Manufacturing Jobs Are Never Coming Back
. . . all three find trade a horror.
The following paragraph gets much wrong.
"It’s understandable that voters are angry about trade. The U.S. has lost more than 4.5 million manufacturing jobs since NAFTA took effect in 1994. And as Eduardo Porter wrote this week, there’s mounting evidence that U.S. trade policy, particularly with China, has caused lasting harm to many American workers. But rather than play to that anger, candidates ought to be talking about ways to ensure that the service sector can fill manufacturing’s former role as a provider of dependable, decent-paying jobs."
Yes, voters are angry about trade. No trade does not cause lasting harm to American workers, at least not overall, but it does, or can cause the loss of specific jobs. The reality is not job in America, or job overseas, but job overseas, or no product at all. No one is willing to pay 2 or 3 times the current price for all products to keep jobs in the US. The service sector is also about to undergo a serious job decline due to AI, automation, and the Internet. The reality is we cannot know where the next jobs will come from, what they will look like, or what "sector" they will be in. Best let it happen, and not worry too much about the specifics.
"Look at the chart below: Since the recession ended in 2009, manufacturing output — the value of all the goods that U.S. factories produce, adjusted for inflation — has risen by more than 20 percent, because of a combination of “reshoring” and increased domestic demand. But manufacturing employment is up just 5 percent. And much of that job growth represents a rebound from the recession, not a sustainable trend. (The Washington Post’s Abha Bhattarai had a great story this week on what the much-touted “manufacturing renaissance” really looks like through the eyes of one Georgia town.)"
Well, productivity is a reduction in labor while producing the same amount of product. So, if we are to be more productive, we need less labor input, and equal or greater product output. This has been going on forever, and it not something new that started after we began trading with China.
"None of that, though, stops Donald Trump from promising at every debate and campaign stop to “take our jobs back from China and all these other countries.” Nor does it stop the other candidates from visiting factories in Southern and Midwestern towns and promising — albeit in less grandiose terms — to restore the lost luster of American manufacturing. “I’m tired of seeing them creating jobs all over the world while they’re laying off American workers,” Bernie Sanders told a crowd in Youngstown, Ohio, last weekend. “Not acceptable. That is going to end.'"
I can't wait till they start bringing those great $2 per hour jobs back from China. That should really wow the crowds. Free trade agreements just mean we get the low priced product without having to pay our government a tax for the right to buy at a reasonable price.
"There is nothing wrong with politicians’ trying to save what remains of U.S. manufacturing, nor with trying to avoid repeating old mistakes on trade. But like it or not, the U.S. is now a service-based economy. It’s time candidates started talking about making that economy work for workers, rather than pining for one that’s never coming back."
Huh? Trying to save what "remains" of US manufacturing?
Nothing happened to US manufacturing, it has always been there, always growing, always producing. What has gone away are the jobs associated with manufacturing. A promising future for US manufacturing.
We make what the Chinese cannot, aircraft, heavy equipment, factory equipment, and other high tech, high quality, precision products, and equipment. The Chinese make plastic widgets, toys, crap, and assembled products which the following article discusses:
CARPE DIEM: iPhone, iPad Study Shows Trade Stats Dramatically Overstate the Value of U.S. Imports from China
Again, our political betters yammer on but in reality would only be bringing back $2 per hour jobs.
A Tarnished Turboprop Clouds China’s Aviation Dream. Sad story, but one not likely to change because China tried again. Maybe someday China will master this manufacturing, but not likely today, or tomorrow, don't expect to fly in a Chinese airliner in the US in your lifetime.
Regardless, while the US manufacturing sector remains a key player in the world, our manufacturing employment levels continue to decline. This is because we are always achieving greater productivity, by manufacturing more product with less labor. US Manufacturing Growth
We will have ever fewer manufacturing jobs, just as over the past 239 years we have had fewer, and fewer agricultural jobs. And just as today there are those who say, "all value comes from manufacturing," there were those then who said, "all value comes from productive land." Physiocracy was a silly idea then, and manufacocracy is a silly idea now. Yeah, I made that word up.
Interesting what people will believe. Neither agriculture nor manufacturing deserve this pedestal. Both will continue to bleed employment numbers. This is something we will need to understand, but cannot stop, and likely cannot alter.
Of course, if we want, we could get rid of NAFTA, and the other free trade agreements, and charge high tariffs on any imported products. But that would simply drive down quality, and increase costs, and we all want high cost, low quality products on our shelves, right? No, pretty much no one wants that.
The inexorable move towards less manufacturing labor input will result in fewer manufacturing jobs, and insecurity in all existing manufacturing jobs. This will not change, at least not until the last manufacturing job vanishes out of existence. What we must do, is find ways to help our fellow Americans caught in this process. The change is coming much more rapidly now. It used to be that these changes took generations, and the young simply move away from the farm, and took other, better, jobs. Now these changes happen so rapidly, many are caught mid career.
Trump, Hillary, and Sanders are not the answer. A 19th century tariff policy, and the 19th century welfare state are not the solution to the problems of the 21st century. And while we need to continue moving towards the Third Way, that will not likely happen until the parties begin to accept these political changes, and select candidates willing.
The original article floats the question that perhaps the ideas PPI is espousing could work?
"PPI is a centrist Democratic think tank that, while not formally affiliated with the Clinton campaign, is effectively an organ of the party establishment; it bills itself as “the original ‘idea mill’ for President Bill Clinton’s New Democrats.” Its new report was widely interpreted as a bid by centrists to show they could compete with Sanders on big economic ideas.
So what were those big ideas? In addition to free trade (including ratifying the Trans-Pacific Partnership, which Sanders and now Clinton oppose), there was a grab bag of fairly familiar progressive policies: infrastructure spending, paid family leave, improved workforce training. The handful of bolder proposals seemed unlikely to inspire popular passion: Rather than make college free as Sanders wants to, for example, PPI would encourage colleges to offer cheaper three-year degrees. PPI also wants less regulation, lower corporate tax rates and a shift away from taxing income and toward taxing spending. None of those proposals are necessarily bad as economic policy, but in a year of insurgency they seem like strange politics."
The free trade idea, the 3 year college degree, reduced regulations, lower corporate tax, and sales tax as opposed to income tax are good ideas, the others are poor ideas. Improvements would be, the US simply charges no tariffs or duties on any imported products, zero rate the corporate tax (it is just a hidden tax on the individual, and the poor are hit hard by this tax), eliminate the income tax, and replace with a sales tax on all retail goods, and services (I would start this at 100% of cost of government today, and then decline annually by 2% until we reach government taking 10% of the nations GDP with a balanced budget Constitutional Amendment), 3 year college degrees should be required, with 2.5 years in major, and 0.5 years related to major, also the university should test, and the college should teach, removing the teachers ability to grade inflate (better yet would be to go to an independent outside agency which performed all testing for all colleges and universities removing the bias threat from the colleges, and universities completely).
Solved! See that wasn't so hard.