
Why Are Politicians So Obsessed with Manufacturing? - petethomas
http://www.nytimes.com/2016/10/09/magazine/why-are-politicians-so-obsessed-with-manufacturing.html?_r=1
======
hueving
Manufacturing is a target because it's easy for people to see concrete
results. They can point at something and say, "we made that", and it tends to
generate some sense of pride. The same doesn't really apply for service
industries or innovation in the service industries: "we produced consumer
surplus by lowering transportation costs via automation" doesn't roll off the
tongue as well. :)

The same problem exists for creating software. Massive software projects tend
to be unimpressive to people not familiar with the IT industry because they
don't comprehend the scale or fundamental difficulties in computer science
that were overcome to accomplish something.

Compare airplanes and wifi on airplanes. Most people are impressed by an A380,
but they couldn't give two shits about the incredible technology behind
offering wifi 5 miles above the Atlantic ocean at 700MPH ground speed. They
just trivialize it by saying, "yeah, it comes from that little radio".

~~~
rfrank
Manufacturing also provides jobs for both high and low skill workers. As such
can be seen as more valuable to a community than say, a software company that
only hires engineers and a CS center in a different state. Manufacturing was
one of the best roads for a low skill worker to earn good money and move up
the rung economically - something that only seems to be getting harder as time
goes on.

~~~
yummyfajitas
It may seem to be getting harder, but in reality it's not. Rank based measures
of mobility are stable. Since income inequality is up, _absolute_ mobility has
also increased.

[https://eml.berkeley.edu/~saez/chettyetalAERPP2014.pdf](https://eml.berkeley.edu/~saez/chettyetalAERPP2014.pdf)

~~~
rfrank
"When compared to 24 middle-income and high income countries, the U.S. ranks
16th in the amount of inter-generational earnings mobility. The relatively low
level of mobility in the U.S. may arise in part because low-income children in
the U.S. tend to have less stable and lower-income families, less secure
families, and parents who have less time to devote to their children."

[http://inequality.stanford.edu/sites/default/files/Pathways-...](http://inequality.stanford.edu/sites/default/files/Pathways-
SOTU-2016-Economic-Mobility-3.pdf)

~~~
yummyfajitas
The numbers you quote do not address the point under discussion at all.

~~~
rfrank
"However, the increase in inequality has also magnified the difference in
expected incomes between children born to low-(e.g., bottom-quintile) versus
high-(top-quintile) income families. In this sense, mobility has fallen
because a child’s income depends more heavily on her parents’ position in the
income distribution today than in the past.

Since the appropriate definition of inter-generational mobility depends upon
one’s normative objective, we characterize the copula and marginal
distributions separately in this paper."

It would appear we have different normative objectives.

------
twblalock
Last week's NYT article on free trade was pretty good:
[http://www.nytimes.com/2016/09/29/business/economy/more-
weal...](http://www.nytimes.com/2016/09/29/business/economy/more-wealth-more-
jobs-but-not-for-everyone-what-fuels-the-backlash-on-trade.html)

This is the bottom line on American manufacturing:

> From 2000 to 2010, the United States lost some 5.6 million manufacturing
> jobs, by the government’s calculation. Only 13 percent of those job losses
> can be explained by trade, according to an analysis by the Center for
> Business and Economic Research at Ball State University in Indiana. The rest
> were casualties of automation or the result of tweaks to factory operations
> that enabled more production with less labor.

> American factories produced more goods last year than ever, by many
> indications. Yet they did so while employing about 12.3 million workers —
> roughly the same number as in 2009, when production was roughly three-
> fourths what it is today.

Most of the jobs that left are never coming back. They didn't go to Mexico or
China; they simply disappeared because automation and productivity increases
rendered them unnecessary.

If the US sheltered its manufacturing sector from foreign competition, a small
number of jobs might come back, but the increased cost of manufacturing things
in the US would strongly incentivize companies to automate those jobs away as
quickly as possible.

Manufacturing has a powerful political resonance, both in terms of the imagery
of hardworking middle-class factory workers and national pride, e.g. "Why
don't we _make_ things in this country anymore?" However, I suspect that most
politicians who talk about a manufacturing revival understand that it won't
really happen.

~~~
Houshalter
But there aren't a finite number of factories. If more factory work gets
automated, then it will reduce the cost of building more factories and
producing even more goods.

Whereas service jobs seem more finite. There is only a finite demand for
burgers or shelf stockers, unless you increase the population. I really don't
understand how a mostly service based economy is sustainable.

In any case, the service based jobs are just as vulnerable to automation.
There are already a number of prototype burger making robots, for instance.

~~~
philipkglass
There's a finite demand for manufactured goods too. If anything, the price
elasticity for manufactured goods seems likely to be lesser than that for
restaurant meals; I'd eat out more often if it cost less, but I'm not going to
buy additional dishwashers or dining tables for my house no matter how cheap
they get. I'm not going to buy light bulbs or printers faster than they need
replacement due to failure. With laser printers and LED bulbs, that can be
several years between purchases.

~~~
akiselev
You're correct that manufacturing too has a finite demand but it still has an
order of magnitude more potential than the service industry. The vast majority
of service jobs are extremely local or tied to a language/region/jurisdiction
so those jobs have very little to export. Meanwhile, the vast majority of the
world is not yet affluent enough to afford most luxury manufactured goods so
as the population gets wealthier, the market for manufactured goods expands.
As long as the developing world follows western consumerism, and by all vounts
it looks like it is, there is a lot of room to grow. Developed countries who
have centuries of industrialization behind them and a knowledge economy stand
a much greater chance of capturing that newly generated wealth because of
scale and experience. As long as higher labor and regulatory costs can be
offset by automation, the manufacturing can be grown with the world while
services can only really grow with the national population.

~~~
philipkglass
I see a lot of growth potential for manufactured goods if you measure them in
mass. I'm not sure there's great growth potential if you measure them in
money. Every wave of industrial relocation so far has overtopped the previous
one by _lowering costs_. China's steelmakers are exporting more tonnes of
steel than US steelmakers did 50 years ago, but they're also commanding
significantly less money per tonne. For that matter, if poor countries are
going to get wealthier but buy manufactured goods from abroad, where is
_their_ new wealth coming from if not manufacturing or services?

------
superuser2
This is a great article.

The rage of the blue-collar masses is misplaced. It belongs with engineers,
STEM people, operations research, Taylorist management. Globalism isn't the
architect of their fate. We are.

Want enough work to go around? Ban the last 100 years of agricultural
development. That'll create all the jobs you could possibly want, real fast.

Except then you'all find out that more work to go around is a wrong thing to
want.

~~~
vacri
This is my favourite counter to millenials complaining about how booomers had
jobs handed to them on a platter. "What, you want an unfulfilling factory job
doing the same mundane thing day in, day out, probably on your feet, and
probably without climate control? And if you're a woman, explicitly get paid
less for it?"

The boomers may have had a higher employment rate, but they weren't design
consultants and business analysts and so forth.

~~~
douche
I've done both blue-collar, shitty industrial jobs and white-collar cushy
programming jobs. If they both paid the same, I'd be very tempted to take the
blue-collar job. There's something very fulfilling about working with your
hands and producing something tangible. As bad as turning wrenches or pumping
a grease gun can be, days of endless meetings with obtuse stakeholders or
perpetual yak-shaving aren't any better.

~~~
jackcosgrove
Bodies break down faster than minds. Ceterus paribus an office worker will
have a longer career than a factory worker because their mind will still be
sharp when the factory worker has arthritis.

------
nickbauman
Manufacturing has a history of high growth and employment. Services do not.
Economically, service domination means an overall slow-growth economy. Even
highly intellectual services do not come close to the historic growth /
employment curve the nation enjoyed when it was dominated by manufacturing.
Wealth distribution is also heavily-weighted toward to the top with services.
Generally democracies fare better when wealth is more broadly-held.

~~~
titanomachy
Good points. However, the macroeconomic benefits of manufacturing don't
necessarily require people to be _employed_ in manufacturing, do they? If
America builds enough productive, highly-automated factories, the country is
still generating wealth. As long as some of this wealth is captured for the
people, then standard of living can increase.

~~~
dragonwriter
> However, the macroeconomic benefits of manufacturing don't necessarily
> require people to be employed in manufacturing, do they?

"Macroeconomic benefits" as usually measured by aggregate output measures,
clearly not.

 _Distributional_ benefits, OTOH... well, not a strong requirement. But...

> As long as some of this wealth is captured for the people, then standard of
> living can increase.

The challenge is establishing the mechanism for that capture outside of
employment. A fairly fundamental premise of the existing economic system is
that the prime manner of that capture to provide distributed benefits _will
be_ employment, and there is fairly strong resistance (including from the
people who would retain the benefits in the absence of employment without some
knew capture mechanism) to changes to the structure.

~~~
titanomachy
That resistance is strong, but not universally or globally. It's not the kind
of social innovation likely to come from America. But that doesn't mean it's a
doomed prospect at the outset.

~~~
nickbauman
If I am an American, then, the prospect is likely doomed. And likely doomed
for my daughter, too, who has had a terrifically difficult time with her post-
college life even though both her parents are college educated and gainfully
employed.

------
snowwrestler
The holy grail for politicians is growth in jobs that pay well but don't
require college degrees or a ton of specialized training. Manufacturing
provided those jobs for decades.

That's why they are obsessed with manufacturing. If someone could come up with
another industry that does the same thing for unskilled workers, then
politicians would back that just as hard.

The sad part is that manufacturing itself no longer pays unskilled workers
well. People blame China but it's arguable that automation and machines have
taken more jobs.

This is why free college for everyone in the U.S. is a good idea. Our economy
is leveling up, and it's time to level up our education too.

~~~
drzaiusapelord
>jobs that pay well but don't require college degrees or a ton of specialized
training.

This is my thinking as well because this demographic is most likely a swing
voter. College educated white collar types most likely have a lifelong party
affiliation and don't swing their vote, but this demographic often doesn't as
they aren't typically political.

Its easier to blame cheap manufacturing overseas than to admit that our own
homegrown automation is to blame here. Everyone pretending automation isn't
eating the world is something every politician and every party world-wide
seems to have in common, at least or now.

Lastly, there's a puritan ethic at work here. Manufacturing, as well as
farming, is hard work that brings tangible and easy to understand results.
Politicians can talk about those jobs and farmers with no controversy compared
to praising a hedge fund manager or an investment group that created vast
amounts of wealth and jobs. Its politically incorrect to praise the wealthier
people in society, even though they're the ones responsible for much of the
economy. Election season tends to bring out the myth that the economy is run
by hard working men in overalls sweating to produce value, when its really run
in swanky offices by people engaging in fairly technical disciples.

One of the big problems with democracy or at least the demagogy needed to win
an election is that you often can't talk about how things really work as its
seen as too elitist, technical, or just confusing. So certain classes of
people are seen a virtuous like teachers, farmers, or line workers and
anything having to do with big business or finance is instantly vilified. So
we have these elaborate lies and strange incentives (fight for manufacturing?
why?) to make sure no one gets offended or feels inferior.

------
steven777400
The memory is that these old factory/manufacturing jobs were high paying
(middle class), secure, and accessible to people of low intellect, minimal
education, and limited social grace.

The proposed replacements "caregivers, retail workers and customer-service
representatives" are significantly lower wage and also require more "EQ" that
the working man of the prior generation didn't need. The voters these
politicians are addressing are working from a memory of a time when "men were
men", that worked hard in a physical way to produce a physical product; in the
memory, these working men didn't think and didn't emote, they produced.

Now, the voter says, men have been "feminized" by being forced out of a
productive, provider role where a single income could support the family.
Instead, they are placed into a role where they need to express concern, care,
and use soft skills instead of physical strength.

And when they want the same pay and security they had before, they are instead
told to "learn to code" (or learn whatever, get an education). Which is easy
for a coastal educated person to say, but to a line of family men who have not
just eschewed education but actively resisted it, this is a tough pill to
swallow.

~~~
golergka
> actively resisted it

Honest question. Is this a reality or a degrading stereotype?

~~~
thesmallestcat
The entire comment is an absurd stereotype, and about what you'd expect to
find in this forum. Manufacturing jobs weren't (and aren't) filled with a
bunch of meatheads coloring by numbers any more than are construction jobs.

~~~
sithadmin
>Manufacturing jobs weren't (and aren't) filled with a bunch of meatheads
coloring by numbers any more than are construction jobs.

This is true, but the fact that there are definitely stigmas around higher
education in underprivileged and working class communities in the USA is very
much a reality.

~~~
Inconel
You're absolutely right that this stigma exists and needs to be challenged but
I would add that in my experience one, although certainly not the only, reason
for this stigma is that many working class people don't feel that the more
educated classes have much respect for the kind of labor they do. I think US
society in general views a lot of working class jobs as rather undignified and
the stigma against education in these communities is in part an unfortunate
reaction to that.

------
SkyMarshal
Andy Grove spent the last decade or so of his life crusading about this. He
framed the problem as, Silicon Valley invests a great deal in creating
innovation, but outsources the scaling of it. Even though that may be in the
short term best interests of the companies doing the outsourcing, both they
and the country lose out on the economic growth, jobs, and crucial
institutional knowledge that scaling innovations brings. And the knowledge
transfer to other countries better enables them to continue building on the
original innovation, developing their own capacity for original innovation.

[https://en.wikipedia.org/wiki/Andrew_Grove#Preference_for_a_...](https://en.wikipedia.org/wiki/Andrew_Grove#Preference_for_a_.22job-
centric.22_American_economy)

~~~
philipkglass
Good point. I don't think that every country in the world should be aiming to
run an export-manufacturing trade surplus; that's mathematically guaranteed to
end in tears. I do worry about institutional capability loss on the scale of
companies, industries, and whole countries. Look how hard, over-budget, and
over-schedule it has been to resume building nuclear reactors in the USA after
the entire country took a decades-long break from new unit construction. There
was too much knowledge lost from aging humans' heads before it could be passed
on to the next generation on the job, and now it's very expensive to
regenerate.

~~~
jackcosgrove
Export mercantilism seems to result in the middle income trap. Even Japan
never caught up. I would prefer not to have that kind of economy. Research and
innovation yields the highest margins.

------
coldtea
> _Why Are Politicians So Obsessed with Manufacturing?_

Because when the shit comes to shove and the global economy takes a nosedive
or your previous friendly third world manufactures give you the finger, having
a "service industry" is worth nothing, but being able to produce the actual
shit your businesses design and sell/export, matters.

Of course for the US this might be less so, because they can always force, by
diplomacy or might, those developing world manufacturers to comply.

Another question would be why are people like the author of the article not
particularly hot for manufacturing?

Because they are upper middle class pundits, have worked all their lives in
the culture/media/academic etc industries, and could not care less for lost
manufacturing jobs and other such stuff.

That's how we get books about the world being flat, industry doesn't matter,
it's all "information" and "creativity" now, from people that could not suffer
a day without electricity (and the hard work that goes into producing it), or
without their car, etc.

~~~
pjc50
"Service industry" includes financial services, which have been hugely
lucrative to the West.

It's a globally integrated supply chain, and cannot be otherwise. There is no
way countries are going back to a blast-furnace-to-car vertically integrated
manufacturing world. It costs far too much and you couldn't even do it back
when Ford tried it. He needed to import rubber, modern cars need to import
chips.

The only non-globalised manufacturing chain is defence, which is instead
prohibitively expensive.

Manufacturing is popular because it's _percieved_ as a source of blue-collar
jobs. Not only has that declined due to automation, but I think that one of
the reasons for the decline in Western manufacturing in the first place was
union-busting and labour relations issues. Part of the reason Germany has
retained its manufacturing reputation is avoiding that failure mode.

~~~
_pmf_
> "Service industry" includes financial services, which have been hugely
> lucrative to the West.

If you buy into the philosophy that it is something other than an elaborate
global Ponzi scheme.

~~~
digi_owl
Ol' Marx saw capitalism as a 3 way standoff between workers, industrial
capitalists, and financial capitalists. And he lamented that while the
industrial capitalists would in the long run be better off siding with the
workers, they would invariably side with financial capitalists until it was
too late.

------
sriram_sun
The votes that can turn the tide in this election are those in the rust belt.
Manufacturing is the key word that gets their attention. I believe that's why.
All other reasons are secondary. It was about the financial crisis in 2008 and
Bain Capital in 2012 which ended up affecting manufacturing jobs.

~~~
trhway
yep, politicians say what their voters like to hear (and do what their donors
want to be done :). For example California politicians don't talk about
manufacturing, instead they talk education, environment/climate change,
security, minorities rights, some talk agriculture, etc... some even talk
UFO/aliens (if you didn't read the official CA booklet listing candidates and
their statements for this year race for the US Senate Barbara Boxer's seat you
missed a lot of fun :)

------
helloworld
I wasn't aware of these facts:

\-- _[T]here can be no revival of American manufacturing, because there has
been no collapse. Because of automation, there are far fewer jobs in
factories. But the value of stuff made in America reached a record high in the
first quarter of 2016, even after adjusting for inflation._

\-- _[T]here were 64,000 steelworkers in America last year, and 820,000 home
health aides.... Soon, we will be living in the United States of Home Health
Aides, yet the candidates keep talking about steelworkers._

Given the opportunity, I think I'd vote for McKinsey, Bain, or BCG to manage
the executive branch instead of our current Presidential candidates.

~~~
Animats
Here's the US table of employment by category.[1] (I keep mentioning this
table in discussions of employment.) 14% of the workforce makes all the stuff.
That's manufacturing, mining, construction, and agriculture. 14%. US
manufacturing employment peaked in 1979. Manufacturing output is at peak now.

That 14% number was about 50% in 1950, and maybe 90% in 1900. That's how much
things have changed.

As for imports, China's government has decided that it is going to reduce its
imports from the rest of the world. This is part of the "China 2025" program
announced by Li Keqiang in 2015.[2] The US may have to reduce its imports from
China to keep up. At most, though, this will add a few percent to
manufacturing employment.

[1]
[http://www.bls.gov/emp/ep_table_201.htm](http://www.bls.gov/emp/ep_table_201.htm)
[2]
[http://www.globaltimes.cn/content/922394.shtml](http://www.globaltimes.cn/content/922394.shtml)

~~~
jcranmer
Manufacturing employment can't be 90% in 1900--agricultural employment
certainly would have dominated. The 50% of 1950 also seems high.

According to <[https://www.minnpost.com/macro-micro-
minnesota/2012/02/histo...](https://www.minnpost.com/macro-micro-
minnesota/2012/02/history-lessons-understanding-decline-manufacturing>),
manufacturing employment peaked at about 35% in 1950s. In 1900, it was around
25%, with services about 33% and the rest in agriculture. That graph has
services employment always outpacing manufacturing (which meshes with my
knowledge of US history) and manufacturing only outpacing agriculture around
the 1910s, 1920s (which also meshes with my knowledge of US history--
agriculture was _very_ labor intensive prior to mechanization).

~~~
Animats
I meant agriculture, mining, construction, and manufacturing - the making of
physical stuff. All that is only about 14% today. Not sure what the Minn
Post's definition of "industry" is.

(Correct MinnPost link: [https://www.minnpost.com/macro-micro-
minnesota/2012/02/histo...](https://www.minnpost.com/macro-micro-
minnesota/2012/02/history-lessons-understanding-decline-manufacturing))

------
yakult
>According to the Bureau of Labor Statistics, there were 64,000 steelworkers
in America last year, and 820,000 home health aides — more than double the
population of Pittsburgh. Next year, there will be fewer steelworkers and
still more home health aides, as baby boomers fade into old age. Soon, we will
be living in the United States of Home Health Aides, yet the candidates keep
talking about steelworkers.

I'm picking up a sort of 'gamers are dead' vibe from all this. I wonder if the
media considers Gamergate a sort of success story and template for future
political discourse? The argument would be that the issues faced by outgroup
demographic X are not real, because outgroup demographic X is dying anyway,
and is being replaced by ingroup demographic Y, and is also full of
misogynists and/or racists and/or basement dwellers and/or rednecks and/or
Trump voters.

As supporting evidence, I will note the author just casually slipped in there
that steel workers are all white men while service workers are mostly women.

------
jfoutz
Politicians are amateurs. I don't mean that in a pejorative way. Politicians
are experts at politics, they can achieve consensus in seemingly impossible
circumstances. If you pick a random politician, and ask them to design a
transmission, or perform open heart surgery, they'd do as poorly as you or me.
Yes, there are politicians from all walks of life, and you can probably find a
surgeon politician. In general, the thing they're really good at is politics.

It sucks because they're called on to provide solutions to deep problems, with
only the skills of enthusiastic amateurs. Manufacturing solved a lot of
problems. It's completely reasonable for an amateur to look at history for
past solutions to current problems.

For reference, the us congress has a panel of 700 or so experts in all sorts
of fields to help write policy. This is in addition to each congresspersons's
staff. There's something on the order of 2000 people available to write
legislation. And about 10000 pieces of legislation written. So each potential
law gets a few months of effort.

It boils down to a congressperson (probably a lawyer), a few enthusiastic
political scientists, and a few economists to shape national policy.

It's not that they don't produce good work. They're smart hardworking people.
A trillion dollar budget is probably as difficult to produce as a decent
compiler. That's the kind of thing we'll see congress try to slap together
right after the election. It's not much different than a team of undergrads
trying to get their compiler to pass test cases.

It's not inherently bad, it's that sometimes problems are really hard, and
they should probably be handled by experts. We don't have a good way of
collectively picking experts, so we pick amateurs and hope for the best.

~~~
JDiculous
How do we fix this?

Here's an idea - direct democracy where one can only vote on a topic that
he/she has proven a minimal set of competence in. This could be in the form of
an exam on a topic (eg. economics) and/or logic test. The goal is that one
should not be allowed to vote on something like climate change without knowing
the science and data behind climate change.

We need to acknowledge that the world is too complex for one person to know
what's best for everyone on every single topic. Our system of representatives
is totally outdated now that we have the internet.

The beauty of direct democracy is that it removes the politicians. As long as
there are politicians, there will always be corruption (eg. bribery).

Ideally of course we'd have AI deciding our best course of action because
humans are inherently biased, but that's further down the road.

~~~
Broken_Hippo
Corruption is one of those things that probably isn't going away any time
soon: It isn't just a plague on politicians, but other areas of life as well.
Businesses, etc.

And unfortunately, you have to have _someone_ produce those voting tests. How
do you think they will get their positions? Do you think that the tests in
states such as Utah will have the same sort of things as tests in California
or Vermont? In your version of the system, the politicians have simply changed
professions.

Besides, there is actual need for politicians at this point (the AI still
seems pretty far out). It is good to have someone to organize large
infrastructure projects, good to have folks handle money and dividing it up,
overseeing military operations - and it is good to have folks outside some of
the industries asking questions and learning and trying different solutions.

Corruption itself won't go away any time soon: The best we've been able to do
is minimize it.

~~~
JDiculous
I'm not saying that every decision must be handled by the entire voting
populace, just that we need to embrace a more issue-focused mindset and
acknowledge that the world is too complex for one person to know what's best
on every policy stance.

The test should be on the federal level (knowledge is universal), and wouldn't
be designed by politicians. The tests should be very very basic and test a
minimal level of understanding. For example you should be able to explain what
the Fed does if you were voting on an issue pertaining to monetary policy. The
questions would be as objective as possible.

Yes we may still need politicians, but again the main idea is that we seek to
have people only working on matters they're qualified for rather than some
jack of all trades who's supposed to have the country's answers on everything.
Military operations would be handled by military personnel, housing policy
would be designed by experts in housing policy, energy and climate change
issues would be designed by experts in those fields, foreign policy would be
dictated by foreign policy experts, etc.

Could this new system be a slippery slope? Are there other problems? Of
course. But our current system is failing - just look at the presidential
"debates", they're a complete laughingstock. We need to try to figure out how
to improve this broken system rather than keep perpetuating the status quo.

I'd love to hear your ideas on how we could improve things.

------
bigger_cheese
I work at a steelworks in Australia. The economic conditions are not identical
to America but a lot of the same pain exists.

Australia also has worse Anti-dumping protections then the US. China is
dumping steel (i.e selling below cost) into our market - see:
[http://www.abc.net.au/news/2016-09-28/china-trade-
arrangemen...](http://www.abc.net.au/news/2016-09-28/china-trade-arrangements-
questioned-over-steel-dumping/7884026)

The government deciding to build a submarine fleet 'in Australia' was a huge
election issue. The local unions around here are campaigning on forcing state
government to use 'local' steel as a condition of their tender process for
infrastructure projects. I think they have a point somewhat, it is pretty
absurd that they built a sports stadium about 2km up the road from our huge
steel plant and imported all the Steel for it.

I don't think there is an easy answer. Throwing the industry the odd submarine
or two to supply material for isn't long term sustainable. However If it is
enough to kick-start a ship building industry though who knows...

~~~
wycx
Are any specialty steels (tool steels, etc.) made in Australia, or do we just
make low carbon structural steel and a little alloy steel?

When I call up steel suppliers and ask if they have any maraging steel, they
just laugh at me.

~~~
bigger_cheese
The technical capability is there but my understanding is the sales volume is
not present for speciality grades to be profitable.

It is basically an economy of scale problem unless you make specialised grades
in large amounts (thousands of Tonnes) it is not economical. The market for
that volume is not there.

------
EGreg
This is why: [https://en.m.wikipedia.org/wiki/Three-
sector_theory](https://en.m.wikipedia.org/wiki/Three-sector_theory)

The Great Depression saw the "creative destruction" of farm labor. People
migrated to cities and it took a long time for the economy to shift to
manyfacturing.

Manufacturing jobs disappeared more gradually, but are now gone due to
automation and outsourcing.

The only way they will come back is to robots.

The next sector is IP, it's one of the USA's biggest exports -- movies, music,
ideas, brands, etc. Designed in California, assembled in China. That's why the
USA has such a strong IP lobby and negotiates international treaties and
bullies guys like Kin Dotcom.

What's left after that? Well, why do we all NEED jobs? Because currently wages
is the primary mechanism of getting money to the masses. But demand for human
labor is falling.

------
brightball
From an earlier comment, but this is why:

"For every $1.00 spent in manufacturing, another $1.81 is added to the
economy. That is the highest multiplier effect of any economic sector. In
addition, for every one worker in manufacturing, there are another four
employees hired elsewhere. (Source: NAM calculations using IMPLAN.) - See more
at: [http://www.nam.org/Newsroom/Top-20-Facts-About-
Manufacturing...](http://www.nam.org/Newsroom/Top-20-Facts-About-
Manufacturing/#sthash.CCQopC41.dpuf")

[http://www.nam.org/Newsroom/Top-20-Facts-About-
Manufacturing...](http://www.nam.org/Newsroom/Top-20-Facts-About-
Manufacturing/)

~~~
ComteDeLaFere
That's interesting. Would it be correct to say that $1 spent on importing
goods to the US would still generate the additional 81 cents of additional
value in that country?

And if that's the case, would we still get the 81 cents in additional value
if, due to global competition, we were able to import those same goods at 50
cents?

Or am I overthinking this?

------
andrewfong
Is there some dystopian novel where the majority of workers spend their time
taking CAPTCHAs? I almost expect it to happen, as a way to keep the masses
occupied in a way that's difficult to automate.

~~~
hasenj
That will either be automated, or those workers job would actually be doing
that to train the AI that will solve the captcha.

------
nickpinkston
I figured they were just suckers for factory tours, or at least photos ops
with the "working man".

Also, a lot of the Left longs for the days of big factories and big union
collective bargaining that could raise the wages a lot of people quickly. It's
a great thing to point to with good economies of scale. Globalization has made
this a mostly untenable strategy, but the longing remains.

~~~
ZeroGravitas
[http://georgeosborneinahighvisjacket.tumblr.com/](http://georgeosborneinahighvisjacket.tumblr.com/)

------
anigbrowl
They're not, but the demographic they need to appeal to is, and it's not clear
how to sell people on capitalism in an age of diminishing labor requirements.
Capitalism as we know it is almost over; there is no rational reason for
people to starve while a tiny minority accumulates all the capital. History
tells us that once enough people figure out that they've got no prospects
they'll gang up on the elite, kill them, and attempt to redistribute the
spoils.

I'm not being hyperbolic, I expect western-style democracy to collapse within
the next 10-20 years.

------
blinkingled
Maybe because they're catering to a vote bank that was most affected by
manufacturing / factory jobs that went overseas? And there's little else those
voters could relate to other than someone bringing back the jobs that they
know well. There's also the righting the wrong thing that's appealing to many.

As TFA points out there is little chance of revival of American manufacturing.
TFA makes a very good point that most of those who lost their factory jobs
have moved to service industry and that's what the candidates should focus on
making better.

------
mc32
Because this is the work people who didn't go to college or uni can do and
make a "middle class income" with a little vocational training (no real maths
needed).

Same as why the mittelstand is so important.

------
brchr
Here, for instance, is a graph of manufacturing jobs per capita in the US:

[https://www.numer.al/us_bls_data/figures/manufacturing-
emplo...](https://www.numer.al/us_bls_data/figures/manufacturing-employees-
per-capita)

It’s quite clear that manufacturing jobs have just been slowly and steadily
disappearing over the past 70+ years.

Viewed at this scale, the debate over the bump in the last 6 years seems
totally silly. Moreover it’s hard to imagine a policy that would turn that
kind of trend around.

~~~
noobermin
It is very easy to zoom out an fit a line but the step like changes at certain
points are interesting. Averaging over the variations might throw away a lot
of interesting information.

But you are right about one thing, the curve has not dipped up appreciably in
the last 30 years. All I see are steps, plateau's where the level is kept
before the next drop.

EDIT: can't do math or I keep thinking it's 2000's still.

~~~
brchr
Agreed that it'd be interesting to try to figure out what explains those
cycles and steps. Recessions in general? Would be interesting to see what
correlated with those points in time.

~~~
bzbarsky
At least in the last 40 years of that graph, recessions seems to be it.

A recession hits, some people get fired (sticky wages, etc, etc), the recovery
comes and it's cheaper to automate stuff than hire people. Then things coast
for a while. The cost of automation keeps falling, people keep getting
relatively more expensive, but in good times generally you don't get people
getting fired en masse because times are good and the employer is making a
profit anyway. Then a recession comes, and the cycle repeats...

------
ArkyBeagle
In the 19th Century a lot of people were "physiocrats" \- people for whom all
progress had to relate somehow to the agricultural production of food. This
was most stridently expressed in the denial of ( some ) patents to Cyrus
McCormick for the combine harvester.

Manufacturing ended that, especially "factory farming".

So now, the logistics and communications revolutions are doing to
manufacturing what manufacturing did to agriculture.

It's the circle of life...

------
madengr
Why can't I buy a toaster made in the USA, even if it is off a highly
automated line? Because it's still cheaper to make in manually in China.

Even if it's automated, it will still be cheaper to automate it in China.

~~~
philipkglass
Does this help?
[http://www.b4usa.com/tag/toaster/](http://www.b4usa.com/tag/toaster/)

I've bought quite a few things made in the USA (or other countries with decent
worker and environmental protections, like Italy, Germany, Japan...) that
other people seem to usually get from China. Anecdotally, I've noticed that
people who will talk about how Grandma's toaster or washing machine lasted
forever and it's a shame you can't buy something like that today _are not
willing to budget for it like Grandma did_. Grandma spent a lot of money on
her appliances in 1950, whether you want to adjust by consumer price index or
just look at (e.g.) the ratio of minimum wage to sticker price. Are you
willing to spend thousands of dollars on a washing machine, to match relative
buying power and prices from the middle of the 20th century? If so, you can
still find appliances that are built like a tank, built by workers paid decent
wages, built in factories that don't just dump all their trash into the
nearest river. But if you want to buy a toaster that lasts a long time, is
made in the USA, and costs only a little bit more than the Chinese toaster,
yeah, I agree _that_ is hard to find. There is good stuff still available at
the high end. The low end has gone a lot lower.

~~~
chiaro
Yeah, on the other hand prices really have dropped much more than quality. I'm
ten years strong on a toaster I picked up from Target for (and I can remember
this, for some reason) $12.

------
theoh
Manufacturing fetishism:

[http://www.johnkay.com/2016/08/29/the-economics-and-
politics...](http://www.johnkay.com/2016/08/29/the-economics-and-politics-of-
manufacturing-fetishism/)

------
rebootthesystem
Because millions of people have been affected. This means votes. If you can
promise some bullshit and they buy it, you got votes. Lots of them.

Contrary to popular belief, politicians only care about their own enrichment
and careers. They couldn't give one iota about the needs of the people. They
want votes. They'll say anything they have to say to get them. They'll do
anything they have to do to get them. And one in office they'll do nothing for
the people who voted for them. This is true world wide and it isn't any
different in the US.

------
brightball
Because the numbers show that every dollar of manufacturing investment in an
area produces $7.

~~~
ZeroGravitas
How much do other types of investment produce?

~~~
brightball
Apparently I had my numbers wrong. Here's better info:

[http://www.nam.org/Newsroom/Top-20-Facts-About-
Manufacturing...](http://www.nam.org/Newsroom/Top-20-Facts-About-
Manufacturing/)

"For every $1.00 spent in manufacturing, another $1.81 is added to the
economy. That is the highest multiplier effect of any economic sector. In
addition, for every one worker in manufacturing, there are another four
employees hired elsewhere. (Source: NAM calculations using IMPLAN.) - See more
at: [http://www.nam.org/Newsroom/Top-20-Facts-About-
Manufacturing...](http://www.nam.org/Newsroom/Top-20-Facts-About-
Manufacturing/#sthash.CCQopC41.dpuf")

------
rangibaby
Manufacturing represents middle class jobs that have largely gone away thanks
to globalization, outsourcing, and automation among other things. One of the
reasons the Boomers were so rich compared to following generations was that it
was easy to get one of those jobs with minimal education, a college degree was
not a necessity to make a decent wage and buy a house, a car, etc.

------
chubs
Big factories can be retrofitted in times of world war to build
tanks/guns/etc. It's seen as a national security thing.

~~~
burfog
Two more national security reasons:

1\. There is the problem of depending on potential enemies (all others have
potential to be enemies) for goods that are critical to the military and/or
general economy. Suppliers can threaten to cut supplies. Note that this can
happen even if actual shooting war is unlikely; the threat to cut supplies is
a brutal negotiating tactic that can block us diplomatically. For example, if
we depended on Russia, they could demand that we support the Syrian
government.

2\. Lots of physical things contain computer chips. He who builds them is in
control. Remember when France gave the UK some secret codes to make
Argentina's missiles (purchased from France) fail. It's not just military
equipment. Consider your Ethernet card and/or motherboard chipset. It could
include a hardware debugger with full memory access, controlled by magic
packets. What happens when we can only get those from government-owned Chinese
companies? What about modern computerized farm equipment that phones home for
licensing? If that were foreign, could a foreign power disable our farm
equipment at a key time, causing us to face food shortages?

~~~
rjsw
I don't think the example in your second point is true. France did help the UK
a lot but the Exocet missiles worked fine, one was even launched from the back
of a truck.

------
macspoofing
Why are politicians so obsessed with farming and agriculture?

The reasons for both are not dissimilar.

------
nylsaar
Manufacturing jobs and service sector jobs are not mutually exclusive.
Historical trends do not represent an evolving sophisticated economical
stragety, but document economical needs met. The author suggests manufacturing
jobs are irrelevant, but all jobs are relevant and necessary.

~~~
douche
Having a good source of manufacturing jobs can float an order of magnitude
more service jobs in an area. Look at every decaying mill town across the
northeast where the mills went under and vibrant local downtown economies
folded up afterwards.

------
intrasight
Politicians like wearing hard-hats. Doing so at a software company looks weird
- usually.

------
DiffEq
Manufacturing is a strategic asset. When/If war ever comes upon us again we
will need such assets to preserve ourselves. We must not let hubris cause us
to think we are above the ruin as other great peoples have suffered.

~~~
3minus1
As other have pointed out, US manufacturing is at an all time high. It just
doesn't require as many people these days.

------
rayiner
There is a lot more dignity of work in manufacturing. You're not servicing
some old person who can afford to have a home health aid--you're making a
product for people to buy (including other people like you).

~~~
pavlov
I can't understand. Helping a fellow human being who is too weak to care for
herself is almost the definition of dignity to me. It may be dirty work, but
there's nothing more important.

In contrast, the manufacturing job turns you into a pre-programmed cog in a
big machine that consumes substantial amounts of natural resources to produce
something that will most likely end up in the junk heap in a couple of years.
Where's the dignity in that?

~~~
rayiner
Dignity of work doesn't have anything to do with importance. It's about power
relationships: vendors are in a different relationship with their customers
than service workers are with the people they serve.

In Manhattan, a nanny probably makes more than a journalist--but is there any
comparison in which job is more dignified?

~~~
maverick_iceman
What's undignified about a nanny's job?

------
sunstone
Because employees of manufacturers have more power in the value chain than in
most other jobs that employee high school graduates. This pushes up middle
class wages without government intervention.

------
croon
> From an economic perspective, however, there can be no revival of American
> manufacturing, because there has been no collapse. Because of automation,
> there are far fewer jobs in factories. But the value of stuff made in
> America reached a record high in the first quarter of 2016, even after
> adjusting for inflation. The present moment, in other words, is the most
> productive in the nation’s history.

Pay no attention to the top % - that reaps all that benefit of that
automation, and widening the wealth disparity chasm - behind the curtain.

------
blazespin
It's because Germany and Japan is so successful with manufacturing. Donald is
asking why the US cant compete with Germany and Japan.

~~~
mywittyname
We outproduce both Japan and Germany combined in manufacturing. Manufacturing
is roughly 18% of GDP for each Japan and Germany, but only 12% of the USA.

Germany GDP: ~$4 trillion.

Japan GDP: ~$5 trillion.

USA GDP: ~$17 trillion.

9 * 0.18 = 1.6

17 * 0.12 = 2.0

So, as usual, Mr. Trump's ignorance is causing him to ask the wrong questions.

~~~
burfog
Now lets divide by people. For people, it's 208 million and 321 million.

The USA is getting $6355/person from manufacturing.

Germany+Japan is getting $7792/person from manufacturing.

They beat us, earning an extra 22.6% per person from manufacturing.

~~~
mywittyname
I just saw this. Manufacturing is a much smaller segment of USA economy
though, so per-capita is a bad metric.

Maybe it would be okay if you weighted it based on % of the economy, in which
case the USA would be $6355 / 0.12 = $54,441 vs 7792 / 0.18 = $43,289.

So, weighted GPD per capita, the USA comes out way ahead. And actually, the
weighted GDP/cap in manufacturing for the USA is higher than the average
GPD/cap of the economy overall, which is just $53,041.

------
markhahn
ironically, manufacturing is an industrial-age metaphor: people still seem to
imagine that it can or could drive the economy, that election-quantity people
might be supported by manufacturing, and that location of manufacturing is
negotiable. all arguably untrue.

you can't brag about unicorns.

------
jhoechtl
Because manufacturing creates true value opposed to digital fiat goods.

------
wott
Manufacturing jobs are the only jobs who build base value, from which all the
jobs derive. Service and retail will sooner or later collapse when there is
nowhere to extract money from.

------
ianai
Want more service jobs? Make sure people have money to pay for services. This
feels like a strong basis for UBI

------
benderther0bot
After looking at Mr Appelbaums Linkedin entry I wondered why anyone would
listen to his opinions about this as opposed to any one elses.

------
known
Income for bottom 90% has declined
[http://www.oftwominds.com/photos2015/income-
growth4-15.png](http://www.oftwominds.com/photos2015/income-growth4-15.png)

------
serge2k
> Manufacturing was, logistically speaking, easier to organize. There were
> lots of workers at each factory, and most knew one another. Service work is
> more dispersed and done in smaller crews. Workers living in the same city
> and employed by the same retail chain, for example, would likely know only a
> handful of their compatriots. Fostering a sense of trust and shared purpose
> under these conditions is difficult.

Plus you can't just fire everyone and shut down the factory when they start
talking union.

------
andreiw
Automation? Oh is that how you see Foxconn employees? That would explain quite
a bit...

Most of light and heavy manufacturing is done somewhere else. Electronics.
Housewares. Clothing. Tools. Equipment. Cars. Materials, both raw and those
undergoing technological processing. High tech. A service economy? That's nice
- but there are only so many prostitutes, bank clerks and Mickey D employees
required, so what is everyone else going to do? Navel gaze? Fill jails?
Starve? More importantly, what are you going to offer the rest of the world in
exchange for all that stuff you can't make anymore? Democracy? Or just bomb
them? At some point even bombs will be hard to make, due to lack of necessary
facilities, equipment, materials, knowledge and experience. Just see how well
"resurrecting" last century's space knowledge has worked out for NASA.

~~~
bsder
> Automation? Oh is that how you see Foxconn employees? That would explain
> quite a bit...

Even if you "resurrect" manufacturing, automation means less people.

Quoting:
[http://www.bizjournals.com/pittsburgh/blog/innovation/2015/0...](http://www.bizjournals.com/pittsburgh/blog/innovation/2015/05/why-
ati-spent-1-2b-on-its-brackenridge-facility.html)

"Perhaps most surprising about the HRPF was the relative lack of employees on
the floor of the massive facility. While ATI employs about 2,500 throughout
western Pennsylvania and eastern Ohio, the technology and automation of the
HRPF only requires seven operators and nine maintenance employees per shift,
making the operation safer and more efficient, according to Deluca."

That's not a recipe for a manufacturing job resurgence independently of
whether you think that is good or bad.

~~~
madengr
Wow, cool facility. That is some automation.

