The Death of Manufacturing in the USA

[aCultureWarrior]

We are destroying ourselves with our own greed. And it just gets worse and worse, for most of us.

Just so we are all on board with what the definition of "greed" is in the mind of left wingers/socialists like PureX:

The free enterprise system of government.

 

[chrysostom]

How about fair trade?

free trade is fair trade

 

[aCultureWarrior]

free trade is fair trade

If free trade were fair trade, then the slave laborers in communist China wouldn't be allowed to work 12 year old girls 16 hours+ a day in pollution filled factories for pennies a day and would have to abide by the 2,183 federal regulations that are forced on US manufacturers.

http://www.theologyonline.com/forums/showpost.php?p=4316458&postcount=35

Santa's Workshop - Inside China's Slave Labour Toy Factories

 

[chrysostom]

If free trade were fair trade, then the slave laborers in communist China wouldn't be allowed to work 12 year old girls 16 hours a day in pollution filled factories for pennies a day and would have abide by the 2,183 federal regulations that are forced on US manufacturers.

http://www.theologyonline.com/forums/showpost.php?p=4316458&postcount=35

one problem at a time
one vote at a time
and
that vote is republican until we destroy the democratic party
and
we vote tea party in the mean time to get rid of the lousy republicans

 

[Saved.One.by.Grace]

We are destroying ourselves with our own greed. And it just gets worse and worse, for most of us.

It's both corporate and individual greed. Excellent comment.

 

[chrysostom]

It's both corporate and individual greed.

they are the same
can you put a corporate in jail?

 

[rougueone]

they are the same
can you put a corporate in jail?

Congress can pull their charter. Making the Corporation instantly out of business. And the people employed there. A catch 22.

 

[rougueone]

Don't forget Ronald Regan's part in this play. He is the one who broke the traditional relationships between unions and management. While never a perfect relationship, they generally worked towards the same general goals. When Ronald broke the Air Traffic Controllers union, that pretty well defined a new battle ground: labor versus management.

It had other side effects as it clearly revealed that large corporations have no real respect towards their employees. Employees learned this and any loyalty they may have felt towards their company kind of evaporated. The years right after Regan have seen a shift in employee attitudes towards their companies. Since companies no longer provide retirement benefits and other perks, there is little incentive for employees to remain loyal to company. Instead, they follow the money and go where they can get the most for what they do.

And this has the side effect of stripping a company of its knowledge base. People used to work for a company long enough to learn in great detail how the manufacturing process worked. They tweaked it and passed that knowledge on to their buddies but not always to management. So when those people leave and take that knowledge with them, the factory becomes hugely inefficient and no longer profitable so it closes.

This is not a one sided issue. There is blame enough to go around. The democrats and republicans are equally guilty for creating the economy we find ourselves in today. Those of us that voted share in that guilt because we elected those people and did not stop them from spending way more than we can ever hope to pay back or prevent them from making it all about the money. We should hang our heads in shame.

Truth.
Reganonmics started the attack on the Unions. Reganonmics are still having a devastating effect on whats left of the middle class and rendered Unions all but useless to bargain for livable wages and benefits for the working people. Presidents since Reagan could of stopped this. But did not.

 

[Tinark]

Less workers engaged in an activity to produce the same amount of value is a necessary ingredient for economic growth and prosperity.

The fewer of our workers we need to obtain the cars we want to buy, the more of our workers that are available to produce something else of value.

For all the wringing of hands in this thread, with the only evidence of "the death" of manufacturing being that we have less workers employed in manufacturing, despite the charts I posted demonstrating record levels of value of manufactured product produced on a per worker basis and an overall basis. Hello people! This is called economic growth. We need fewer workers producing manufactured goods so that those workers can produce other things we value, in exactly the same way that we needed fewer workers working on the farms to produce other things of value.

 

[chrysostom]

Less workers engaged in an activity to produce the same amount of value is a necessary ingredient for economic growth and prosperity.

The fewer of our workers we need to obtain the cars we want to buy, the more of our workers that are available to produce something else of value.

For all the wringing of hands in this thread, with the only evidence of "the death" of manufacturing being that we have less workers employed in manufacturing, despite the charts I posted demonstrating record levels of value of manufactured product produced on a per worker basis and an overall basis. Hello people! This is called economic growth. We need fewer workers producing manufactured goods so that those workers can produce other things we value, in exactly the same way that we needed fewer workers working on the farms to produce other things of value.

good post
but
don't forget you have to be able to fire them once they are no longer needed or wanted
so
they can move on to do other things

 

[The Berean]

Less workers engaged in an activity to produce the same amount of value is a necessary ingredient for economic growth and prosperity.

The fewer of our workers we need to obtain the cars we want to buy, the more of our workers that are available to produce something else of value.

For all the wringing of hands in this thread, with the only evidence of "the death" of manufacturing being that we have less workers employed in manufacturing, despite the charts I posted demonstrating record levels of value of manufactured product produced on a per worker basis and an overall basis. Hello people! This is called economic growth. We need fewer workers producing manufactured goods so that those workers can produce other things we value, in exactly the same way that we needed fewer workers working on the farms to produce other things of value.

What are these "other things of value"? :think:

 

[Tinark]

What are these "other things of value"? :think:

Entertainment, health care, education, construction and related services (such as architecture), engineering, scientific and technological research, retail, and transportation, just to name a few.

 

[chrysostom]

What are these "other things of value"? :think:

care giving
more and more people are getting old without children or grandchildren to take care of them

 

[Tinark]

good post
but
don't forget you have to be able to fire them once they are no longer needed or wanted
so
they can move on to do other things

Yes, each and every month there are some 4 to 5 million job separations. In March, for example, there were 5 million. Of those 5 million, 2.8 million were quits, 1.8 million were layoffs and discharges, with the rest being other forms of separation.

http://www.bls.gov/news.release/jolts.nr0.htm

However, despite that, there were 84,000 net jobs added in March, meaning that 5,084,000 total new job positions were filled that month.

 

[Saved.One.by.Grace]

Entertainment, health care, education, construction and related services (such as architecture), engineering, scientific and technological research, retail, and transportation, just to name a few.

You have to be willing to relocate. At age 65 with health problems for my wife and I, this is not a choice unless we file for bankruptcy. Engineering jobs look for men/women with mid-level experience. Even paring my resume down, it's obvious I have too much experience.

 

[Tinark]

You have to be willing to relocate. At age 65 with health problems for my wife and I, this is not a choice unless we file for bankruptcy. Engineering jobs look for men/women with mid-level experience. Even paring my resume down, it's obvious I have too much experience.

I'm not claiming that having an economy with higher rates of churn (lots of new job positions being filled each month, but also lots of job separations) is all sunshine and roses. While this feature tends to shift people to higher value activities demanded by fickle consumers, changing market conditions, new technology and innovation and, yes, new competition (such as from foreign countries), strengthening our economic competitiveness overall and resulting in greater levels of economic prosperity overall, this doesn't mean that it isn't a hardship for those individuals caught up in the changes.

At the same time that I support a dynamic economy, I also am fully in favor of safety net programs designed to help ease the pain/burden for those caught up in these transitions. People in situations like you are in. The good news is that you are close to qualifying for full social security. Yes, it may mean you take a hit in income and lifestyle if you are unable to find work in the mean time. However, I presume that it won't lead to you and your wife being destitute. Also realize that the hardship you are suffering is also offset, in part, by the opportunities that a dynamic economy allowed you to pursue during your working career and also offset in part by greater affordability, variety and quality of consumer goods a dynamic economy makes available for you to purchase throughout your life.

 

[Tinark]

Evidence of the greater affordability of manufactured goods, the benefits of a dynamic economy that allows for things like foreign competition and greater productivity (needing fewer workers to produce the same amount of value)

The [above] chart above helps explain some of the shift over time from goods to services, by showing that the CPI for services has increased more than the overall CPI by almost 1% per year, while the CPI for durable goods has increased almost 2% less than the overall CPI. In other words, the real price of services has been rising by almost 1% per year, and the real price of durable goods has been falling by almost 2% per year. To put it in perspective: on average, $100 of goods and services purchased in 1947 would have cost $820 by 2010. But consider this difference - $100 of services purchased in 1947 would cost $1,250 today; $100 of durable goods in 1947 would only cost $314 today by comparison. In other words, manufactured goods are a real bargain and they keep getting cheaper over time.

 

[PureX]

Less workers engaged in an activity to produce the same amount of value is a necessary ingredient for economic growth and prosperity.

The fewer of our workers we need to obtain the cars we want to buy, the more of our workers that are available to produce something else of value.

For all the wringing of hands in this thread, with the only evidence of "the death" of manufacturing being that we have less workers employed in manufacturing, despite the charts I posted demonstrating record levels of value of manufactured product produced on a per worker basis and an overall basis. Hello people! This is called economic growth. We need fewer workers producing manufactured goods so that those workers can produce other things we value, in exactly the same way that we needed fewer workers working on the farms to produce other things of value.

But all that added value is going to the capital investors, while the workers are getting screwed. The problem with your system is that it doesn't value the human beings involved in it, it only values the profitability of the production/consumption cycle. When worker Bob loses his job while CEO Steve gets a big fat bonus for getting more productivity out of fewer workers (breaking unions, ending pensions, eliminating benefits, etc.), your system thinks this is a success. And so, not surprisingly, do the CEOs the capital investors who are taking home all the added wealth.

 

[chrysostom]

But all that added value is going to the capital investors,

oh
that is too bad
but
what are they going to do with it
grow the companies?
great, that means more jobs
or
are they going to buy lots of stuff?
great, that means more jobs

can't win
can ya

 

[Tinark]

But all that added value is going to the capital investors, while the workers are getting screwed.

False. Take a look at my post directly above this one. Workers (as consumers) benefit with more affordable manufactured goods available for purchase as their price drops in real terms. In other words, we all benefit from the price drops that result from the additional competition or the increase in productivity.

Do you know the areas that have had ridiculous increases in price over the last 50 years? Education, health care, and housing, exactly the areas shielded from foreign competition and outsourcing. If you look at where the vast majority of the additional capital income share has gone, it's gone to real estate owners. In part due to restrictive zoning and other development regulations (making quality real estate far more scarce).

Rognlie shows that the share of net income generated by housing has risen in all seven large developed economies since data became available. “Housing’s central role in the long-term behavior of the aggregate net capital share has… not been emphasized elsewhere…Observers concerned about the distribution of income should keep an eye on housing costs,” he writes.

Another thing you fail to consider is that while capital share of income has risen, net capital share of income is the more important metric to consider. This means that we must subtract depreciation from the capital share of income to get a true picture of how much income capital owners are receiving. Imagine I purchase a machine for $100,000. If this machine breaks down after 4 years, meaning I have to buy a new one after the 4 years is over and reinvest another $100,000, this machine must earn me over $25,000 per year additional profit to be a worthwhile investment. On the other hand, if this machine breaks down after 10 years, then I only need to increase profit by over $10,000 per year to be worthwhile. If the 4 year machine can increase profits by $30,000 pear year and the 10 year machine can increase profits by $20,000 per year, then the 10 year machine is actually more profitable per dollar of investment. However, notice that the more profitable investment would actually have a _lower_ share of overall income.

If the economy shifted more so to the 4 year machines (faster depreciating capital), the capital share of income would rise in the data and yet capital owners would not be better off.

What does the data actually say?

Capital income is not growing unboundedly at the expense of labor, and further accumulation of capital in fact most likely means a fall in capital’s share of total income – refuting one of the main theories of economist Thomas Piketty’s popular book Capital in the 21st Century — according to a paper presented today at the Spring 2015 Conference on the Brookings Papers on Economic Activity (BPEA).
Existing studies that show an increase in capital’s share of income miss the growing role of depreciation in short-lived capital, in items such as software, says MIT’s Matthew Rognlie in “Deciphering the Fall and Rise in the Net Capital Share.” Rognlie subtracts depreciation in seven large developed economies (the US, Japan, Germany, France, the UK, Italy, and Canada) to get net capital income, and finds that the only long-term rise in capital’s share of income is in housing. Capital income elsewhere in the economy has grown moderately, but it is only recovering from a large fall that lasted from 1948 through the 1970s.

http://marginalrevolution.com/margi...gnlie-on-piketty-net-capital-and-housing.html

The problem with your system is that it doesn't value the human beings involved in it, it only values the profitability of the production/consumption cycle. When worker Bob loses his job while CEO Steve gets a big fat bonus for getting more productivity out of fewer workers (breaking unions, ending pensions, eliminating benefits, etc.), your system thinks this is a success. And so, not surprisingly, do the CEOs the capital investors.

You are failing to take into account that more goods/services become available for purchase in our economy as a whole when these things happen as each worker produces more product per hour.

The negatives you mention can be offset with greater safety net programs, which will be far more affordable given the greater economic prosperity and the increase in incomes. Taxes, federal state and local, currently amount to about 33% of total GDP. Unless you want to argue that government spending doesn't provide us value, society automatically captures 33% of any additional value created in the economy through greater tax revenue. This is on top of the more affordable prices that result for consumers.