
US manufacturing still tops China’s by nearly 46 percent   - cwan
http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2011/02/06/made_in_the_usa/
======
3pt14159
While it is true that North America still manufactures great quantities of
luxury and high tech stuff, that isn't what is pissing off the populists. They
couldn't care less if our manufacturing doubled in terms of dollars of output.
What they really want is a return to the highly paid, unionized, tradesperson.

To them robots making Chevy trucks matters just as much to their lives as
nerds writing software. As productivity increases continue, demand for
noncerebral labor declines as a ratio for demand of cerebral labor. Even if
the average tradesperson is better of today than 40 years ago (they have cars
with AC, for example) they want their _relative_ standing to increase. They
used to be paid, say, half of what the engineer made, now its a fifth. That
really, really pisses them off, so they take it out on China.

Combine that with the fact that 40 years ago "mom" stayed home, converting
(tax free) raw ingredients into delicious food, as well as watched the
children and mended the clothes. Now they buy less healthy instant food and
need to find a way to pay for daycare, as well as a second car to get to work,
and if they are American, substantially inflated healthcare costs.

I'm not envious of their position.

~~~
Charuru
Maybe this sounds slightly kooky, but...

I believe there is no 'solution' to their plight. The timeline until
singularity is too short for a complete retooling of the economy. However the
pace of development at the higher end is fast enough and explosive enough that
we can afford to keep on subsidizing the lower classes with bread and circuses
until we reach sentient AI, at which point we will be able to provide everyone
with robot servants and who knows what else.

Just think about the current web 2.0 economy. If a nineteen year old is able
to write a piece of software and execute on a plan that makes him a
billionaire in a few years, that's... really quite amazing. Yes yes I know,
some people are going to call bubble. Whether or not it's true, I think it's
evident that the pace of innovation has sped up more than most people realize.
Things like this will continue happening and happen quickly. We're at the
beginning of a fantastic time when the pace of wealth creation will increase
exponentially, with the internet as the great enabler.

~~~
arethuza
That really does sound awfully like the kind of hyperbole more associated with
the nuttier Christian sects rather than technologists.

As Ken MacLeod put it "the Rapture for nerds".

~~~
nickpinkston
Haha - if you're going to have a "faith" - having it in humanity's ingenuity
to make amazing things is still a good bet.

------
jseliger
A lot of people don't understand this. I'm an English grad student, and one of
my more, uh, politically-minded professors said in a seminar that the U.S.
doesn't manufacture anything anymore. I sent him this e-mail:

When I mentioned the bit about the U.S. continuing to manufacture a lot of
stuff, I wasn't just trying to be a pain, as it's actually true; see Dept. of
Labor Data on the subject here:
<http://research.stlouisfed.org/fred2/data/MANEMP.txt> or a post on the
subject here: <http://blog.american.com/?p=8593> ("Amazingly, if the U.S.
manufacturing sector were a separate country, it would be tied with Germany as
the world’s third-largest economy."). CNN even points out that "China's
manufacturing sector is on the brink of passing that of the United States,
according to a report released Monday,"
([http://money.cnn.com/2010/06/21/news/economy/china_us_manufa...](http://money.cnn.com/2010/06/21/news/economy/china_us_manufacturing/index.htm))
but that it hasn't yet.

What has happened is that the U.S. manufacturing sector represents a much
smaller part of the overall U.S. economy—mostly because the rest of the
economy has gotten so big.

When you stop believing in polemics and conventional wisdom and start trying
to look at what really is, you'll find a lot of unusual stuff.

~~~
uytrhyujkujhy
It's not necessarily good though. A multi-billion $ weapons system built in
America for the US taxpayer, even if it is never deployed or even abandoned,
counts as a $Bn manufacturing output.

As a famous economist said - from a GDP point of view the ideal person is
someone undergoing cancer treatment during an expensive divorce

~~~
gscott
And many of those components going into these products come from elsewhere. A
manufacturing company I worked with bought parts from all over the world and
had few US parts. When I tried to increase the number of parts they were using
from the US they said good luck and I failed because nothing was available and
no one wanted to make what I wanted (for example I wanted 1,000 metal tubes
bent, to make them into legs... there were plenty of places that I visited
could do it but they didn't want to so it ended up being done in Mexico).

~~~
uytrhyujkujhy
From a macro economic point of view it doesn't matter

If your stealth bomber uses $100 parts made in the USA or $10 parts from china
with the difference going in the CEOs bonus - doesn't make any difference when
the taxpayer is billed $1000

~~~
gscott
Which is part of my point, for that $1000 in value sometimes our only task is
putting the pieces together. It can't last, China wants to do that too.

~~~
uytrhyujkujhy
That was sort of my original point, much of the US high value engineering
(defense/transport/infrastructure) is for the US government. Which means that
the more the taxpayer spends on overpriced defense contracts and cost overruns
the better US industrial output looks

~~~
enjo
I keep seeing this, but never a citation. Looking at the best data I could
find:

<http://www.census.gov/manufacturing/m3/prel/pdf/table1p.pdf>

Total output: 436,031 Excluding defense: 424,680

Making defense, at least how it's defined in this report, merely 2% of the
total output. I'm not sure how much of that 2% is going to the U.S. government
as these defense contractors also produce quite a bit for other countries.

That probably doesn't cover the total of it, but I just can't find any
substantiation that the government is buying up a significant amount of the
manufacturing output. Does someone have a source to help me better understand
this?

------
joelmichael
I am skeptical of this article because I just looked up this data a month or
so ago -- opened the UN's Excel document and everything -- and found that
China had recently surpassed the US in manufacturing output.

Unfortunately I am limited to the iPhone right now, so can't re-investigate
the data myself until later. I have no interest in diminishing the American
economy nor in over-valuing the manufacturing sector, but facts are facts and
I'm legitimately confused now.

~~~
joelmichael
OK, I am back at my computer. My source is the following website, specifically
the second link listed: <http://unstats.un.org/unsd/snaama/dnllist.asp>

If you open that up, scroll down to the United States, go to the Manufacturing
row, and scroll all the way over to the right (2009) you will find $1.78T
dollars. If you search for China and do the same, you will find $2.05T. You
may also note that China, with its high rate of growth, only first surpassed
the US in 2008.

The next highest country after China and the US is Japan with $1.05T.

Edit: Interestingly, the corresponding spreadsheet for "2005 dollars" shows
the US at $1.68T and China at $1.48T in 2009. Now I'm even more confused.
Shouldn't the difference between 2005 and "current" dollars scale
proportionately?

------
bugsy
I was reading about how the US now considers McDonalds hamburgers to be part
of US manufacturing output, whereas in the past that was credited as service
since it was a restaurant.

So we must ask. Does the claim made by boston.com include hamburgers?

~~~
dtc
That's nonsense. This never happened. If you are going to make an
extraordinary claim like that, take a moment to find a source.

~~~
bugsy
Citations:

[http://www.cbsnews.com/stories/2004/02/20/politics/main60133...](http://www.cbsnews.com/stories/2004/02/20/politics/main601336.shtml)
[http://www.nytimes.com/2004/02/20/business/in-the-new-
econom...](http://www.nytimes.com/2004/02/20/business/in-the-new-economics-
fast-food-factories.html)

I await your apology.

~~~
dtc
No where in those articles does it state that making hamburgers has been
treated as manufacturing.

In fact the cbs article says "The report does not recommend that burger-
flippers be counted alongside factory workers."

There was a report that discussed definitions and how they affected things
like tax breaks. The news articles had fun speculating how it would help labor
statistics if they did start counting these as manufacturing jobs. But it was
just speculation. Wild speculation.

~~~
bugsy
"According to a White House report, new manufacturing jobs might be as close
as your nearest drive-thru." is somewhat telling, as is the message in the
report that if you agree you are a manufacturer, you get tax breaks.

It's had an effect in what has been since classified as manufacturing. Here's
a slide show regarding McDonalds' operations in India.

<http://www.scribd.com/doc/27447277/MC-DONALDS>

Procurement of raw materials: •Vegetables from Ludhiana (Punjab) •Chicken from
Mumbai (Maharashtra) •French fries from USA •Valla Mine fish from New Zealand

PROCESS The food manufacturing process at McDonalds is completely transparent
and the whole process is visible to the customers.

------
pitiburi
A commenter in the original article said it better than anyone: "We don't get
to qualify as a manufacturing giant just because the defense department gets
suckered into paying billions of dollars for a fancy piece of equipment that
is built by a small number of folks in a few isolated pockets of the country."

Then again, the numbers (that seem to be incorrect, go check the commments in
the original) are however about the money it is made from the manufacturing.
Then this is even more worrisome for USA, because that would mean that China
has been growing steadily at 9-10 per cent each year, while USA makes MORE
money from manufacturing but all it does is barely grow, and produce the
biggest debt the world has ever seen.

------
ojbyrne
"The growth of productivity — output per unit of input — is the fundamental
determinant of the growth of a country’s material standard of living."

<http://www.econlib.org/library/Enc/Productivity.html>

------
marshray
Gee I remember when it seemed the US's manufacturing output was orders of
magnitude beyond China (and Japan seemed like it was where China is today).
Good for China for bootstrapping their economy so effectively, but no one
would claim that the US trade deficit was irrelevant to the process either.

Even if you believe that China's output is now approaching parity with the US
(46 percent is nearly equal on the long term graph), is it not reasonable to
ask at what point they're going to start buying some of our stuff in return?

Or if they're not going to spend their dollars with us, the least they could
do is let their own currency valuation happen in open markets.

~~~
rdouble
_Even if you believe that China's output is now approaching parity with the US
... is it not reasonable to ask at what point they're going to start buying
some of our stuff in return?_

They have bought 20% of the US Debt...

Edit: 20% of the US debt owned by foreign countries

~~~
brc
And the Federal Reserve recently surpassed China as the largest buyer of US
Debt. China has stopped buying as much as the US government will print.

Well, there's your problem.

~~~
grav1tas
The Fed may have surpassed China as the largest buyer of debt, but it may not
be the largest holder. Where do you think all the money in the Social Security
trust fund went, eh?

Hint: It's somewhere in the blue part of the pie ;-)

[http://en.wikipedia.org/wiki/United_States_public_debt#Estim...](http://en.wikipedia.org/wiki/United_States_public_debt#Estimated_ownership)

------
D_Alex
Measuring manufacturing in $$$ might be a bit misleading. If China makes 4 $10
business shirts for every one $50 business shirt the US makes ... ?

~~~
ars
How else could you possibly compare them?

~~~
Zpirate
Purchasing power parity in local currency?

~~~
yummyfajitas
You didn't answer ars' question, you simply deferred the answer to whoever is
defining PPP.

------
beoba
"Measured in constant dollars, America’s manufacturing output today is more
than double what it was in the early 1970s."

What's a 'constant dollar'? Is that nominal or inflation-adjusted? Over that
timespan the two could mean very different things.

~~~
nostrademons
"Constant dollars" = inflation-adjusted.

~~~
joe_the_user
However that raises the larger question of whether these inflation-adjustments
are accurate.

See: <http://www.shadowstats.com/article/primers_intro>

~~~
nostrademons
You can say that about any statistic. The purpose of statistics is to abstract
away a large amount of raw data into a summary that people can understand at a
glance. Of course it's going to throw away information - some of which might
be important - in the process.

But those errors are as likely to be on the upside as on the downside. I never
would've guessed as a kid that I'd be able to take a phone with me anywhere,
with 4G of storage, and a built-in GPS, and the collected information of
humanity at my command, for a day's worth of wages for the phone and an hour
per month for the service. The cost of a college education has skyrocketed far
more quickly than inflation, but it's also never been easier to learn things
yourself through the Internet and then demonstrate to potential employers that
you've learned them. Health care is far more expensive in constant dollars
than it was a generation ago, but that's largely because for many of the most
expensive treatments today, the alternative back then was "Die".

------
gersh
Some would disagree "The US remained the world’s biggest manufacturing nation
by output last year, but is poised to relinquish this slot in 2011 to China –
thus ending a 110-year run as the number one country in factory production."
[http://www.ft.com/cms/s/0/af2219cc-7c86-11df-8b74-00144feabd...](http://www.ft.com/cms/s/0/af2219cc-7c86-11df-8b74-00144feabdc0.html#axzz1DEyzhNBC)

------
gxs
I think it's great Americans have a healthy fear of the Chinese. Keeps them
from resting on their laurels.

~~~
JonnieCache
Why can't they have a healthy respect for them instead? One nation's people
fearing another rarely leads to good things.

------
wmeredith
I forwarded this on to my father who did some excellent source fact checking.
I just had to share with HN.

 _An interesting editorial and comments. I think the Boston Globe is a legit
publication, but I was not familiar with Jeff Jacoby. Although he writes well,
I became wary at his first reference to the American Enterprise Institute, so
I did a little research.

I must admit that my suspicions were confirmed. The sole purpose of the AEI,
and similar type organizations on both sides of the political spectrum, is to
espouse and promote an ideology. The introduction (Message from the Chairman
and President) to their 2010 annual report state, “AFI is showing that
liberty, opportunity, and entrepreneurship are not only good economic
principles, but moral imperatives.” I have learned to beware whenever anyone
claims to know the Truth and talks about “moral imperatives” Such rhetoric has
been used to justify the worst atrocities and most hateful acts of terrorism
in human history.

I was also unfamiliar with Mark Perry, one of the moral authorities cited by
Jacoby. In addition to being a “visiting scholar” at the AEI, Perry is a
member of the Board of Directors of the Mackinac Center for Public Policy, an
orthodoxy right-wing “think tank” based in Michigan.

According to the Michigan Education Association, "The role of the Mackinac
Center is to change public opinion and move public policy toward the political
right. The Mackinac Center does not conduct neutral or objective scholarship.
Rather, it provides the media and government officials with publications
designed to promote and advance its conservative agenda." If any doubt remains
about Jacoby’s objectivity or the reliability of his sources, a visit to the
AEI website reveals their Board of Directors includes none other than The
Honorable Richard B. Cheney.

Based on what little I was able learn, Jacoby, a rightwing taking head who was
recruited by the Globe to add balance (or the appearance of balance) to their
otherwise liberal editorial page, would feel at home in the company of the
former VP. In fairness to Jacoby, he is neither a journalist nor a social
scientist. His writes editorials that express a point of view. His job does on
included conducting scientific research with the intent of objectively
depicting reality._

In other words, consider the source. There's nothing more that the captains of
industry would like to peddle more than American manufacturing is great. The
real story is the jobs have been sent over seas and the executive pay has been
increased at the top for efficiency.

------
brc
Interesting enough - but what's the trend? Is growth in US manufacturing
growing at the same pace as China? Or is it continuing to decline, and will
cross at some point.

------
Frojo
I thought, that a large percentage if not the majority of US 'manufactoring'
is actually agriculture.

------
known
Small companies create jobs within America. Big companies create jobs in
China/India. Hence Govt must break big companies into smaller companies.

