The US is the global leader in technology, space, information, biotech, and innovation in general. That’s more than good enough. 
Factories Aren’t the Future
The Wall Street Journal article Factories Aren’t the Future inspired my lead chart.
Politicians of all stripes promise to restore manufacturing to its historic role as a source of good jobs for Americans. They blame trading partners like China, Germany and Mexico for unfairly stealing those jobs. They blame corporations for outsourcing those jobs. They blame unions for hampering manufacturing companies’ growth. Democrats blame Republicans. Republicans blame Democrats. Voters pine for a golden age in our immediate rearview mirror when most Americans had high-paying, stable manufacturing jobs.
The facts tell a different story. According to the Bureau of Labor Statistics, manufacturing’s share of nonfarm employment declined from roughly 32% in 1947 to approximately 8% at the end of 2023. Yes, there was a slight increase in the rate of decline around 2001, when China entered the World Trade Organization. But you have to stare pretty hard to see the effect. In any event, that effect is trivial compared to the long, slow, inexorable decline in the importance of manufacturing as a source of U.S. jobs.
Has the decline in manufacturing been the catastrophe portrayed by various politicians? Hardly. Inflation-adjusted gross domestic product per capita increased from around $15,000 in 1947 to about $66,000 in 2023. Real per capita disposable income rose by a similar rate. So it isn’t true that our prosperity depends on having most people work in the manufacturing sector—quite the opposite. Technology has dramatically raised labor productivity in manufacturing. Automakers here and abroad need far fewer employees now than they did in 2000 to make better cars than they used to. That’s a powerful force reducing employment in the auto sector—and the same is true in many other industries.
The wrong answer is to pine for a mythical golden age that never existed. Pittsburgh is now a thriving center of education, research and health services. It didn’t get there by trying to bring back the 1950s.
Chart Notes
- Manufacturing employment peaked at 19.460 million in the third quarter of 1979.
- Manufacturing employment is now 12.955 million, down 33.4 percent.
- Real GDP was $7.03 trillion in the third quarter of 1979.
- Real GDP is now $22.2 trillion, up 215.8 percent.
Why the Economic Effects of Taxes (Including Tariffs) Matter
The Tax Foundation comments Why the Economic Effects of Taxes (Including Tariffs) Matter
Tariffs have a net negative impact. Yes, they divert business toward protected domestic producers, but they generate losses for consumers and unprotected businesses of a greater magnitude. For instance, recent tariffs on steel and aluminum led to annual production increases worth $2.8 billion for protected firms but led to a larger $3.4 billion annual average in production losses for downstream industries. Elsewhere, estimates have shown that while tariffs can save jobs in protected industries, they do so at very high costs (e.g., about $650,000 per steel job saved). That is crucial information for policymakers to have when deciding whether to impose tariffs.
When it comes to tariffs, for example, nearly all the new tariff revenue raised under the Trump administration was used to bail out farmers and ag producers harmed by retaliatory tariffs. We’ve also modeled the estimated effects of Trump’s new tariff and tax proposals and compared the trade-offs of each tax policy change for economic output.
Trump Tariff Synopsis
- Trump put tariffs on China.
- US consumers and importers paid the price.
- China retaliated. US farmers were hurt by China’s response. So
- Trump gave all the money raised by the tariffs to the farmers.
- And we paid $650,000 per steel job saved.
It worked so well that Trump is going to put 60 percent tariffs on China. All trade with China will stop and the result will be massive inflation.
I what way does any of that make any sense?
Related Posts
September 26: Trump Claims Tariffs Will Reduce the Trade Deficit. Let’s Fact Check.
Trump proposes 60 percent tariffs on China. Would that reduce the trade deficit? Where? How?
October 1: Trump vs Frederic Bastiat: Who Is Right About Tariffs?
Previously, I discussed tariffs and the trade deficit. This post is about Trump’s proposal to use tariffs to fund projects.
October 5: Buy American Provisions Cost $125,000 Per Job Created
“Buy America” sounds great. But it’s costly and about to rise steeply.
I propose a new slogan: “You can get better, but you can’t pay more!”
I find this the perennial blindspot for free trade. As country, you need to main the capacity to make most of the critical things for a modern society. That roughly correspond to food, energy, basic medicines, transportation, concrete, steel, and silicon. You don’t have to make it all– you just need to maintain a competitive capacity for national security, economic development, and environmental protection.
Manufacturing is critical for the long the term safety and prosperity of a nation. Without some amount of advanced US-based manufacturing you create a permanent security risk and dependency on trade partners. This can be fine with say Australia, UK, Germany, etc. Taking an existential risk on China seems foolhardy.
The other piece is that manufacturing benefits a lot from network effects. An increased density of suppliers and know how drives efficiency improvements and creates a skilled pool of tradespeople companies can draw from. In the US, we are losing critical skills and knowledge as boomers retire that will have to be rediscovered the hard way if we ever decide to restart manufacturing.
Finally, environmental arbitrage always seems to come back to bite us. Ship all of our garbage and plastic to Asia and Indonesia, they just dump it back into the ocean and we end up having to clean up the pacific garbage patch and we end up with a shit ton of microplastic in the ocean food chain. Externalizing environmental damage sort of works for some highly localized things like mining, but when countries doing the manufacturing are using banned refrigerants, burning coal and oil, overfishing, and relentlessly jump dumping waste in the environment it ends up hurting everyone even if the Cuyahoga river is no longer on fire.
e/acc is the way.
“Has the decline in manufacturing been the catastrophe portrayed by various politicians? Hardly.”
Nonsense. It has been much worse.
In a free market, you can only sell two things: Goods and services. Service productivity hardly grows at all; except of as a result of technology/goods improvement: An economy consisting solely of Uber drivers, doctors and cleaning staff, hardly “grows” at all, by any other means than employing more and better goods/equipment: Better and more cars; as well as better and more machinery enabling better and more roads. Better surgical equipment, allowing for less intrusive surgery. Vacuum cleaners/robovacs, better detergents etc.
Service providers’ productivity increases, hence their contribution to economic “growth”, are wholly tied to improvements in goods available to them. Goods which needs to be manufactured. The same holds true for economic-utility-improving final/end-user/consumer goods. There will never be a Moore’s law like year over year improvement in the amount of massage hours available. At least until massage can also be rendered equally well by; tah-dah; manufactured masseurs.
Virtually all wealth increases have come about by way of improvements in manufactured goods. Hence manufacturing.
Now, them being harebrains by definition; I wouldn’t put it passed morons dumb enough to believe “GDP” has any more meaning than “MAD”,to also completely muddle things up when it comes to what tasks/jobs they entirely arbitrarily classify as “manufacturing” vs “services.” In which case arbitrary-in-arbitrary-out does provide room for even “conclusions” as economically illiterate as “we can all live off services, who needs manufacturing…”.
But economically, it is the specific abstraction of building/manufacturing something to perform a task/service/job, versus a human having to do it by hand, which IS the root, and 90+% of the branches, of all economic growth.
The value of manufacturing is potential mass employment at decent wages. A significant portion of the population isn’t bright enough to work in technology, finance and other brain-based fields. Manufacturing gives opportunities for the not so bright to form unions and make a decent living for their families. Yes it costs more for the rest of us. But it really comes down to what kind of society you want to live in. Do you want a bunch of men finding it difficult to make a decent living? Do you want to create more Trump voters?
When you buy stuff made in America the money goes to factories and workers who pay State and Local taxes which pay for roads and schools in America.
When you buy stuff made in China the tax dollars don’t pay for America’s roads or schools.
excellent point. The initial response(usually from groups bought paid for by the companies offshoring everything) is the american consumer benefits in lower prices.
And what happens when he/she doesn’t have a job??
“It worked so well that Trump is going to put 60 percent tariffs on China. All trade with China will stop and the result will be massive inflation.
I what way does any of that make any sense?”
China is a threat to U.S. hegemony.
Why was the Covid public health response what it was? Ulterior agenda. Counter measure is a military term, not a medical term.
But we also cannot afford to allow the massive enrichment of authoritarian regimes like China, on the basis of national security, world security, and human rights. The economic implications cannot be considered without the political and security implications.
This is not one of Mish better articles. Manufacturing has declined and technology increased more due to the accumulation of debt, coupled with a rise in regulation for manufacturing, not so much for technology. Also the united States is not a world leader in most of those areas he mentioned. Companies might have head offices in the States yet both the research, and manufacturing, is being performed in other countries.
Mish makes some decent points in the article (basically summarizing ye Olde Conventional Econ 101 wisdom) but he does seem to have blindspots when it comes to the decades-persistent downsides of sorta/kinda/maybe free trade (for one, it ain’t free trade if Chinese macro policies kept trillions in USD import payments from freely recycling back to the US in the form of US export purchases).
50+ years of perpetual trade/fiscal deficits do not reflect healthy/sustainable equilibria under *any* economic model.
They are a recipe for national ruin but ideology driven blindness to empirical results (those de-industrialized workers didn’t become higher paid brain surgeons…they became lower paid barristas (or long term unemployed) leads intelligent Men into occasional folly.
And macro stats artificially goosed by money printing (*desperate* money printing) aren’t a sign of economic health either.
Now look who is anti-free market. The question is, in a truly free market, would manufacturing naturally rematerialize in the US? I believe it would.
“Inflation-adjusted gross domestic product per capita increased from around $15,000 in 1947 to about $66,000 in 2023.”
When i came to Los Angeles in the mid 1970’s there were some skyscrapers downtown. Now it is a forest. Heard the other day that the population is 4 million.
Obviously, with advances in technology, productivity has increased, as well.
We can bring back manufacturing jobs in the same manner that we brought back farming jobs.
I will make this short: my father, dead now, was a HVAC TECH and highly skilled. His oldest son, my Older Bro, followed him. They were BOTH UNION men and Dad, in a 850 sq ft SEARS KIT HOME, was able to: “PAY HIS BILLS” and take 2-week Vacations in one of his Buicks (Electra 225’s) and we even went to Disneyland from my home town in Rural Illinois. He retired with a good, but not great pension and today he would be destitute. My older Brother, the other union Man, is doing great with an $80K pension, and SAVINGS because he was debt free by 40 and all of his kids were OUT by that time. He still lives in his small home in Rural Illinois and they own a Double Wide in AZ for winters. They drive two brand new cars. BUT, he says that with all of that, they are burning through cash helping a Divorcing Daughter (with a young kid) and keeping up on UP-KEEP of the two homes, both requiring new Appliances, repairs, etc.
Union jobs USED to cover expenses, but I am seeing that only PLUMBERS, HVAC, and SKILLED ELECTRICIANS making it due to high demand. One of my best friends fired ALL of his employees here in Portland area, and is a one-man show and EVERY DAY, fives days a week, HE NETS $1,000 per day doing MINOR PLUMBING REPAIRS and does NO new build plumbing jobs.
He and his wife OWN their Spread, a Winery, BIG SHOP for his one Truck and RV and other stuff and they have a huge pool and all the fixin’s.
He hunts and fishes for all of their meat and are super healthy people.
Plumbing PAYS!
Plumbing is a job for those in their 20s, 30s, 40s and 50s for most in that trade. After 55 for many the grind of getting of up and down from under a sink or under the house, etc., Monday – Friday, 10 – 12 hours a day is too laborious.
I have never had a plumber 60 or older service the the residency…
In order to offer up a compliant view on Pittsburg, take a look at this Youtube Video from Peter Sentenello: https://www.youtube.com/watch?v=lbppyXDOnRY&t=1088s
They have transformed the City with Big Steel being gone. GIVING BIG STEEL to foreigners, no matter what we WANT to save, did hurt Pittsburg and they rebounded.
We have Kids of Friends, and he is Black kid made good, just returned with his hard-saved money and they bought their eventual home (as a rental for now). Their Parents are gonna buy a RE-BUILT home, all the goodies, for less than $250,000.
Mish you should not read Rupert Murdoch’s WSJ liberal propaganda rag. The Tax Foundation is staffed by former government, and academic parasites dependent upon government for their welfare checks. You cannot learn what benefits the working taxpayers who create wealth by reading the opinion of people who have no experience in productive endeavor.
Someone needs to look into why the month before an important election, a record monthly number of government jobs were created.
Mish, I don’t see anybody pushing for re-shoring production of shoes, clothing, or cookware. However, as the Covid shortages taught us, being able to create certain essential things — medicine, medical equipment — is preferred over leaving supply to the vagaries of the CCP. Even certain consumer products — portable generators, for example, as we’ve learned after Hurricane Helene — are lifelines for thousands of Americans. We don’t have to pursue autarky, but relying on foreign manufacturing for certain things isn’t wise.
Bingo
We’re still going to be using Stuff. And Stuff doesn’t make itself.
Make the Stuff here and jobs will be available for Americans. We have a big country with many different job sectors and we need them all.
Otherwise you end up with millions of young ppl who can’t find worrk and live in a tent in California because it’s warmer there than the Midwest that used to have factories and a local economy.
Yes, and we have the material resources to get it back up again. We need to bring jobs HOME. We need UN-SKILLED LABOR JOBS because, unfortunately so true: MANY kids are uneducated and unskilled. OR, they get degrees in Literature and DEI.
All unskilled labor type jobs will be taken by migrants, both legal, and illegal for the foreseeable future.
Current admin has kept the ‘trump tariffs’ and recently narrowed the composition of vehicles that come into. The ‘pour and melt’ pokicy that targets just a few countries. So you have only focused on Trump and not the big future
Larry
The article argues that the U.S. should not strive to restore manufacturing jobs as a key source of employment. Despite political rhetoric, manufacturing’s share of U.S. employment has steadily declined, and this shift has not harmed economic prosperity. Technology and productivity improvements have reduced the need for large workforces in sectors like automotive. The article emphasizes that pursuing innovation in areas like technology and biotech is the future. Attempting to return to a mythical golden age of manufacturing jobs would be a step backward
No mish.
While it is true automation is more or less than half responsible for the loss of manufacturing, it is the case that there are most people who are not suited to mind jobs.
Using aggregate average statistics does not at all tell the story of the destruction of the middle class and the loss of household formation. Not enough room to go into anything here in a comment but the tenor of this article is completely wrong
We will need to simply stop trading with Asia altogether. Whether we need to repeal NAFTA is another question
China has completely taken advantage of the situation. Even people such as Michael Pettis agree that free trade as it currently exists is warped and destructive. China has prevented the rise of its currency that should have accompanied its trade colossus status and it has thus robbed its consumer base as a result to benefit the state and some private sector business interests.
The world and the US have been destroyed as a result, notwithstanding the supposed rise in wealth, which has accrued to the top earners and left the majority behind
Prior to the WTO there was GATT. For the uninitiated GATT’s purpose was to expand trade after the conclusion of WW II by reducing tariff barriers while also allowing nation states to manage their national interests. World bodies decided under GATT if a nation state was in violation. The main purpose was to rebuild W. Europe and secondly Japan in a bipolar world. It worked. By the 70s it should’ve ended because US trade deficits were hemorrhaging our balance trade so much that Nixon opted to abandon the gold standard or the US would be forced to declare bankruptcy.
The WTO was drawn up to bring China into trade tent along with E Europe. The intent was to turn socialists into capitalists. It was argued that once China and E. Europe got a taste of the good life they would not only embrace capitalism but eventually an expanding middle class would flip these communists into Jeffersonian democrats. Never mind that capitalism if managed by autocratic leadership become fascistic cartel nation states or monetarist unions.
Mish through the Wall Street article argues that the WTO didn’t impact that much the decrease of manufacturing employment in the US by 2001. I agree. It was a slow bleed in the 70s – 90s then a hemorrhaging after 2001. It was regional and world trade agreements that precipitated the almost total gutting of the working middle class. Yes, it took almost a decade to impact the US through the WTO, NAFTA, CAFTA, etc., then the coup de grace the GFC.
Technology has, however, created more loss of manufacturing jobs than trade agreements. The trade unions and politicians are to blame for this by not striking for a reduced workweek and increasing wages due to productivity gains for the former and the Congress and Executive branches for non union, non exempt employees.
What I have always thought if Western capitalists were so inclined to decrease trade barriers, why weren’t services part of bilateral, regional and world trade agreements in the 80s, 90s through today? The financial, insurance and real estate rentiers (FIRE), of the Eurodollar system don’t want regulation or world bodies deciding cases that could go against their interests is the reason.
So, it isn’t so much free trade they are interested in as much as gutting labor in Western countries and the industrial base in the West for the purpose of turning the West into burger factories, retail cashiers, Uber driving serfs beholden to the FIRE sectors.
No Western politician except socialists or classical economists (Austrians prefer austerity and neo Keynesian’s prefer MMT or more financialization), will discuss the above paragraphs. A third group that accepts or is at least open to why the many workers are in a reactive state of anomie are those capable of critical thought and analysis.
In short the rentier bloodsuckers that are in the main smarter than the narcissistic kleptocratic politicians have done to western civilization what the monarchists in the feudal era and the oligarchs in the Greco- Roman epoch also accomplished, namely a ruling, economic and cultural elites that rinse and repeat the maxim divide and conquer.
Shortly after the peak of manufacturing employment, there were two major recessions which were on top of a ton of environmental regulation enacted in the 70s and 80s. That’s why manufacturing employment started dropping after 1979.
Any chart using a GDP measurement that doesn’t subtract out the government spending of borrowed money is useless for determining true economic growth and the contributions of labor.
USA has the largest home grown third world population of all the industrial economies. Democrats imported millions more. Third world labor cannot do as Pittsburgh and thrive as a center of education, research and health services. Consequently US cities have crime as high as the barrios of Caracas, Venezuela. Millions of parasites live on welfare and contribute nothing to society. The plague of crime and poverty can be cured by providing manufacturing work that these people can perform and so contribute to wealth creation. The American canoe travels faster when every person puts an oar in the water.
The Civilian Conservation Corp didn’t build the roads and buildings in our national parks during the great depression because national parks were the future.
Domestic manufacturing is for stability and security. Employ people in fentanyl country in the hopes that it will lower the death count.
I have to disagree. We indeed will not and probably should not strive for the golden age. However, manufacturing is critical in many ways. You’re envisioning higher-tech industries, including higher-tech manufacturing, that require new skills and innovation. No one is making a space vehicle out of steel, and further, high-tech batteries will be made from new elements or combinations that have yet to be discovered. Making widgets is over, and creating products that require high degrees of skill and innovation is imperative for America’s future.
Making products, especially those critical to security and safety, must be made in the US, not anywhere else. Productivity must be balanced, including jobs that create tangible products.
Are you suggesting that we remain captured because the chip, oil, or drug business is farmed out to places with minimal interest in America’s future?
Don’t worry, Phil, Mish isn’t going to reply to your question. He’s a purist. As this article and many other suggest, he doesn’t believe in tariffs or sanctions at all, as in ZERO.
So, now that we have that idiotic position out of the way, we arrive at the point you’re trying to make. I agree with your assessment. The key is what goods are STRATEGIC?
Pharma comes to mind very fast. Most anything related to green energy also is a good fit. Electronics to a certain degree beyond just chips. There are all sorts of strategic goods we should be producing here in the US, and rare earth metals should be in the fast lane to reducing dependence on China.
It won’t be easy, and neither of use suggest America has to make everything.
I agree with you point about productivity. Everyone who’s paying attention realizes that AI & robotics will change the course of humanity. It’s inevitable, but what’s not is assuming mankind has to become a slave to them.
Yes, and it is a little more complicated, too. Many parts need to be made before an item is manufactured. So, there are far more variables than just strategic items.
Historically, all developed economies have built up their capital and competitiveness behind tariff walls, initially. That was what the Civil War was all about: tariffs to nurture the budding industry in the North.
SpaceX’s rockets are made from steel and the new Starship is also made out of steel. How they settled on steel and not higher tech solutions is an interesting read and an example of how a truly innovative company solves a problem.
Mish; I disagree , we must make things here in USA. During the plandemic our reliance on CCP China for medical supplies was awful for our citizens. USA must make everything it can. In respect to Tariffs , our Government was funded on Tariffs before 1913 Federal Reserve Act. This kept import/export prices competitive with USA made products. Globalism is destroying America with un-loyal corporate interest partnerships with the elite politicians. Our currency is being destroyed by uncontrolled debt /spending we must return to a United States Currency Note backed by gold & silver. End the Fed a banking cartel that taxpayers are on the hook for “Their” dishonesty.
The only things we need to make her are things of national importance.
That does not include washing machines and all the crap routinely stocked at Walmart.
Are skid steer and compact track loaders of national importance?
John Deere wants to move production of them to Mexico. If not, then what level of construction and or agricultural equipment reach the level of national importance.
It’s pretty obvious that your opinions on this matter are very unpopular.
Just saying.
No, they aren’t nor is Mexico China
Engineers in the design and prototype development and final production stage before the distribution and retail phases must be on the production floor for feedback from quality assurance, line management, mechanics and production workers due to the gap between the idea and practical application processes. This can’t be done from the design headquarters in Chicago and the factory is in Ho Chi Minh City even in a CAD, Zoom world.
Moreover, the design of the factory floor, logistical support, electrical, AC, conveyor, tooling, chemicals, dye, paint, etc., are done by a separate engineering team as well as the hardware, firmware and software are implemented by the IT engineers.
All of these engineer teams require numerous trial runs and soft openings before production starts.
The JIT and transportation of heavy manufacturing products from Asia, Europe to North America is too expensive and a logistical nightmare in a multipolar world.
FYI: Washing machine factories in the US after Pearl Harbor were converted into war production.
https://evolutionhomeappliances.weebly.com/washing-machines-mid-20th-century-automatic.html
As they are now in Russia given that the chips in the washing machines are well suited, readily available and cheap. They serve a purpose quite nicely in drones and missiles.
Most washing machines sold in the US are actually made in the US.
Make washing machines here and keep the wages and taxes here.
Workers in Indiana buy breakfast and lunch in Indiana thus creating more jobs, wages, and taxes.
Those wages contribute to a local economy and the taxes build roads, pay for schools.
Better our young ppl have a path to homeownership in Iowa, Michigan, Pennsylvania, etc than living in a tent in San Francisco.
A.I. factories with supervising personnel with College degrees will be the only ones working there. For the average person you will received an universal income with Socialism with authoritarian government as your provider.
If the IQ over 115 crowd are the only ones capable of the level of abstract thinking needed to run the AI and robots, then you may well be right.
I am dating myself but didn’t George Jetson of the futuristic cartoon “The Jetsons” work in an automated factory setting from a desk in an office by pushing a button to finish the packaging process of an assembly plant of a private employer.
There was no discussion of universal income, authoritarian government, etc. In fact, George was the sole provider, his wife was a stay at home mom, he had two kids, commuted to work in a flying car, no congestion due to smart freeways, people movers, had a upper middle class lifestyle with a robot for a maid.
The Jetsons were created in the early 60s before crony capitalism ruined the American Dream, endless wars impoverished society, and bean counters took over the decision making process in almost all facets of society except government spending.
Manufacturing is vital to the interests of the USA. Employment is another story. I was in management for 40 years for a manufacturing (machining) company. As like most businesses, we attempt to improve productivity by using less resources (labor). Machines that used to be cranked by hand a hundred years ago were fitted with cams for automation to allow an employee to run multiple machines. Those machines have been surpassed by modern CNC controlled machines. Robotics have taken the place of machine operators for the loading/unloading of parts. Automated inspection processes during the machining cycle have reduced the need for quality control personnel. It has been an evolving process for decades, even centuries.
Farming is a great example of productivity and efficiencies obtained by using modern equipment and processes.
Agree 100% that manufacturing is vital to national interest.
Add that some types of manufacturing are far more vital than others. And some things we produce aren’t considered “strategically vital manufacturing”, but they should be.
Vital to national security are food production, energy production, communications and defense industries (including associated materials and transportation industries).
But as RFK pointed out over 50 years ago, the nation’s single most valuable product is actually well-educated children of good character who will sustain the nation’s well-being.
yikes.
That means we’ve lost our most valuable product in addition to manufacturing
I’m not so dismal. I think the kids generally figure things out on their own in due time. Kids have been seeing through BS taught in schools since forever.
Amen. It’s a shock when as a kid you first see that your teacher is wrong.
Still crap loads of companies that dont use any tech you mention. Maybe they will eventually but several dont and have no immediate plans.
One article said – US navy to build a ship at the cost of 1.6 billion dollars.
The same ship can be built in South Korea at 600 million.
So US is far far behind competitors and many years to catch up at huge price.
Is it better to do what is best?
China reportedly has x230 greater shipbuilding production than the US….no way we go toe-to-toe successfully with an industrial juggernaut like that.
South Korea and Japan saw their shipyards as strategic assets and gave them subventions up the wazoo while we didn’t. You have a hard time competing in an environment like that.
Is coding manufacturing?
If you are coding a CNC lathe, yes.
It won’t be soon as quickly as AI is going to take that over.
Yes. Even building a web page is manufacturing.
O,but what do we do with the people on the left side of the IQ bell curve? They need to be occupied with tasks that they are capable of doing or risk their fomenting trouble. They can’t be trained as web developers or similar.
Being a rabid SF fan, I’m all for pre-qualification before anyone can be allowed to reproduce but until AI takes over, that isn’t practical in today’s world.
So what to do we do with the IQ challenged?
We just pretend everybody’s equal. I’m sure that’ll work.
That is what we are doing now, is it not? And especially with our immigration policy. Why import far left of bell curve peasants when the combination of robotics, automation, AGI and specialized AI is on the cusp of eradicating any chance they have to contribute value to the shared pie. It just means a smaller piece of pie for those of us already here.
So I can build a house from ground up but computers arent my thing and that makes me stupid? Good luck if you’re faced with a disaster like Helene as I certainly won’t be helping you. You will be living in a grass hut. I’ll take real world skills over your digital zero fantasy binary land any day thank you.
I think he’s speaking of people in the Financial, Insurance, and Real Estate sector (FIRE) people who can’t find their ass with both hands and rely on others to do everything for them. Those people will be eliminated first by AI and automation. Artisans and people with real skills will always be in demand.
We’ll need plenty of care givers for older people as the population continues to age.
We also need call center people (can work from home doing this too), people in restaurants/bars, people stocking shelves in Walmart etc.
There are lots of jobs for people on the left side of the IQ bell curve.
Those jobs are all going to be replaced by automation/robots, especially call center jobs, which are easily replaced by AI. Call centers just follow scripts (if. then. else…). Senior care requires people capable of being trained in medical care.
Here’s an example of a regular newscast where the people, their voicing and their mannerisms are all AI generated!
I keep seeing many posts here about “High IQs” but that doesn’t mean anything.
Here is a chart of IQ by U.S. state.
https://www.visualcapitalist.com/mapped-average-iq-score-by-state/
The northern Midwest states seem to have higher IQs than average and yet they have crap GDP and the smallest population.
The states with the highest GDP: California, Texas, Illinois, New York all have “average” IQs and that makes perfect sense because you need a balance of hard workers (immigrants) and smart workers for the economy to grow.
So why do you people keep talking about IQs?
Anyone might notice that two phrases describe the exact same thing:
Good manufacturing jobs.Sweat shop labor.Take your pick.
Those are not the exact same thing.
The quality of the job depends a lot on the value added per hour of labor.
Any Ford worker of the early 1900s who had relatives working in the garment industry could tell you exactly how different are “good manufacturing jobs” compared to “sweat shop labor”.
Today, any modern robotic-manufacturing plant tech worker with a spouse whose distant relatives are still hand-stitching clothes or making shoes in, say, Vietnam, Bangladesh or Honduras could also tell you.
To bring it even closer to home, any U.S. oil-patch or pharma production worker with a spouse working in food processing could also tell you.
Well, “manufacturing jobs” covers a lot of ground. So, I agree, it’s certainly possible to differentiate between a low-paid, hard-on-the-body job and a cushy, high-paid job.
But notice, for instance, how often people put on the rose colored glasses when talking of those “good manufacturing jobs” in the USA 50’s.
I’m a mfg supervisor and our operators work hard with tons of manual lifting. There is no practical, cost effective way as of now to automate any more than we have.
Rjohnson I’m curious to know more about the kind of work you know is currently unautomatable. Physical robots (call ’em) are currently really expensive and their control systems are still primitive and hard to engineer compared to how they will be in a decade or two. So, interesting times ahead.
Peter Drucker observed and predicted the course of manufacturing employment over the last few decades. Specifically, he noted that it would follow the same curve that farm employment had followed.
Drucker had a reputation for accurate predictions. Read his stuff to get a feel for how he did it.
Surf Mish. Make the United States a complete hostage to our enemies. From consumer goods, chemicals, pharmaceuticals, transportation and the entire defense industrial base. This is one of your most nitwit elitist hot-takes ever.
I’m not real kean on relying on other countries either.
Keen yes i know
Manufacturing employment peaked at 19.460 million in the third quarter of 1979.Manufacturing employment is now 12.955 million, down 33.4 percent.Real GDP was $7.03 trillion in the third quarter of 1979.Real GDP is now $22.2 trillion, up 215.8 percent.You can’t meaningfully compare the 2 numbers. That’s because population has changed. The US population was 225 million in 1979 and is 345 million in 2024.
So when you say manufacturing employment is down 33.4% it’s WAY understating things. In 1979 manufacturing was 19/225 or 8.4% of the entire population (not just working). Today its 12/345 = 3.5% entire population. So its down 59% (3.5/8.4).
As for GDP, it may be up 215% but population is also up 50% (225*.15=337) so half that GDP gain is simply because we have more people building and consuming things. So it’s more like up 105% rather than 215%.
All that said, I agree with the gist of the article. Manufacturing is 19th and early 20th century jobs. It’s not 21st century jobs and even if it was, how many people really want to work long hours in sweaty factories doing manual labor? My guess is China transitions away from manufacturing jobs in the next 20 or so years as they get outsourced to India and Africa where the next wave of cheap labor / lax environmental regulations can be found.
Wow, someone else finally starting to use data to make valid points. Well done.
The only two bits you left out of your analysis was the age demographic for the 1979 group vs 2024 group.
In 1979 the median age was 30 and there were very few retired people.
In 2024 the median age is now 40 and we have 76m people “retired” on social security and medicare.
It is impossible to bring back all manufacturing because we simply don’t have the population to do it.
https://njbia.org/study-warns-of-silver-tsunami-and-coming-labor-shortages/
“Now, the average retirement age has dropped to 61”
I’m going to do my part in dragging that average down because I’m retiring at 59 next year.
And that’s exactly the issue…..who is going to replace you when you retire?
I didn’t even cover the people that can’t work because of illness and/or disability because of morbid obesity, drug use, or all the other health issues people have, that’s a whole other group that is leaving the labor force but not yet old enough to retire.
Like a dam before it breaks, it all starts with a trickle then it all happens at once. We’ve been trickling since 2008 and the damn is about to go bust.
Sweat shops? That’s hilarious. I don’t think anyone is suggestion the US return to making goods via sweat shops. With that said, there are all sorts of strategic / nationally important (as Mish states it) goods that America should be making, but we’re not.
Might want to let these guys know because sweat shops are still alive
https://www.foxweather.com/weather-news/impact-plastics-erwin-tennessee-deaths-investigation
My hypothesis is that manufacturing jobs correlate with reduced Gini — but, dang, not true in my 5 min of research
Gini plot from FRED for ref:
https://fred.stlouisfed.org/series/SIPOVGINIUSA
Of note, from 1980-1992 .. “the Reagan years”, Gini shot up from 35 to 40, a 14% increase. Without facts, I’ll attribute to fewer deductions/shelters due to lower taxes.
Gini plot from WB (incl after-tax) …without link to avoid “approval” (just add https://)
ourworldindata.org/income-inequality-before-and-after-taxes
Of course, as Bernie, and the joyful Kamala, desire … we need 99% of population in equal poverty … then Gini can approach the “equity” ideal of zero while leaving the top 1% in their mansions, jets, and multiple homes.
Tarrifs are to be used sparringly. However, tarrif/rebate policy debiting the full amount in increased cost back to the importer would negate the negative effects of tarrifs. Money is most basically accounting. When you realize that you see so many possibilitiers to resolve economic problems without additional costs.
You can’t run with paltry savings rates and enormous trade deficits forever. You can’t eliminate trade deficits with services. Most of our so-called services exports are actually the operations of US corporations overseas that employee foreigners, not Americans. At some point the worm will turn and the US will be England writ large. In the age of robots, countries without manufacturing will be impoverished.
It doesn’t make any sense though to be completely dependent on foreign sources for manufactured goods; particularly anything defense related.
Great powers typically become great through manufacturing. And being overly dependent on others is a recipe for disaster.
Whether it is oil, ammo, rare earth metals, microchips, tanks, steel, etc. For example, the US is doing everything possible to deter China from seizing Taiwan because those manufactured microchips run about 70% of all the high end machines on planet earth.
Only about 105 nautical miles of ocean is preventing the US from being absolutely crippled economically and technologically because we still have unfettered access to those microchips. That all ends immediately when the PLA takes Taiwan by force…..
It’ll be a peaceful takeover just like HK; PRC won’t kill the golden goose.
The, will we boycott TSMC? hahaha…corporate profits and our smart phones come first.
Should TSMC, as a Trillion $$ market cap company geographically diversity? Not even accounting for earthquakes? duh? (answer: they are and taking many $B of USG govt funding).
Times change and so do strategic considerations and consequences. You might want to consider how many golden geese were slaughtered when WW! or WW2 broke out.