Made in America is back, leaving US factories scrambling to find workers

https://www.cnn.com/2022/10/09/economy/manufacturing-jobs/index.html

by redbell • 4 years ago

197 416 4 years ago

I thought those jobs were never coming back!

All depends on the size of the factory. Too small - can't swallow the large pill which is automation (hiring engineers, consultants, very expensive equipment). But as soon as your payroll hits a certain figure, automation becomes cheaper and bang! small town everybody laid off.

And it isn't all that big a number really.

peteradio2• 4 years ago

I don't know if I believe this POV, from what I've seen automation is an enabler to branch into broader product base.

nyokodo3• 4 years ago

bang! small town everybody laid off.

The labor shortage is changing this calculus very rapidly. I’m not saying it can’t still happen but it’s much more likely that the factory is lacking people to fill in the wide gaps in the automation possible.

kmeisthax2• 4 years ago

Atlas - or, in this case, Xi Jinping - shrugged[0].

Chinese manufacturing went through three phases:

- We can save money by moving our jobs overseas. Sure, it'll blow up our lead times and we'd have to ship goods across the Pacific thrice, but China has 3x the population of the US and the Yuan depreciation makes paying them very cheap.

- We can't move our jobs back to the US! We're all tooled up in China, and everyone else followed us there. If we moved back to the US it'd blow up our lead times and we'd have to ship goods across the Pacific thrice. Plus, we literally can't hire enough people in the US, because China is buying our product just as much as they make it now.

- We are moving production back to the US because our Chinese factory has been shut down for three months due to COVID and it ate through our buffer for shipping delays at the ports. Again. Yes, we will be paying far more for fewer workers, but getting goods across the Pacific is getting more and more expensive anyway and we're losing on money from not having goods to sell every other week.

We are at the third step.

[0] Yes I am aware of the irony of using the title of a right-libertarian political diatribe to describe the actions of a left-authoritarian dictator.

ozborn• 4 years ago

3rd step also includes political instability in China, an even riskier business environment, demographic headwinds along with rising wages and increased fixed automation costs everywhere. Globalization, once "inevitable", has been dead since 2019 and isn't coming back in the foreseeable future.

ggm• 4 years ago

... for the supply of goods to the USA. For supply of goods to the Chinese Middle classes, India, Korea, Japan and emerging markets in africa (who mostly love Chinese investment in their economy without world bank moralisms) none of this applies.

Is the US market still the dominant target for Chinese factories?

KirillPanov• 4 years ago

We're all tooled up in China

And the PRC government forbids the export of tooling.

sylware• 4 years ago

Factory workers are often not really a thing, factory slaves would be more accurate.

Use robots.

redeeman• 4 years ago

you sure have a rose colored view of slavery, dont you?

theandrewbailey• 4 years ago

Do those slaves live on the plantation around back? In China they often do, but not in America.

hprotagonist2• 4 years ago

Now I long for the morning that they realize

Brutality and unjust laws cannot defeat us

But who'll defend the workers who cannot organize

When the bosses send their lackeys out to cheat us?

Money speaks for money, the devil for his own

Who comes to speak for the skin and the bone?

What a comfort to the widow, a light to the child

There is power in a union

collegeburner3• 4 years ago

you realize that was one of the big reasons manufacturing left in the first place? yes hmm why not go unionize right away so nobody moves back after all.

rfrey• 4 years ago

If the only way to bring manufacturing back is to copy the inhumane and dehumanizing conditions of "cheap labor" economies, then we're better off not bringing it back. By outsourcing our cruelty and indifference to suffering we can have the fruits without staring at it every day.

mechanical_bear• 4 years ago

Union, fornicate thyself.

jjtheblunt• 4 years ago

or is there illiquidity in labor markets, and ensuing stagnation?

legitster3• 4 years ago

How would a union help here? For all their benefits, unions don't generally increase labor participation.

flockonus• 4 years ago

Back on the first wave of "built in America" workers could afford to buy houses and have a decent standard of living with their salaries, so it was an attractive proposition. Now lower income salaries can't afford a decent living, no wonder workers are not interested in such jobs, they can't make a good living on it.

It's not that the factories are being cheap (at least not in all cases), but the gov has to step in and bring real estate price under control, this is often the biggest economic gap that hurts our generation.

Something1234• 4 years ago

Or rent prices in general. It's absolutely obscene how expensive rent is where light rail is available near Philly. $1400+/month for a 1 bed room. I can rent cheaper inside of Philly proper.

RobRivera• 4 years ago

sure, but then youre in Philly proper

getcrunk• 4 years ago

Real estate prices are just a symptom of our never-ending inflation due fractional reserve banking.

https://workableeconomics.com/

Explains it all pretty well

anon84873628• 4 years ago

The Georgists would like to disagree with you :-D

And apparently we can thank the Petro dollar system for gutting US manufacturing.

raincom• 4 years ago

Despite inflation, prices of many goods are cheaper today: look at laptops, monitors, TVs.

gjsman-1000• 4 years ago

I am all in favor, and beg for a bill, that would simply declare that publicly-owned, publicly-traded companies may not legally possess housing, unless they built it themselves. Manage, yes; own, no. Never going to happen though.

Retric• 4 years ago

It’s mostly local voters that are the issue not companies.

Good luck trying to lower property prices. This is a case of what’s good for the country is rarely good for the people making these choices. People living outside a county don’t decide their policies are but still suffer from them.

WalterBright12• 4 years ago

That's not going to fix anything.

collegeburner3• 4 years ago

thank the stupid loose monetary policy with interest rates never coming back up and balance sheet never coming back down. the fed wanted to make sure people could buy housing and its strategy was to do that by making loans cheap but this distorts the market.

nordsieck• 4 years ago

It's not that the factories are being cheap (at least not in all cases), but the gov has to step in and bring real estate price under control, this is often the biggest economic gap that hurts our generation.

This will never happen.

The only way to get affordable housing is to build a lot more housing than is currently being built. But that means:

* Higher density living

* A sustained decrease in residential property values

Both of these would be very unpopular with voters. The second point would also probably cause some serious economic problems, as a lot of peoples' and businesses' decisions are based on property values generally going up faster than the rate of inflation.

anovikov• 4 years ago

Bingo! Real estate prices and rents are so high precisely because this is what the majority (that is, homeowners) want: they want their home equity to go up. And they will vote for whoever makes it more likely.

Want to solve it? Scrap democracy (so no one gives a damn what people want), or scrap market economy (so the Party will provide free housing to everyone). I'd much rather stick with expensive rent.

missingcolours• 4 years ago

This seems like a very Big Coastal Metro-centric view that is probably true in those areas but doesn't capture what's happening elsewhere. Home prices in Metro Detroit, for example, used to be quite reasonable and have recently exploded to being rather unaffordable for most people. There hasn't really been any population growth to speak of, so it's not clear to me why would we need or want more housing to be constructed in order for prices to be reasonable, as was the historic norm.

epicureanideal5• 4 years ago

Higher density is not actually required. There are hundreds of square miles of unbuilt land even within 30 minutes driving distance of Palo Alto and the rest of Silicon Valley. It's just not possible to build there due to environmental regulations, government ownership of the land, and so on.

As for sustained decrease in residential property values, yes, that is the real problem. Voters who own homes won't vote for policies that let everyone else have a cheaper home. It is going to need to happen in some other state, and that state will need to draw away so many workers that California house prices fall anyway, and then maybe the policies will change.

epicureanideal5• 4 years ago

Both of these would be very unpopular with voters.

We need to find a way to never be in this situation again. For example, create Special Economic Zones where by law housing construction is expected to constantly be happening, and it is impossible to prevent it by law.

JumpCrisscross3• 4 years ago

that means

Density is unavoidable. But residential values can freeze or barely grow in nominal terms. That won’t cause a crisis.

Public housing built to be sold at an affordable price, not let to wards of the state, maybe with an aim at redeveloping blighted areas, is a model I’m fond of. (See Roosevelt Island.)

bamboozled9• 4 years ago

Americans aren’t going to voluntarily move to high density housing to work in factories. It’s just not the culture.

geysersam6• 4 years ago

Why should residential property values increase anyway? It's not like the population growth in the US (overall) is staggering. Property prices the last couple of decades are largely artificial. They've long been disconnected from the supply and (non-speculative) demand, that's (one important reason) why the market's been unable to solve the problem. The signal is broken.

LAC-Tech2• 4 years ago

Everyone loves to talk about fixing the supply issue, but no one wants to touch the demand issue.

bigbluedots• 4 years ago

One solution would be to discourage the use of housing as a vehicle for investment, perhaps by requiring that in most cases the owner lives in the property.

Akronymus3• 4 years ago

* Higher density living

i don't think it'd actually be that unpopular IF it comes with decent public transport + walkability + mixed use and such, like in europe.

I HIGHLY doubt it is possible to do in the near term in the US.

ksec• 4 years ago

What about.... building a massive new City somewhere?

A new City for the Wealthy, with modern infrastructure.

Another new City that is designed for Manufacturing, with new housing and infrastructure based on those needs.

krageon2• 4 years ago

It doesn't mean high(er) density living at all (at least not how it is understood in the rest of the world). The US is mostly empty space, no flats or whatever required.

thrown_226• 4 years ago

People have an idea that the suburbs were this magical place where you had cheap housing, fast commutes, large gardens and a family of 6 children.

Just because you see it in a sitcom doesn't mean it's true. Or to quote the guys who did the big bang theory: "We went to the apartments of real physics post grads and they were too depressing to put on television." The same was true for suburbs in the 1950s which could be afforded by a family of four with only the father working.

mcv2• 4 years ago

The second point would also probably cause some serious economic problems, as a lot of peoples' and businesses' decisions are based on property values generally going up faster than the rate of inflation.

But that's a big problem. If housing prices go up faster than inflation, then eventually most of our costs of living will be housing. And here we are, apparently.

I think it's also a big problem that housing costs are ignored in inflation calculations. I think that has lead to the rise in housing costs in general having been ignored. And now it's become a problem.

scaredginger• 4 years ago

I think something missing here is that people often want to live in urban areas. For many young people, these are the places where all the interesting things are happening. You're always surrounded by other people and culture. Prices are high in these areas because they are so attractive; we need to increase supply to meet it

lr1970• 4 years ago

* Higher density living

USA is non-uniformly populated. The middle of the country is nowhere as dense as the coasts. Our goal as a society should be better land use across the whole country. That would require incentives on the government level.

just_boost_it• 4 years ago

More like step out. The biggest issue with housing today is lack of supply, and the biggest cause of that is the restriction on development imposed by planning regulation. It shouldn't be a 20 minute walk from a detached house to downtown San Francisco. It's a nice idea, but every house like that could be part of an apartment building housing 10 times as many people. US cities have jobs, entertainment, amenities and services, so demand is always going to be high; supply has to be allowed to meet it.

0x445442• 4 years ago

Or bring back manufacturing to the flyover states where there is plenty of land and affordable housing.

throwaway1777• 4 years ago

I don’t agree with this anymore as housing prices exploded last year in areas that don’t have any lack of supply or building constraints.

MR4D• 4 years ago

but the gov has to step in and bring real estate price under control

You do realize that the government created the inflation problem, right? The high amounts of stimulus spending plus years of deficit spending created this situation.

Consultant324523• 4 years ago

Let's not let the federal reserve off the hook with insanely low interest rates for so long.

strangattractor3• 4 years ago

True but inflation was triggered by the Russian Invasion of Ukraine.

testfoobar• 4 years ago

No politician wants to admit that the source of housing inflation is the government: ZIRP, QE, stimulus, deficit spending combined with ever greater regulations and restrictions on land use have fused together into ever rising housing prices.

It appears that no sensible politician is willing to admit the problem let alone propose comprehensive solutions.

WalterBright12• 4 years ago

the gov has to step in and bring real estate price under control

No government has ever managed to repeal the Law of Supply & Demand. Because it's The Law. Communist countries never succeeded at that, either.

WalterBright12• 4 years ago

Denial of the Law of Supply&Demand is about as effective as denying the Law of Gravity, or passing a law that π=3.

A couple of obvious examples of failure are rent control and anti-gouging laws.

uup5• 4 years ago

Communist countries did succeed because they controlled demand. Although I don’t think people would like the solution that much, e.g. three families living together in a 3 bedroom apartment, one family per bedroom.

geysersam6• 4 years ago

Real estate prices today have little to do with supply and demand. Why else have real estate prices grown hundreds of percent all over the developed world in the last 3 decades, despite relatively low population growth?

vore2• 4 years ago

If it had enough political will do, the government could build more supply and reduce prices, no, like in Hong Kong and Singapore? There are a whole spectrum of government-directed solutions to try keep prices down that comply with supply and demand.

monetus• 4 years ago

I always felt like calling the communist countries communist was like calling our republic a direct democracy. Maybe in spirit I guess, but not exactly in practice. You're in California right? What is the rent control/housing like where you are, if you don't mind my asking?

tmnvix2• 4 years ago

Regulation can influence supply and demand. Raising interest rates lowers demand (I would say most significantly it lowers speculative demand).

landemva3• 4 years ago

step in and bring real estate price under control

The feds can step out of real estate manipulation by removing the mortgage interest deduction.

astrange27• 4 years ago

Don't the feds create the entire residential mortgage market in the first place through Fannie Mae? That's why we have flat-rate mortgages when other countries have ARMs.

That one tax deduction doesn't matter, not when there's a shortage. It's already the most people can afford to pay.

AmVess• 4 years ago

Government is one of the primary reasons why housing is so expensive. In some areas, the cost to develop a plot of land has gone up 10x in as many years. Permit process is expensive and takes time. Laying utilities is expensive. Paying the myriad of fees is expensive.

In one place I lived, the cost of developing a plot of land for single family use was almost $70k, and that was not an expensive state like California.

And then mortgage rate hikes have to be considered. Buyers are walking away from contracts and homes being built because rate hikes made the homes unaffordable.

Less government is the solution, not more.

socialismisok3• 4 years ago

Investors owning real estate has done more to move prices up than permits.

Investors buy a quarter of all stock and have an incentive to lobby for keeping supply low.

The solution is more government regulation reducing the number of units big investors can own, building small public housing units throughout their cities (not big projects), and making investing in property less appealing for big players via rent control, landlord tenant laws, zoning up, etc.

joe-collins5• 4 years ago

Existing housing is expensive because a substantial portion of the stock isn't owned by the residents. Housing is used to extract rents, by wealthy individuals or businesses, and rent-seeking drives up prices.

New housing is expensive because of safety regulations, environmental regulations, and zoning restrictions. Those categories are listed in increasing order of negotiability: some zoning makes obvious sense (e.g. separating industrial areas from housing), but housing density mandates seem less defensible to me; meanwhile, I don't particularly feel like relaxing safety unless something can be demonstrated as clearly irrelevant due to age, or requiring gross overbuilding. I invite someone more fluent in the subject matter to enlighten us with the relative impact of each factor.

nine_k7• 4 years ago

If it were so easy as "less government"! (Which, I agree, is often a good idea.)

The problem is that a house is seen as in investment vehicle. Buy a house, its value will always grow, they said. So people who bought houses expect their values to grow, and loathe their values to go down even a little bit.

Now the value (aka cost) of a house has grown so much that it's unaffordable for large swaths of regular working population, even well-paid. Cheaper housing is badly needed.

But cheaper housing also means that "value" of existing houses will go down! Either from being next to a cheaper house, or from a general downturn on the housing market (aka housing becoming more affordable). Every house owner will hate that! And these house owners are voters.

Now life savings of an old lady from the working class depend on a young family from the working class being unable to afford a similar (or any) house. We're in a pretty bad situation here :(

barbariangrunge• 4 years ago

Isn’t the actual problem competition from factories overseas they have lower safety standards and wages? Just because there’s more housing doesn’t mean you suddenly have a good wage. You still have to save up for retirement, and some people invest in mutual funds instead of buying property

herbst2• 4 years ago

Overseas European here. Our safety standards are likely on par or even higher in many cases. Wages for factory workers surely are higher on average as well and you don't save up for your retirement here as this is already deducted from your wage or partly funded by the government.

MisterBastahrd• 4 years ago

I saw a commercial today from Greg Abbott in Texas claiming that he wanted to pass a law that made income tax permanently illegal in the state. Meanwhile, people are getting gouged with almost no positive movement in income year over year at the same time that properties are appreciating about 15% a year in value.

Pmop• 4 years ago

I will never understand how today's industry productivity is the highest it has ever been, yet workers wages/purchasing power hasn't followed, it even got reduced. What the heck is going on?

nadagast• 4 years ago

Isn't it because there's a ton of new supply of labor from around the world?

qikInNdOutReply• 4 years ago

The west defeated the socialist alternative lurking behind the iron curtain and all bargaining power of unions went to hell. Rollback started right after the discovery what a brittle giant the Sovjet Union really was (about 1970s-1980s) and kept going ever since.

Stand alone, with no gun to its head, capitalism auto decays into the neo-feudalism of the guilded age. And alot of the gullible citizenry supported this return to nothing.

perryizgr8• 4 years ago

Cheap labor, easily available. People willing to work for lower and lower wages, since it is still better than the conditions in their home country.

mschuster914• 4 years ago

Simple: A lot of the productivity gains of the last decades is thanks to globalization, automation and digitalization - basically, many high-paying manual jobs were eliminated by machines, a lot of lower-paying manual jobs (or environmentally problematic production that would have needed expensive adjustments in the US/EU) was shifted off to China, and digitalization eliminated or vastly improved paper-pusher jobs.

Additionally, the standing of unions went down over time, as a combination of legitimate unions-gone-rogue scandals, anti-union legislation being enacted and union-protection enforcement being reduced.

The result was that the capitalist owner and leadership class enjoyed absurd amounts of net worth gains, and the worker class was left unemployed or with stagnating wages at best. To prove that: CEO payments exploded 940% since 1978, S&P went up 707%, while average worker pay went up only 12% [1] in the same time frame.

[1] https://www.epi.org/publication/ceo-compensation-2018/

LatteLazy3• 4 years ago

The upper limit for wages is how much the work produces. The actual wage is determined by how many other people will do the job for less.

This is why when economists say wages are linked to productivity it is true, but only in the same way my cars theoretical top speed limited to the speed of light...

Tangurena23• 4 years ago

All of the profit from increased productivity has gone to the executive caste. None has gone to workers.

Additionally, widespread and unchecked propaganda has brainwashed the public into believing that unions are bad and that the most evil word you can say in public is "socialism".

tmnvix2• 4 years ago

One possibility:

As productivity has increased, so has availability of credit. Servicing debt is soaking up our increased productivity. I don't think it's just a coincidence that the FIRE sector has grown so spectacularly.

Valakas_• 4 years ago

Because what matters was never productivity but competition. That's inbuilt into the capitalist philosophy. With that, it doesn't really matter that X company's productivity skyrocketed if Y's company, X's competitor, also does. They both will try to grow has much as possible, invest as much as possible in R&D, (...) or they are out-competed by the other.

We should always remember: If a company could, they would have free labour. Expert professional volunteers. That's how a company can maximize their profits. So every single year, every company is, unless forced by laws, wage competition (from other companies) or by force (unions), behind rationalizations, pushing for, unconsciously, getting close to that ideal of free labor.

Also remember that today, free labour has a limit. They can't really pay zero, because people have mortgages, etc. So actually, the modern "zero" is when the workers have zero profit, ie, savings, or even go into constant debt, and have the government pay for it with subsidies.

And this is exactly what we've been seeing the last decades.

robertlagrant2• 4 years ago

the gov has to step in and bring real estate price under control

I wouldn't assume the issue wouldn't be resolved better by the local/state/federal government stepping out of this area more.

ReptileMan• 4 years ago

It's complicated... the fed should manage the economy in such way so people are not forced to move in a couple of megacities to find jobs.

dapf• 4 years ago

The government has to step in by stepping out.

1. There is a problem. 2. Government steps in to fix problem. 3. Government creates two new problems by fixing the first one. 4. Repeat x 2

jwond• 4 years ago

Timmons said that pay in the sector is up 5% over the course of the last year

Unless this figure is adjusted for inflation, real pay has gone down.

textech• 4 years ago

Are they assembling or manufacturing? If you need to import all your raw materials then you're not really manufacturing anything and I seriously doubt that anyone in this country is willing to do the dirty bad breaking work for low wages with no prospect of ever owning your home.

yucky3• 4 years ago

with no prospect of ever owning your home.

It's strange to me how often this gets repeated as if nobody can look at Zillow and do basic math.

I just checked a random suburb of Detroit (you know, since we're talking manufacturing) and in Warren MI right now there are 64 houses for less than $100k. There are hundreds more in the city of Detroit, but it's dangerous so people may not want to live there. Plus, there are a ton of factories in Warren, so what better place to look?

No prospects of ever owning a home? Or no prospects of moving straight into your dream home in a hip downtown area near the coast at 26 years old? Let's call it what it is.

guestbest3• 4 years ago

Real estate people think location is so important they will say it three times. I wonder why?

stonogo3• 4 years ago

Now look at Indeed and do basic math. Looking at the job ads for Warren, MI indicate there are no manufacturing jobs that pay more than $20 per hour, and most of those are part-time or term-limited. They're even trying to pay certified forklift operators sixteen bucks an hour. Good luck saving up your 20% down payment on Warren, MI wages.

baremetal• 4 years ago

If you need to import all your raw materials then you're not really manufacturing anything

China imports a large amount of raw materials[1] and yet it is a manufacturing powerhouse.

https://commodity.com/data/china/

formerkrogemp3• 4 years ago

you need to import all your raw materials then you're not really manufacturing anything

What a weird and unorthodox definition of manufacturing. Do you expect every factory to also have an attached mine and lumberyard and smelter and mill?

thehappypm2• 4 years ago

This is a bizarre take. You’re saying if you don’t grow the cotton, your textile factory doesn’t count as manufacturing?

tuatoru4• 4 years ago

“Hiring has been a problem since 2020,” Jennison said. “Hiring experienced candidates that understand the industry, and understand what they’re doing, has been very difficult.”

Business owner expects to pay experienced staff $20 per hour.

There is no staff shortage, there is a failure to face reality among business owners.

barsonme• 4 years ago

What hourly rate do you think is fair for them to pay their employees? $20-$30/hour is ~130%-180% of the median income for Allegheny County, where the company is located.

I honestly don't know what's fair for the jobs the company is hiring for. Maybe they're woefully underpaying! But at first blush it does not appear terrible.

A totally not in-depth look at machinist hourly rates (in Seattle) looks fairly similar to what they're offering.

tuatoru4• 4 years ago

The rate at which people start applying for their jobs. Clearly, higher than "$20 - $30", which we all know means $20.

Something I left out in the interests of brevity is that there was no mention of taking people off the street and paying for their training. That is the indicator of staff shortages.

bsder• 4 years ago

What hourly rate do you think is fair for them to pay their employees? $20-$30/hour is ~130%-180% of the median income for Allegheny County, where the company is located.

So?

Why is it that capitalists can't seem to understand supply/demand curves when it comes to wages?

LatteLazy3• 4 years ago

Avoid using "fair" there is no fair rate because fair isn't really a measurable/definable thing.

We use the market rate instead (not that that makes it a "fair" rate, it's just what we use for pragmatic reasons). If they're unable to hire, they're not paying/offering market rate pretty much by definition.

nostrademons3• 4 years ago

That goes on up the chain, though. The reason manufacturing left the U.S. was because it was no longer cost-effective to pay American wages at the prices prevalent in consumer goods industries. Had we kept manufacturing on-shore, the price of goods would've mimicked services like health care, law, and education, all of which have undergone very significant inflation, much more than the economy-wide average.

The result of this on-shoring craze (modulo automation) is that we're likely to see very significant inflation, basically taking us back to the cost structures we saw in the 1980s. No more cheap Chinese or Vietnamese goods at Amazon or Walmart; if we have to Buy American, expect to pay the differential between Vietnamese and American wages, roughly a 30-40x increase.

LaserDiscMan• 4 years ago

The result of this on-shoring craze (modulo automation) is that we're likely to see very significant inflation, basically taking us back to the cost structures we saw in the 1980s. No more cheap Chinese or Vietnamese goods at Amazon or Walmart; if we have to Buy American, expect to pay the differential between Vietnamese and American wages, roughly a 30-40x increase.

I theorise that it might also lead to a reversal of planned obsolescence and products with a short lifespan. Companies might compete by designing goods based around longevity to justify the higher cost. Household appliances, for example, might be a once in a decade (or longer) purchase as opposed to the throwaway approach.

bamboozled9• 4 years ago

“No more cheap Chinese or Vietnamese goods at Amazon or Walmart; “

Sounds like paradise to me.

fny3• 4 years ago

Lol. There are no experienced manufacturing staff in the US anymore, full stop. This isn't a matter of the price of labor. The US has forgotten how to manufacture things.

Do you remember when Apple stopped making the Mac Pro in Austin because we couldn't manufacture enough screws? [0]

Everyone gave up post '08. The attrition of blue collar work overseas has been painful, so the recommendation writ large has been to avoid going into blue collar work. Even now if a worker takes on a $20 an hour job, they have no guarantee their manufacturing job won't be shipped overseas again. So why choose that career path for even $25 or $30 an hour? It's risky. The energy sector has this problem more severely than any other in part because everyone keeps talking about phasing out fossil fuels. How much would I have to pay you to take a job that a quarter of the country wants removed?

No one wants a blue collar job anymore either. That was the whole point of going to college: you become educated for the right to sit on your ass for eight hours and act like you're doing something worthwhile.

And now you can do that from home.

Compare that to working a skilled manufacturing job where your every movement is measured in a country.

[0] https://www.nytimes.com/2019/01/28/technology/iphones-apple-...

lowbloodsugar• 4 years ago

they have no guarantee their manufacturing job won't be shipped overseas again.

Indeed. This is all just temporary work until China recovers from COVID.

chii• 4 years ago

So why choose that career path for even $25 or $30 an hour? It's risky.

that's just a long way of saying the people aren't paid enough to go into the career.

Imagine if these manufacturer workers get paid as much as a doctor would. People would be rushing to join. Of course, the reason they can't be paid as high, is because their output isn't that valuable - the customers of their output expect a low price.

tb_technical2• 4 years ago

We manufacture arms, ordinance , and aerospace craft pretty well. Also Toyota cars, believe it or not?

mickdeek866• 4 years ago

I'm in industrial controls/automation and also electrical maintenance, currently in-house. We do have experienced manufacturing staff in this country, most of them are immigrants. Technical jobs such as mine are paid pretty well, but especially with our aging manufacturing infrastructure (old, decaying plants) - which China et al are decades away from - there's not enough skill to go around and so we tend to be very overworked, causing further attrition. I guess my question is why can't we just import more talent/skill from places like China, just as we've done in science and medicine? People still want to come here.

The article isn't clear on exactly where the shortages are eg technicians, QA, forklift drivers, operators. The un-/low-skilled positions are again largely filled with immigrants as it is. These jobs, like agriculture (where I worked in a past life), are not for the faint of heart.

As for job security, we Millenials giggle dejectedly to even imagine that to be a thing.

Your point on the college-educated bias against blue-collar work is apt; even if it's better money many simply don't want to accept that we paid through the nose for something that doesn't pan out economically.

Not clear on the meaning of your last sentence ie 'movement is measured in a country'. Do you mean PRC being totalitarian?

w0de0• 4 years ago

There are no experienced manufacturing workers… This isn't a matter of the price of labor.

Nonetheless the shortage may be addressed by increasing the price. Witness the proliferation of software boot camps.

I find myself confused this fundamental mechanism of free markets seems stuck for this market in this nation. Which hidden incentive(s) do I not comprehend?

Is it simply that decades of business acumen and planning assume cheap labor, anchoring executives’ expectations well below what is now required?

mc32• 4 years ago

There also might be a shortage in training or apprenticeship. You don’t export jobs and experience for 40 years and then expect workers to magically have the necessary skills from the get.

midoridensha3• 4 years ago

Yes, you do, if you're an MBA grad. From what I've seen over several decades, it seems like they've long expected qualified people to just magically appear whenever they need them, even after a big layoff.

legitster3• 4 years ago

I have to believe that the quote must have been scrambled in the article. Why would an assembly line worker need to be experienced or understand the industry?

I could see them having two separate problems - not finding enough unexperienced workers at $20 an hour, and separately not finding enough experienced engineering candidates at any salary.

systemvoltage• 4 years ago

Business owners are the last ones to blame here. With the current USD exchange rate, manufacturers are facing intense battle on both labor and supply fronts.

Here is the root cause:

Panic led to lockdowns. Lockdowns led to fiscal stimulus. Stimulus led to inflation. Inflation led to monetary tightening. Tightening leads to recession.
The panic wasn’t free - and the bill is coming due.

https://twitter.com/naval/status/1574638443237294080

Stimulate the hell of out the nation's economy to the point where we have the "Great Resignation". Then go on to blame business owners who are trying to bring manufacturing back to US. Just completely preposterous, illogical and misplaced.

Tangurena23• 4 years ago

One of Trump's earliest actions was to stop immigrant work visas: that includes H1-2, EB1-3 visas. He was unable to block only Muslims, so instead he blocked everybody. That's about 2 million temporary workers that weren't able to come work here. The "problem" was building up before 2020, it has just come to be noticeable only after the change in administration.

legitster3• 4 years ago

This shouldn't be a surprise. We kind of knew the favorability of offshoring was changing, and we also knew the demographics for cheap labor were also going to end. Covid just ripped the rug out a lot faster on both.

z7• 4 years ago

Not really a surprise when looking at the US male labor force participation rate from 1990 to 2021:

https://www.statista.com/statistics/191725/us-male-civilian-...

1990: 76.4%

2021: 67.6%

epakai• 4 years ago

Just in the last decade 4% more of the population has reached retirement age. Wouldn't be surprised if it makes up the bulk of the participation change since 1990.

https://www.kff.org/other/state-indicator/distribution-by-ag...

ckw• 4 years ago

This is lfp for everyone 25-54. The key point is more like 2000, when female lfp peaks. I’d argue it’s been in secular decline since, though the severity of the decline is temporarily understated, because we are at a cyclical peak.

https://fred.stlouisfed.org/series/LNS11300060

jraby3• 4 years ago

This discounts how many women are the main income providers today vs 30 years ago.

astrange27• 4 years ago

It's mostly because the population is older now. Prime age employment (25-54) in the US is quite healthy right now though.

arpowers• 4 years ago

CNN is an unreliable place for information. Without doing further research I assume they are spinning things for democrats to make things look better than they actually are. (Same thing goes for Fox News and any other biased media)

astrange27• 4 years ago

You're out of date, CNN is under new ownership who are turning it into a center-right news channel.

1letterunixname• 4 years ago

Oh god: HN parroting CNN parroting Biden. Reminds me of tonight's Last Week Tonight episode in several ways.

Big picture: Xenophobic, isolationist tendencies are leading indicators of downfall of a society's openness, net positive immigration of talent, technical superiority, and leadership in the world. China is America's factory. There is little technical know-how left in America to make things at scale, and there's no way to do it economically. 98% of the supply-chain is global. "Factory owners" might as well give it a go to get some grants and then outsource it to Africa.

nine_k7• 4 years ago

Trying to lower your dependency on an increasingly hostile and totalitarian partner is not isolationist, it's prudent.

Ask Germany how well the continued dependence on Russian gas, despite the increasing authoritarianism and belligerence of Russia, has panned out.

lazyeye2• 4 years ago

It's funny...walk into a liquor store and shoot someone and you can get the death penalty.

Advocate an economic policy that destroys the local economy in particular locations, bringing all the social ills that come with that, unemployment, societal breakdown, drug addiction and arguably 10's of thousands of deaths over time and you get, well, nothing....

It's the kind of thing that might make you end up voting for a reality television star....

krapp2• 4 years ago

It's the kind of thing that might make you end up voting for a reality television star....

... who was a billionaire globalist known for his anti-labor practices and ruthless big business hyper-captialist ideals. Whose literal catchphrase was "you're fired." Who was the physical embodiment of everything you should have hated, but you either couldn't see it or didn't care because the same corporate capitalist apparatus that stole your livelihood also beat a case of Stockholm Syndrome into you.

lazyeye2• 4 years ago

Putting aside your underlying assumption that people are stupid (not like us), given how badly some of these people have been treated it can actually make perfect sense to vote for a candidate like Trump.

You achieve a couple of things, firstly you hopefully introduce some pain and unhappiness to the lives of all the right people. The smug, complacent people that have been benefiting from the current status quo and sneering at others that are not doing so well. Any discomfort you can bring into these peoples lives is well-deserved and the right thing to do.

Secondly, whilst voting for any of the traditional parties is obviously wasted given the history leading to that point (they demonstrably don't give a shit), voting for an outsider at least sends a message that might just be heard for the first time in a long time.

I realise that Hacker News comments section is made up largely of what Brett Stephens describes as the "protected class" so the points I'm making are not going to be appreciated but I'm just saying...

https://www.nytimes.com/2022/07/21/opinion/bret-stephens-tru...

lambdasquirrel• 4 years ago

One honest question I'd have about this.

If we started buying stuff made in other countries because it was cheaper, then if we made that production come back to the U.S., wouldn't that mean that the prices would have to go back up? Just a thought experiment, but I'm unable to find a way around it.

exhibitapp• 4 years ago

Yes, it's an inflationary effect for sure - deglobalization

kaslai• 4 years ago

Yes and no. Real wages in US manufacturing have been on a steady decline for a long time now, and the cost of manufacturing goods overseas has been steadily increasing. After factoring in all associated costs with importing goods from a place like China, the difference in cost might even tip towards made in the US being cheaper in the long run. That said, a lot of countries other than China do still have cheap slave laborers that we depend on to give us cheap stuff, and we just can't compete with that using our domestic work force. Also if the local workers unionize and push wages up more towards what they would be had they kept pace with inflation, then local goods will be far more expensive. The cost of a new factory would certainly inflate a lot of short term prices too.

All that said, I know a lot of people that would be willing to pay a substantial premium for well made goods that were produced domestically. Everyone has experienced just how terrible the goods we source from overseas often are, and if paying double or triple for something means that you get a useful lifespan that's 5 times longer, a lot of people are willing to pay that. There are also a lot of people that would happily pay for goods that they know for certain weren't made in a Sri Lankan sweatshop.

swagasaurus-rex• 4 years ago

I think what we need are product reviews that aren't so easily gamed by $$$. As it is, you don't know if the premium you pay for a product translates into quality.

bee_rider• 4 years ago

Probably yes, but some of the countries we've outsourced to have improved their quality of living. So it is possible that made in America could be cheaper than making it overseas and then shipping it over (I think this is unlikely, but it is at least hypothetically possible).

Alternatively, touched on in the article, it could be seen as preferable to get some supply chains entirely inside the US -- would have been nice to have more US mask manufacturing a couple years ago.

They didn't mention any changes to law or trade policy in the article so I guess these companies are looking in the US for economic reasons. They might just see the shortened supply line as worth the US manufacturing costs...

gnopgnip• 4 years ago

Generally yes prices go up when goods are manufactured in higher cost areas.

But the profit/price can be the same with higher labor costs if the manufacturing efficiency is improved(due to automation mostly), or costs like shipping and taxes are lower.

nso95• 4 years ago

Of course

Tangurena23• 4 years ago

Labor is a tiny fraction of the cost of manufacturing. The media likes to make it seem like the cost of labor is the largest part of goods.

kurthr3• 4 years ago

Exactly, a huge part of the delivery of low cost Chinese goods was subsidized delivery by the USPS. That was subsidized by US agreement rather than foreign labor. If the delivery was a realistic $5 for the 50cent paper cups you ordered, it wouldn't be competitive to import them (directly through Amazon/eBay).

The advantage China has had is really factories and supply chains due to investment. Building those factories in the US is totally possible at marginal increases in price, but simultaneously marginal decreases on profit. Having a foreign government borrow/loan all the money to build the infrastructure for your factories simply for the cost of transferring your IP to them seemed like an obvious quarterly profit improvement!

oldandtired• 4 years ago

After reading various comments by all sorts here, it is obvious that many do not know history nor do they understand the consequences of decisions made in the past that are now coming home to roost. Those decisions being approved by whatever political group was dominate at the time.

What we see today is no different that what was seen 2 millenia ago and many times since.

The problem is a "whole of society" problem and while we are tearing ourselves to shreds over "political" and "social" and "religious" differences, we all contribute to the implosion of society in general.

This is the lesson from history and as long as we do not learn, we repeat again and again those same mistakes.

addicted2• 4 years ago

Thanks Biden.

On a more serious note, hopefully this will lead to business leaders advocating for better government support in terms of child care and healthcare. The former because it will make more women available to the workforce (because unfortunately women are still the ones who have to run the home in the US) and the latter to shift the cost of health from employers to the govt and the people.

camdenlock• 4 years ago

unfortunately women are still the ones who have to rub the home in the US

They don’t HAVE to. They might do so by choice. And it may be a perfectly reasonable and fulfilling choice.

badpun2• 4 years ago

Here: a thread about moving manufacturing to US quickly becomes another boring thread where people bitch about US real estate market.

yrgulation• 4 years ago

I am not american but this is good news for everyone. A stable america means stable politics meaning a stable west. Also it will likely lead to more innovation in robotics. Keep pushing.

LatteLazy3• 4 years ago

I don't think that's necessarily true. America is much more stable than most nations and much more de-stabalising to the rest of the world...

MrMan• 4 years ago

we need to try to get more immigrants to move here

siruncledrew• 4 years ago

“Made in America” comes up a lot, then when it comes time to needing Americans for the work, these factories either downsize, close, or just move to some faraway country again.

It’s like the thing that gets people excited only to deflate again and sizzle out hope.

Then all that’s left is another pile of rust and a trail of tax credits…

Made in America is back, leaving US factories scrambling to find workers

Related Stories