve.

Then try again to make a living. This is what their parents did. They have been through the cycle before. What can they do alternatively? Knowing how to make a living off the land is all the only work they know, and all they want to do.

Farming wont die here in France, because BigMoney doesn't own it. It's not like the US - the farms here are smaller, much smaller, and owned by the same family since generations that go way back in time. The graveyards are full of people who were born and died here since centuries.

The US thinks of nearly everything economic in BigTerms. That's its Biggest Mistake. Companies with vested interests can be Big, but never the customer unless collectively. Our might in the market-economy equation is in a union, and unions in America are not that powerful any more. Not here in France either, but when they demonstrate - and the French love to demonstrate - they do so vociferously.

There is rarely a Nightly-News without the report of some demonstration somewhere. People, here, like to get out onto the streets and show both their anger and their sympathy.

So, here (in Europe), they put their hope in a Social Democracy with the will to maintain life as they want it - not as some Cargill or Archer Daniels Midland might want it to be. Their version of democracy is that it does the will of the people, not that of some megabucks company somewhere else.

You see, when and if we allow money to dominate government, then government, with its myriad intricacy of power, will come to dominate us.

Like a bunch of fools, we've just given the Keys-to-the-Kingdom to those who will now dominate America and the lives of Americans. The higher up on the ladder you are, the better off you will be. The lower, however, the worse off.

What utter idiots we are ...

 

that is a tragic graphic. Nothing is being produced, and all the 'industry' rely on money shuffling, govt contracts & employees. this is unsustainable, & will lead to financial collapse. Unless there are real goods & services being produced, just shuffling money around & buying stuff from foreign nations will bankrupt us. Eventually, no one will take our baseless, inflated currency. We will have to eat the paper dollars, since they won't buy food anymore.

 

A lot of things "manufactured" in the US really are just assembled here. It is why the proposed punitive tariffs won't work. If you implement them, it just prices the American goods out of the market. A new plant will almost always be more productive than one five years old than one ten years old than one 20 years old. Foreign manufacturers will just put downward pressure on their own wages to make up the tariff and invest in the highest end of high tech to keep other costs down. The US would have trouble competing with comparable products in the same price points over many manufactured goods.

 

Technology happened. Economies in developed countries transition from manufacturing to service industries. It's a natural progression and indicates the increase in the standard of living as fewer people work fewer hours to produce the essentials resulting in a greater percentage of services in the gdp. We don't need Bernie to understand that.

 

Tariffs...will do nothing but increase costs to all consumers and will negatively effect US exports as foreign nations place a tariff on US goods or even not allow US imports. Trade wars! This is fine with a single nation on a couple of products but to consider this mainstream policy for places like Mexico or China and others is idiocy.

Hundreds of thousands of finished products and sub-assemblies built offshore today will never again be produced in the US. With our cost of doing business, and demands for growth and profitability, and the exorbitant costs to build facilities, IMO it is highly unlikely the US will start producing even 1% of the stuff currently produced offshore.

One thing that does bother me and I believe government should take action on is why the US must import so much food? I believe a nation like the US must remain independent in oil, water, health care, building materials, energy, and food...seems to me to not do so creates a potential national security issue. For example today our current leader is screwing around with Mexico which just happens to be one of US's largest trading partners...especially with food! Of course it would severely hurt Mexico but they could destroy the US economy by refusing to trade with the USA...

 

I continue to believe a huge part of offshore production exists for reasons other than the obvious; One is the introduction of CAD (computer aided design) which means I can design something at my desk, then within minutes I can transmit that data to twenty companies around the world, asking for a quotation and delivery. Having access to twenty or more companies means I can get better quality and pricing...the only issue becomes logistics. I can not only talk, but also view work peers around the globe...like on Skype or other video-conferencing platforms so 12,000 mile distances become moot. Another is the low cost of UPS and FedX and cargo ship container shipping around the world. Another is that as many nations developed, so did their consumers, to the levels in which companies like Ford or Kellogg's or just about any consumer product, it made more sense to open a factory producing dog food in Scandinavia instead of producing it in Ohio at higher costs and shipping around the world. This is especially obvious on large products like cars and trucks...if a US company can sell 100,000 cars in Mexico then just build a plant in Mexico.

How can any of the above be 'trumped' to force a manufacturing return to the US?

 

By reducing the gov imposed costs on production in the US products from the US will be more price competitive. Also Trump can negotiate/strong arm trading partners with import tariffs on US goods to eliminate those tariffs.

 

Bernie is only reminding us, though you are right in the above statement, that the share of that effort is still infamously unfair in America.

Which is a truth - aside those who voted for him in the primaries - many Americans refused to understand.

Time will tell ...

 

I am pleased to read the above.

We should never ever give up our livelihoods to soulless corporations who's only motive is profit, profit, profit. we should never be obliged to do so.

But in this last election, that is exactly what happened in LaLaLand on the Potomac - we now have two White Houses - one in DC and the other one on Miami Beach ...

 

Pure theory.

It has never happened in the past thirty-years - and the world is no longer in a post-WW2 disaster recovery.

Besides, everything changed as regards Global Trade when the Bamboo Curtain came crashing down - and China started exporting cheap(er) goods to the world. We did not hear it in America (in 1991), but that was the death-knell of industrial production for a good part of American Industry at the lower end of the manufacturing spectrum.

I can't get the entire series, but go to this chart on the BLS-site: https://www.bls.gov/emp/ep_table_201.htmTable 2.1 Employment by Major Industry Sector.

What is read is this:
*Under "Goods-producing, excluding agriculture", Percent distribution (of Total Labor)
*2004 - 15.1%
*2014 - 12.7
* -2.4%
*In "Manufacturing alone", -1.8%

QED? Not quite, but it does show "direction".

I would like to get data-points further back in our history, but that is proving to be a "great difficulty" from the BLS-site.

Nonetheless, I have asked the BLS. We shall see ...

 

The supply side economies of Reagan, Bush 41, Clinton, and Bush 43 showed that reducing gov costs on production results in greater economic growth.

- - - Updated - - -

The distribution curve of income and wealth is irrelevant. It is the median household income that is the best metric to evaluate the success of an economy in elevating the standard of living. In capitalism the right hand extent of the curve is unlimited - and that is a good thing.

 

I beg to differ on that particular subject, and the data I posted clearly shows both Income and Wealth Disparity are grossly warped in the US.

But, I wont bore you again by listing them - they've had no effect in the past.

De gustibus non disputandum est ...

 

So what ?? It is a good thing that people such as Jobs, Gates, Buffet, etc can succeed in the US. Gates for one of many is giving his wealth back.

The most important metric is the standard of living proxied by the real median household income.

 

"from factories to cubicles"

then we sent the cubical jobs to India.... now what is Trump gonna do to fix foreign outsourcing?

 

You fail to understand the inherent principle of Societal Fairness. We all contribute to the market economy by means of our Work and our Consumer Demand. We should all expect in return a fair value of Net Income.

That is most certainly not the case in the US. And not only does Pickety research underline that conclusion but I've already posted the infographics show that research data many a time on this forum; even the most basic calculation of Gini Index values. Such as this one:


The US has the illustrious recognition of having the same coefficient as ... China!

Moving right along ...

 

The above is irrelevant. Pickety himself declares that the distribution of wealth is the most uniform of any time in history. The median household income is the metric by which to judge the success of an economic system and country by increasing the standard of living of its citizens. How does the median household income of the US compare with all these other countries ??

 

WEARING BLINDERS

Here you go again, making unsubstantiated statements about what others said.

What Piketty "said" about wealth: Why we need a global wealth tax: Piketty

That aint gonna happin any time soon, but the necessity is clear and evident. (Especially in "God's Country", that genuflects daily at the altar of Wealth.)

Unless one is wearing blinders ...

Neither the median nor the average is "indicative" of anything other than a midpoint in any distribution. And as regards Wealth, which is simply the accumulation of after-tax Income, that distribution is not the least bit fair/equitable in the US.

How many times must I put up this Saez/Zucman* infographic pulled off the Economist newsmag, here:


Or, how about his piece of work from the World Wealth & Income Database, titled, "Income Inequality in the US".

Note also from the above infographic how the ratio of Total Household Wealth is identical between both the top 0.1% and the bottom 90% in the US.

Still waiting for you to refute the above academic work* that remains to be disproved by other academic work of the same nature and quality - and not just "income averages".

(Wow - have you got your research work cut out for you ... !)

*Saez and Zucman are the American cohorts of Piketty who (all together) are economics professors; and all associated with the Paris School of Economics that houses the central "World Wealth & Income Database".