U.S. manufacturing

[John Adams]

You sure about that? I thought US produced 20% of total global economic output, not just manufacturing. I think its share of manufacturing is lower than that, but still pretty big. But the key points are, the manufacturing jobs that are still here tend to be more specialized, highly skilled. It's ridiculous to fight to keep low wage, low skill manufacturing jobs in the US (most light industry jobs). The goal is to continue improving the standard of living for US workers, not keep them bottled up in the '50s.

 

I googled something and found this because I know I'd read a WSJ article about the myth of the decline of US manufacturing.

 

I found several articles

 

http://blogs.forbes.com/china/2010/05/24/t...acturing-power/

 

Contrary to the conventional view, manufacturing in the U. S. has been growing in the past two decades despite the decline in manufacturing jobs. The latest data show that the United States is still the largest manufacturer in the world. In 2008, U.S. manufacturing output was $1.8 trillion, compared to $1.4 trillion in China. This means that the United States is producing goods with higher value, such as airplanes and medical equipment.

 

http://articles.moneycentral.msn.com/Inves...rys-demise.aspx

 

U.S. workers produce 21% of all factory goods made globally, or about $1.7 trillion worth per year. That's significantly lower than the peak of 28% in 1985 but only slightly below the long-term average of 23% for 1970 through 2006.

 

The truth is that we don't value those jobs (with salaries) the way we used to. Why? I'll look to an anecdote about my great uncle. He work in manufacturing for GE for most of his life. He made a comparative fortune.But all he did was put (for the most part) the same parts together day in and day out. That is a low level labor job and nowadays, there are a million people who can do it so we don't pay a premium for it. My other grandfather worked on a factory floor driving a forklift--he also had a great lifestyle but again, driving a forklift isn't rocket science and nowadays, that's not a high-paying job.

[GG]

I googled something and found this because I know I'd read a WSJ article about the myth of the decline of US manufacturing.

 

Good to see that it's still high. I recall the number being about 25% a decade ago and thought the number would hvae fallen off faster. Interesting to see if the decline will rise faster if national VAT is in place.

[Magox]

I googled something and found this because I know I'd read a WSJ article about the myth of the decline of US manufacturing.

 

http://blogs.forbes.com/china/2010/05/24/t...acturing-power/

 

 

Contrary to the conventional view, manufacturing in the U. S. has been growing in the past two decades despite the decline in manufacturing jobs. The latest data show that the United States is still the largest manufacturer in the world. In 2008, U.S. manufacturing output was $1.8 trillion, compared to $1.4 trillion in China. This means that the United States is producing goods with higher value, such as airplanes and medical equipment.

The problem with trying to find a conclusion based on those facts, is that relatively speaking, we are losing manufacturing market share. Sure the number has increased, but the overall overput has increased at a much faster rate than our output over the last two decades.

 

I will give you an example. Let's say that two decades ago our manufacturing output was $1Trillion and manufacturing output for the world was at $3Trillion. That would mean two decades ago we made up %33 of the worlds manufacturing output.

 

Fast forward to today, and now our output is at $1.8Trillion and let's say that the worlds output is at $7.5 Trillion, sure, we have increased the total volume of what we produce, but instead of making up 33% of the worlds output we now make up 24%.

 

http://investing.curiouscatblog.net/2009/1...ntries-in-2008/

 

My argument is that relative to other emerging market nations we are losing market share, and it is almost impossible for us to compete against these nations that have much lower wages than we do.

[DrFishfinder]

The truth is that we don't value those jobs (with salaries) the way we used to. Why? I'll look to an anecdote about my great uncle. He work in manufacturing for GE for most of his life. He made a comparative fortune.But all he did was put (for the most part) the same parts together day in and day out. That is a low level labor job and nowadays, there are a million people who can do it so we don't pay a premium for it. My other grandfather worked on a factory floor driving a forklift--he also had a great lifestyle but again, driving a forklift isn't rocket science and nowadays, that's not a high-paying job.

The manufacturing jobs your great uncle and grandfather (and mine) had are being done with far, far cheaper labor overseas and/or are being automated.

 

Whether "we" value these types of jobs or not, the fact is that the cost of goods and labor overseas is far, far cheaper than in the US. It's almost impossible to produce a product in the US that can compete in price, with a comparable product produced overseas. Not unless someone is willing to pay the price differential. So those manufacturing jobs simply cease to exist in the US; either from the outright demise of the company or the relocation of the company to another country.

 

I worked for GE for 6 years. You either make the numbers that GE gives you, or they either shut you down or carve you up and sell you off like pizza slices.

[John Adams]

The problem with trying to find a conclusion based on those facts, is that relatively speaking, we are losing manufacturing market share. Sure the number has increased, but the overall overput has increased at a much faster rate than our output over the last two decades.

 

I will give you an example. Let's say that two decades ago our manufacturing output was $1Trillion and manufacturing output for the world was at $3Trillion. That would mean two decades ago we made up %33 of the worlds manufacturing output.

 

Fast forward to today, and now our output is at $1.8Trillion and let's say that the worlds output is at $7.5 Trillion, sure, we have increased the total volume of what we produce, but instead of making up 33% of the worlds output we now make up 24%.

 

http://investing.curiouscatblog.net/2009/1...ntries-in-2008/

 

My argument is that relative to other emerging market nations we are losing market share, and it is almost impossible for us to compete against these nations that have much lower wages than we do.

 

The numbers are "U.S. workers produce 21% of all factory goods made globally, or about $1.7 trillion worth per year. That's significantly lower than the peak of 28% in 1985 but only slightly below the long-term average of 23% for 1970 through 2006."

 

In addition, US manufacturing is UP since the 90s.

 

The US manufacturing dialog that we're all so used to aping is wrong.

[finknottle]

Just what we need more programmers, scientists, and engineers, accountants, medical professions (MAYBE) and lawyers ( )... We will be a whole society of professions or the poor slep making zilch. Sounds like a great society! The haves and the have nots. Isn't this what got us into this mess?

 

I do agree with the training... But what we need are more CPA's opening up candy shops or other bsuinesses!

 

Still we need decent paying jobs for the masses.

 

Didn't mean to suggest that we need more of these people. I'll be the first to say that we need fewer lawyers - or more accurately, an environment in which fewer lawyers are required to navigate regulations and the law.

 

My only point is that these are today's middle/upper middle class professions. The professions are thriving, and people having those skill sets are rewarded. We are not 'tapped out' on skilled jobs.

 

Manufacturing is minimally profitable, and the skill sets required are low. Nobody is going to pay good salaries in that situation. So complaining about falling living standards for people trained for factory line work is a bit like bemoaning the falling incomes of retail cashiers.

 

But your point about decent jobs for the masses is valid. The question is: is it realistic to imagine a uniformly high-end economy, in which everybody is skilled and doing valuable work? If not, what do we do about the great unwashed masses, who can't or won't train themselves for a modern knowledge-based economy?

 

The trick is to strike the right balance between a harsh have/have not economy and the welfare state. We need to support everybody minimally, without disincentivizing the personal committment and choices needed to be a valuable worker in a highwage economy.

[John Adams]

The manufacturing jobs your great uncle and grandfather (and mine) had are being done with far, far cheaper labor overseas and/or are being automated.

 

Whether "we" value these types of jobs or not, the fact is that the cost of goods and labor overseas is far, far cheaper than in the US. It's almost impossible to produce a product in the US that can compete in price, with a comparable product produced overseas. Not unless someone is willing to pay the price differential. So those manufacturing jobs simply cease to exist in the US; either from the outright demise of the company or the relocation of the company to another country.

 

I worked for GE for 6 years. You either make the numbers that GE gives you, or they either shut you down or carve you up and sell you off like pizza slices.

 

Yeah, so? No one in the USA wants my uncle's job these days. Most would not want to sit at a bench for 8 hours for 30 years but the lowest earners.

 

People B word about "no jobs" but what they really mean is that there are fewer high paying jobs anymore for positions that require no-to-little skill. And that's probably true.

[Magox]

The numbers are "U.S. workers produce 21% of all factory goods made globally, or about $1.7 trillion worth per year. That's significantly lower than the peak of 28% in 1985 but only slightly below the long-term average of 23% for 1970 through 2006."

 

In addition, US manufacturing is UP since the 90s.

 

The US manufacturing dialog that we're all so used to aping is wrong.

I disagree, I believe the relativity factor is a major one, and you are completely discounting that, and it's continuing to go in the wrong direction.

 

In regards to the developed economies, we have done a better job than the majority of our partners, and that is largely due to our ability to innovate, combined with our technological advantage, even though these innovations comes at the expense of the labor force.

 

Remember John, that's what this thread was originally about, the labor force.

[John Adams]

I disagree, I believe the relativity factor is a major one, and you are completely discounting that, and it's continuing to go in the wrong direction.

 

In regards to the developed economies, we have done a better job than the majority of our partners, and that is largely due to our ability to innovate, combined with our technological advantage, even though these innovations comes at the expense of the labor force.

 

Remember John, that's what this thread was originally about, the labor force.

 

Your theoretical numbers don't jibe with the real ones that I've now quoted 3 times: "U.S. workers produce 21% of all factory goods made globally, or about $1.7 trillion worth per year. That's significantly lower than the peak of 28% in 1985 but only slightly below the long-term average of 23% for 1970 through 2006." Furthermore, US manufacturing has been INCREASING since 1990.

 

You can keep making your argument that US manufacturing is on the decline when going back to 1985 and it is--but not nearly as much as you argue. And you're wrong: manufactuing in the US is not going in the "wrong" direction anymore. It's increasing of late. There's no need to Dwight Drane everything. We have a lot of problems but not everything in the US economy is a black hole of doom.

 

If the point is that high-paying low skill jobs in manufacturing are not available like they were in the 1930-1960s, that's true but those peachy jobs have been gone for almost as long as they were here.

 

When I chimed in with manufacturing statistics, I was responding to the myth that the US doesn't "make" things anymore and that everything is made elsewhere. That is just not true.

[DC Tom]

The numbers are "U.S. workers produce 21% of all factory goods made globally, or about $1.7 trillion worth per year. That's significantly lower than the peak of 28% in 1985 but only slightly below the long-term average of 23% for 1970 through 2006."

 

In addition, US manufacturing is UP since the 90s.

 

The US manufacturing dialog that we're all so used to aping is wrong.

 

I wonder how those numbers change when you subtract cheesy plastic keychains and the like.

[John Adams]

I wonder how those numbers change when you subtract cheesy plastic keychains and the like.

 

If you take away Hello Kitty merch alone, US manufacturing jumps 1%.

[DrFishfinder]

Yeah, so? No one in the USA wants my uncle's job these days. Most would not want to sit at a bench for 8 hours for 30 years but the lowest earners.

 

People B word about "no jobs" but what they really mean is that there are fewer high paying jobs anymore for positions that require no-to-little skill. And that's probably true.

Well, I'm not so sure about your first sentence, John. "These days", unemployment is 12% in Florida and I know a bunch of people, my wife included, that simply cannot find jobs. Any jobs. Companies are shutting down, storefronts are vacant, entire shopping centers have closed up, businesses are cutting back to skeleton staff. Would they want to sit at a bench for 8 hours a day assembling widgets? No. Would they do it now? Absolutely. My wife has been unemployed for 2 years and she is a full charge book keeper. She has sent out hundreds and hundreds of resumes for anything and everything. Right now, companies looking for AR/AP/Book Keeper can get an unemployed CPA for less than the going salary of the AR/AP/Book Keeper.

 

More than I meant to say, but this one is very close to home with me.

[Magox]

Your theoretical numbers don't jibe with the real ones that I've now quoted 3 times: "U.S. workers produce 21% of all factory goods made globally, or about $1.7 trillion worth per year. That's significantly lower than the peak of 28% in 1985 but only slightly below the long-term average of 23% for 1970 through 2006." Furthermore, US manufacturing has been INCREASING since 1990.

 

You can keep making your argument that US manufacturing is on the decline when going back to 1985 and it is--but not nearly as much as you argue. And you're wrong: manufactuing in the US is not going in the "wrong" direction anymore. It's increasing of late. There's no need to Dwight Drane everything. We have a lot of problems but not everything in the US economy is a black hole of doom.

 

If the point is that high-paying low skill jobs in manufacturing are not available like they were in the 1930-1960s, that's true but those peachy jobs have been gone for almost as long as they were here.

 

When I chimed in with manufacturing statistics, I was responding to the myth that the US doesn't "make" things anymore and that everything is made elsewhere. That is just not true.

Did you not see the link that I provided you? Those numbers "do jibe" with what's happening. And "Dwight Drane everything"? , my numbers are borne out of facts, and I have been spot on with much of my analysis.

 

The original point of the thread was manufacturing JOBS. Remember? So yes, manufacturing jobs have been declining. I'm not here to argue if it's a good or bad thing, because I believe corporations are free to move their operations where they please for the most part. I also believe it's up to individuals and corporations to adjust to economic conditions for job creation.

 

I wasn't making the point that our manufacturing sector is doom and gloom, you got that from your own preconceived opinions of me, I was simply repudiating a portion of your argument. We are losing market share in global manufacturing output, and we are moving in the wrong direction in regards to % of global output. These are facts. And if you took off your blinders for a second, you would see that from the very beginning of this thread, I have said that we are losing these jobs because of low wages, and that is a fact. Ok?

[John Adams]

Well, I'm not so sure about your first sentence, John. "These days", unemployment is 12% in Florida and I know a bunch of people, my wife included, that simply cannot find jobs. Any jobs. Companies are shutting down, storefronts are vacant, entire shopping centers have closed up, businesses are cutting back to skeleton staff. Would they want to sit at a bench for 8 hours a day assembling widgets? No. Would they do it now? Absolutely. My wife has been unemployed for 2 years and she is a full charge book keeper. She has sent out hundreds and hundreds of resumes for anything and everything. Right now, companies looking for AR/AP/Book Keeper can get an unemployed CPA for less than the going salary of the AR/AP/Book Keeper.

 

More than I meant to say, but this one is very close to home with me.

 

Unemployment nationally is 10%. It will likely be this high for a long time. Before the 2009 crash, we were probably overemployed. Most companies laid people off and their profits are now back to normal. It's a strange thing but true--the people they fired weren't helping them make more money...so there's no way they are going to hire now.

 

I won't comment on your wife's situation because I know nothing about it. People are hiring but maybe not in your area.

[John Adams]

I wasn't making the point that our manufacturing sector is doom and gloom, you got that from your own preconceived opinions of me, I was simply repudiating a portion of your argument. We are losing market share in global manufacturing output, and we are moving in the wrong direction in regards to % of global output. These are facts. And if you took off your blinders for a second, you would see that from the very beginning of this thread, I have said that we are losing these jobs because of low wages, and that is a fact. Ok?

 

You are talking past me. Manufacturing productivity--by all three of our links--is down...but not catastrophically so, especially when you consider that in the last 40 years, we averaged something like 23% of world manufacturing output and now we're at 21%. I've now said this 3 times.

 

And my point is that despite the MASSIVE rise in manufacturing in the Pacific Rim countries (excluding Japan), the USA is still a very strong manufacturing presence and the sky is not falling. I apologize for accusing you of being a "sky is falling" kind of guy. I can't imagine where I got that from.

 

Now, As I'm reiterating a second time, I separated the conversation about productivity from jobs. Well-paying manufacturing jobs are certainly on the decline in the USA. That's partially because of automation (need fewer people). Partially the demise of the unions (wages can be set at a fair level). Partially because manufacturing has gone from requiring more experienced people to less experienced (wages). Jobs have gone overseas (less jobs). Partially a strong dollar (at least compared to many currencies). This will likely remain the case for a long time. Those jobs are history but they are ****ty jobs. If people want jobs in America, they need to get smarter. That's our challenge.

[....lybob]

So the complaints aren't "Where has US manufacturing gone" but "Where have all the high salaries for manufacturing jobs" gone? That's an entirely different discussion.

 

I didn't mean to make such a specific point- I was trying to convey that trajectory is usually a greater determinant to how people or nations feel about their situation than absolute circumstances.

[DrFishfinder]

Unemployment nationally is 10%. It will likely be this high for a long time. Before the 2009 crash, we were probably overemployed. Most companies laid people off and their profits are now back to normal. It's a strange thing but true--the people they fired weren't helping them make more money...so there's no way they are going to hire now.

 

I won't comment on your wife's situation because I know nothing about it. People are hiring but maybe not in your area.

I am doubtful of the "overemployed" label. I don't think companies would have structured their business plans to have more employees than financially necessary. I can tell you for sure, GE didn't.

 

Companies are not spending any money that they don't see as absolutely 150% necessary and in many cases in my side of business, they know they need (not want) my products and have told me so. But....they are simply handcuffed by CapEx budgets that have been slashed to ribbons by upper management. So in my case, which is security, they eliminate security altogether and in essence, drive from Florida to Alaska without a spare tire and hope for the best. If nothing happens, they're okay. If something does happen, they're screwed. These days, for a lot of companies, that is an acceptable risk whereas prior to the crash, it would not have been.

 

In my wife's case, people are indeed hiring, but as I said, unemployment is such they can get someone twice as qualified for 1/2 the salary.