Yes, it's true. China has passed us as the world's number one manufacturing country. But we're number two and a strong number two AND, considering the massive population discrepancy between the two countries, number two isn't bad (we're 5% of the world's population but produce approximately 20% of the world's total manufacturing output). India (the other country that's supposedly taking all of our jobs)? They're currently a distant tenth.............................................................................................The fact of the matter is that manufacturing has grown and grown markedly since the 1940s - from $300 billion (in 2010 dollars) in 1947 to $1.8 trillion in 2011. Yes, there has been a decrease in employment relative to manufacturing but that decrease has primarily been due to automation and NOT off-shoring. The fact that we're continuously shouting nativistic fears about primitive Asiatics ruining the country by stealing our jobs isn't just counterproductive but it's inaccurate as well (yes, obviously there is some off-shoring but the effects of it have been greatly exaggerated).........................................................................................Now, as for manufacturing as a percentage of GDP, yes, that indicator HAS gone down (from 20-something percent in the '70s to 13% today). But that's predominantly because the other sectors (health-care, retail, finance, retail, etc.) have grown at an even more robust rate, not because the manufacturing sector has fallen off (it hasn't, it's quadrupled since the 1940s)....So, please, can we just stop panicking.......................................................................................P.S. Look at the chart (information from the dissidentvoice.org, a progressive web site, and the Department of Commerce's Bureau of Economic Analysis). Output is going up at the same time that employment is going down. This is a clear indicator that it's automation and not off-shoring at work here.
34 comments:
The hell with this nonsense Will,lets get to something of more importance......did you happen to notice....the "real" WVU showed up today.
A couple of points, Will.
One, your chart is somewhat misleading in that the scale on the left starts at zero, while the scale on the right starts at about 50% of the top value rather than zero. That difference in scales exaggerates the drop in employment relative to the rise in output.
Two, it would be interesting to see the split between the effects of automation and off shoring on the drop in employment
Yes, I've noticed both parties like to cry out that manufacturing in the U.S. has plummeted and somehow we need the federal government to fix the problem.
Turns out it's manufacturing jobs that have fallen off, but manufacturing itself remains strong and (surprise!) has become more efficient over time.
I'm just tired of the campaign lies and the calls for government to be the solution to every problem.
Watch the trend over the next 15 to twenty years. In the meantime read Three Billion New Capitalists. It is an interesting book, and it does make some very strong points about the gradual shift in economic power that is occurring and likely will continue as productivity in eastern countries continues to improve.
The good news is eventually the cost of their product will increase do to rising wages and perhaps then we will have a truly "competitive" playing field.
Ops, that's right the post wasn't about trade and competitiveness. Sorry,
PS: The book was written by a trade negotiator in the Reagan years.
Yeah, I did, Russ. Pathetic, absolutely pathetic. They're probably having second thoughts about leaving the cozy Big East and having to travel to Texas (over 2,000 miles) for consecutive Saturdays.............It isn't my chart, Jerry. I pasted it from the progressive web site, the Dissident Voice, and they got it from the Commerce Department.............You nailed it, HR. Manufacturing has essentially quadrupled since the 1940s (adjusted for inflation). Yes, some of the jobs HAVE left. But those are of the bigger companies and, since 70% of all new jobs are gained in smaller businesses, I think that we're probably going to be OK going ahead. Hell, with the higher costs of transportation, taxes in some of these smaller countries (Sri Lanka's corporate tax rate is 35%), and the huge discoveries in natural gas, we might even start challenging China again. Me, I'm starting to get damned optimistic.
Is it better if I say "the chart" instead of "your chart"? My point is unchanged.
Please consider this take from BusinessWeek Mag:
http://www.businessweek.com/stories/2007-06-17/the-real-cost-of-offshoring
Not sure if this is an affirmation of what you are saying or maybe the issue is more complicated. What I can say is I have seen too many friends and family lose their jobs...No matter what the "cause" may be, it can be rather unpleasant.
The example of employment by the
railroads is particularly instructive. The labor intensive days of short steam trains with a three crew
loco and a two crew caboose have been replaced by two guys in the
cab and mile long trains-the yard
switching done by one fellow with
a remote radio controlled locomotive. (conversely, truck
driving seems to be employing ever more).
Jerry, it's simple. The left chart starts at zero and moves up at 400 billion dollar increments. The original number is somewhere below 300 billion and the ending number is around 2 trillion. And the right chart starts at where the employment was in 1947 and ends in 2011. If they had truncated the right side to include zero, the downward trend of employment would have looked LESS severe. I'm not exactly sure what your point IS.
Marcus, I lost my teaching job of 15 years when the school districts decided to go with a different vendor. You're right. It isn't at all pleasant (the fact that my next job payed $24,000 a year less, especially).............BB Idaho, great illustration.
They both should start at zero. If they did, the drop in unemployment would only fall halfway down the graph and not look as severe. Essentially, the chart is visually overstating the drop in unemployment relative to the manufacturing output.
Well, if the downward trend was less severe, it would give the those on the left who constantly say that we're bleeding manufacturing jobs less of case to say that, now wouldn't it?......And, besides, this overstatement only becomes apparent after 2000. Before that the lines roughly follow each other.
Yes it would. That is why the chart was drawn the way it way. Many people look at the picture without looking at the numbers.
RN said: "The good news is eventually the cost of their product will increase do to rising wages and perhaps then we will have a truly "competitive" playing field."
Yes, exactly. Stuff evens out if you leave matters to the people, instead of the "old model" in which the ruling elites erect artificial trade barriers at the borders in order to enrich themselves (through tariff money) and to wrongly enforce their personal economic preferences (i.e. "Japanese cars are bad") on everyone in the nation whether or not it is in the people's interest.
The chart actually overemphasizes your point that automation, not off shoring, is the cause of the drop in manufacturing employment.
.
You mean like this?
http://1.bp.blogspot.com/-fjZXr_phc-k/UHrAuXNtFLI/AAAAAAAASSM/SsMWi4VOM8A/s1600/tweet+10-14-12.JPG
Ema Nymton
~@:o?
.
Bain actually caused a net gain of tens of thousands of jobs.
Anyway, I wonder if Ema Nymton will post any pictures of the Chinese companies that received stimulus money to build equipment in competition with American firms.
.
"Bain actually caused a net gain of tens of thousands of jobs."
In SOCIALIST/COMMUNIST China.
Chump.
~@:o?
.
Also, I don't blame Romney for hiring the best workers for the best jobs, even if it makes racist who hate brown-skilled or "yellow"-skinned people get angry.
But even with the idea of hiring the best for the job, no matter what country, he created tens of thousands of American jobs as a businessman.
This puts him hundreds of thousands of jobs ahead of Obama, who has lost hundreds of thousands of jobs. While, again, outsourcing and creating jobs in China. Something which you ignore since you are a blind partisan not concerned with the facts.
And by the way, Ema,how is that electoral college picture looking? I noticed you stopped posting it. hehe.
From what I have been able to glean, no one knows how many jobs were created/lost by Bain. Probably lots of both. In any event, it was not their business to
create jobs; they were a private
equity firm that invested by buying
and selling control in companies.
Apparently very lucrative, they even made millions off companies that went bankrupt as well as companies that succeeded. My experience (my company was bought
by a private equity firm) is that they put up cash and hold. In our case they did not invest in the business, but were content to
take profits for a few years.
We were once again sold, this time
to a company that knew the business, what they wanted and what to invest in. As for our
interim private equity folks...
We were surprised they knew nothing of our business...but not
shocked when they (Lehman Brothers) collapsed.
I don't have a problem with the chart, Jerry. You start at the floor and work to the ceiling. I mean, yeah, I suppose that the Commerce Department (the Obama Commerce Department, no less) could have started the left graph at 100 billion and worked its way up at 400 billion dollar increments from there but to start the employment side at zero would have been ridiculous in its superfluity. And even if you didn't like the graphs at all, you still could have examined instead the raw data. Manufacturing output in 1999 was 1.45 trillion and 1.85 trillion in 2011. That's a 28% INCREASE. Compare this to the fact that employment in manufacturing went (during that same 12 year time period) from 17.6 million to 11.8 million; a 33% DECREASE. That sounds to me like a pretty damn sharp inverse relationship, Jerry.
Oh, and Ema, you obviously didn't get the memo - http://www.youtube.com/watch?v=Fabx8MCQ61Y.
Yes, there was a 33% decrease in unemployment but the graph makes it appear as a 100% decrease to the casual observer.
There is a reason why unemployment was placed on the right side. People have a tendency to look at the left side and bottom of figures to get ranges of the data. They examine the right side less closely. Making the drop in unemployment appear larger than it is over-emphasizes the drop in unemployment relative to manufacturing output.
Why would it be ridiculous to start employment at zero? Then, a 33% drop would be accurately depicted.
It sounds like you are in favor of misleading graphs...at least as long as they support your position.
I didn't interpret it as a 100% decrease and I doubt that anybody with an IQ over that of onion would have, either. And how do you know WHY the people at the OBAMA Commerce Department did what they did? They wanted it to look like manufacturing employment was plummeting? That makes absolutely zero sense (there, I started at zero).
And, yes, the chart came from the Bureau of Economic Analysis and the Bureau of Labor Statistics. Bureaucrats and government paper-pushers - so, yeah, maybe you're right, these folks did screw up.
Oh my god, Will. Do you enjoy twisting things around? First of all, the graph is not from Bureau of Economic Analysis and the Bureau of Labor Statistics. It was created by Mark J. Perry, Professor of Economics at the University of Michigan and author of a popular libertarian website.
Secondly, it is from this article from Dissident Voice which is an article about how US manufacturing is not declining. They conclude that "These data cannot be explained by offshoring. There is only one explanation – automation."
It is a progressive site using a libertarian's graph based on government data to say manufacturing in the US has not been declining and that the manufacturing data does not support the contention that the decline in manufacturing employment has hurt manufacturing output.
To say that "the people at the OBAMA Commerce Department..." and "the chart came from the Bureau of Economic Analysis and the Bureau of Labor Statistics. Bureaucrats and government paper-pushers..." is absolutely wrong.
I suggest you read the article.
I read the Dissident Voice article and that's where I got the graph.............I'll tell you what, Jerry. I'll consent to the employment numbers going down to zero but you have to consent to the time-line going back to 1792 (the year before the cotton gin was invented), the last year that the manufacturing employment stat was anywhere close to zero. That way the employment line will flatten out and the dip that occurred between 1999 and 2011 will once again look like the very sharp decline that it in fact IS (33% in 12 years). Sound fair?
I stand corrected. Perry did the graph but the data did in fact come from the DEA and DLS.
Fine, take it back to 1792.
Yes the data did come from the DEA and DLS, one gave the manufacturing data and the other provided to employment data. Neither did the comparison which you now agree with.
I think we have killed this horse. On to the next one.
And at least we did it without calling each other names and defaming each others parents. Thanks!
Bloggers can make deals but politicians can't apparently.
Politicians can make deals only with themselves. I call that political masterbation.
Ah, yes.
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