
Britain “haemorrhaging” manufacturing jobs - endswapper
http://www.thelondoneconomic.com/news/britain-haemorrhaging-manufacturing-jobs/06/06/
======
turbinerneiter
I have two very raw ideas about this slowly taking form in my brain.

1\. Factories produce wealth. If you look at the nations doing good and the
nations doing bad[1], factories, I think, make a difference. USA completely
moved their means of production to Asia, thinking they could produce cheap and
make huge profits. Works for Apple. Doesn't work for the consumer. These jobs
are just missing. Nobody can buy. So people borrow. Until the lenders crash,
because they can't pay back. But the banks have to lend, that's their
business! And when companies don't borrow because they don't build factories,
then the consumer has to borrow. Needs to, because he doesn't get payed well.

2\. With factories gone, our system doesn't work anymore. Forget Asia. Robots.
And someday not even big robots in factories, but a desktop replicator. There
is so many jobs that will just cease to exist. Sure, there will be new ones,
but some researches claim that already today robots take more jobs than
create. Especially combined with the low investments. Corporate profits are at
an all time high, savings are at an all time high, money is cheap (negative
interest rate!) but still investments are low. Companies aren't borrowing.
Nations are still playing the ordo-liberal game and cut spending. Consumers
are the only ones borrowing.

It's insane.

It's like capitalism forgot how capitalism work. Companies should borrow,
invest, earn, pay their workers, and the workers consume. Now companies save,
pull profits, cut wages and replace workers by cheaper means of production and
the jobless borrow to consume.

Every couple of years this crashes because people can't pay their loans.
Government takes over the debt to reset the cycle, but because their increased
debt they have to cut their spending.

[1] I audaciously define good/bad in way that it serves my argument.

~~~
pavlov
_If you look at the nations doing good and the nations doing bad[1],
factories, I think, make a difference._

I'd like to know what your definition actually is because there seems to be
very little connection. Some examples:

Italy and Japan are first-world nations with lots of factories but middling
growth.

Bangladesh is a poor nation with lots of factories but weak prospects.

[Edit -- in my original post I referred to Switzerland because I misremembered
the stats. It does have a smaller share of labor force in industry than
neighboring Germany or Italy, but Swiss manufacturing is still very
significant. Thanks to the posters who corrected my mistake.]

~~~
turbinerneiter
Well, Switzerland is rich because they have our tax-money. They also do have a
lot of high-tech, precision engineering industry, don't they?

Japan is an interesting example - they have negative interest rates since a
very long time.

Basically, I was talking about Germany. The German automotive industry plus
the machinery section create a lot of well paying industry jobs (although the
well-paying part is really hollowed out and wages rising way to slow in
Germany). The political landscape is stable (although I despise the
conservative government). Germans version of Trump/Brexit/Le Pen has about 8%
in the surveys for the election. Gini-Index is way more healthy than in other
nations (although getting worse).

But you are completely right, there is a lot of things missing in the picture
(or wrong).

~~~
prodmerc
Since you were talking about Germany and jobs being a means of distributing
wealth of sorts, what do you think about the taxes? Germany, Austria,
Netherlands, Belgium all have some very high taxes on high earners compared to
the US and UK, and more importantly, the progressive tax thresholds are much
better adjusted for poor and middle class people to have more disposable
income. Germany even has a solidarity tax on top of the normal income tax,
which also goes into the country's budget. Correct me if I'm wrong.

And for some reason, these countries' rich people actually do pay their taxes
for the most part, instead of hiding them using various means. That's either
because of the education or the culture, I don't know.

~~~
ransom1538
In Belgium your tax rate is %50 (over 38,080eur[2]). That is totally insane I
thought...

The US: For hn types, the tax rate would be 28% (fed) + 10% (state tax CA) +
9% (medical cost deductions per paycheck[1]) + 8% sales tax (ca) = 55%? (also
subtract medical bills will seize all your property later in life though, and
any private schools needed). I am sure Belgium has many other costs, hell add
%10 to Belgium. It is still comparable.

[1] [http://budgeting.thenest.com/much-average-paycheck-gets-
dedu...](http://budgeting.thenest.com/much-average-paycheck-gets-deducted-
health-insurance-31197.html) [2] [http://taxsummaries.pwc.com/ID/Belgium-
Individual-Taxes-on-p...](http://taxsummaries.pwc.com/ID/Belgium-Individual-
Taxes-on-personal-income)

~~~
turbinerneiter
Add university. I graduated with 20k savings, Americans with 200k debt.

------
jdietrich
British manufacturing output has grown significantly over the last 40 years,
despite a 60% reduction in manufacturing employment over the same period.
We're making more and better stuff with far fewer people.

The union narrative of manufacturing having been "run into the ground" by
neglectful governments is clearly bogus, as is the nationalist narrative that
manufacturing jobs have been exported abroad. This is about automation and
mechanisation.

[http://www.thisismoney.co.uk/money/news/article-2803400/UK-m...](http://www.thisismoney.co.uk/money/news/article-2803400/UK-
manufacturing-output-increased-1978-ONS-figures-show.html)

~~~
rrggrr
Except OPs article laments the loss of jobs, not output. And, its not clear
from your reference if the increase in output should be attributed to larger
dollar goods (eg. Rolls Royce engines), or more smaller dollar goods. Likely
the former I would think.

------
keithpeter
Anecdotal: I walk into the centre of Birmingham through Digbeth across the
river Rea in its little culvert most days and have done since around the late
80s. Used to go past small metal bashers and 'repetition' companies with doors
open for ventilation. Metal baskets full of washers, and a galvanising company
with a huge Victorian shed dipping parts into vats. Now, mostly garages, car
scrap and rebuilding. A few hipster galleries and coffee bars.

Historical Note: Thatcher's administrations moved the UK economy from
manufacturing to service industries. This has always worried me through the
volatility of the service sector. Germany (then West Germany) went down a
different path.

Numerical sideline: West Midlands (mentioned in OA) has a population of 5
million.

Breaking News: Jeremy Corbin is addressing a rally down the hill. Big turnout.

Background: GMB is a TUC affiliated trade union

[https://www.gmb.org.uk/](https://www.gmb.org.uk/)

[https://www.tuc.org.uk/britains-unions](https://www.tuc.org.uk/britains-
unions)

~~~
youngtaff
I understand the sentiment but it's a little harsh to say Thatcher moved the
UK economy from manufacturing to service industries (although that seemed her
intent).

From 1970 - 1980 the percentage of GDP from manufacturing fell by 5%, from
1980 - 1995 it then fell by another 5%

[https://fullfact.org/economy/did-labour-decimate-
manufacturi...](https://fullfact.org/economy/did-labour-decimate-
manufacturing/)

~~~
keithpeter
Agreed, perhaps I should of said ' _nudged the rudder in the direction of
services_ ' and later governments rolled with the course change as the path of
least resistance.

PS: the geographical distribution of those GDP share reductions might bear
investigation. The kinds of jobs available in the Black Country changed
_radically_ in the 1980s.

~~~
youngtaff
I think manufacturing has been in decline since the late 50s but can't find
data to back that up.

One of the challenges I see is that most of UK manufacturing has gone high-
tech and become more automated so less opportunities for people in sheds!

------
rrggrr
The concern for Britain and other countries ought to be the loss of
sovereignty that accompanies a decline in manufacturing of the magnitude the
article describes. When a country's infrastructure and supply chain is
dominated by imported goods a country's ability to make decisions in its
citizens best interests declines. Its ability to make fair trade deals
declines. Its national security declines.

~~~
kasey_junk
Nothing in the article suggests there has been a decline in manufacturing
output in Britain but a decline in jobs.

I don't know the situation there enough to know what is happening, but in the
USA for instance the decline of jobs in manufacturing wasn't accompanied with
a decline in output, quite the opposite.

~~~
_delirium
Depends heavily on how you measure. U.S. manufacturing looks good _by value_
of the manufactured products, because it remains strong in a handful of high-
value manufacturing segments. That's an important measure, but may or may not
capture what everyone is interested in. Besides employment, other measures may
include, for example, how dependent is the country on imports for items vital
to national security? An exclusive dependence on imported steel can have
downsides even though steel is now a low-value commodity. Another measure is
the diversity of the overall manufacturing industry. Does a country
manufacture a whole range of products, or is it highly specialized in a few
segments? The latter can still be good by value, but may be more brittle, and
make it harder to start new companies in certain fields due to a lack of a
local ecosystem (the U.S. has nothing like the Shenzhen ecosystem in
electronics, for example).

------
jimnotgym
Isn't the world "haemorrhaging" manufacturing jobs? Isn't this just
mechanization?

~~~
wmil
Not really. This is actually a side effect of GHG policies.

Traditional British industries like steel production can't possibly compete
with China when they have to pay carbon offsets and their competitors don't.

So British factories are being shut down, even if they are more carbon
efficient.

~~~
abritinthebay
That's... a vast (and very inaccurate) over-simplification.

------
droithomme
I buy RaspberryPi stuff and cheeses that are made in Britain. I also have a
nice vintage Burberry trench coat that I treasure. I'm not sure what all they
make there. The article talks about "manufacturing jobs" without any examples.
Examples for such an article, especially including changes that exemplify the
claims of the article that manufacturing is down, would be really nice.

------
tonyedgecombe
Employment in manufacturing has been falling since the sixties, this isn't a
recent occurrence.

------
Animats
_The West Midlands has lost almost 100,000 manufacturing jobs._

The coal pits of the Midlands are no more. The last deep coal mine in the UK
closed on 18 December 2015. Many heavy manufacturing jobs went down with them.

------
matthewcford
Post-Brexit this will be...

Britain “haemorrhaging” jobs

------
microcolonel
First they say that it's been happening for over a decade, but then they blame
Brexit at the end, this makes no sense.

~~~
24837
Could you point me towards that bit where they blame Brexit?

I can only find the part where it says

> “If this sad decline is not addressed then post-Brexit Britain and the next
> generation will surely pay the price.”

...which is a fair statement, I'd say.

