...finally gives some concrete answers to the question of what manufacturing workers should be retraining for, if they're expecting to work in a growing sector of the economy:
"Why do presidential candidates touting their concern for the economy pose with factory workers rather than with ballet troupes? After all, the U.S. now has more choreographers (16,340) than metal-casters (14,880), according to the Bureau of Labor Statistics. More people make their livings shuffling and dealing cards in casinos (82,960) than running lathes (65,840), and there are almost three times as many security guards (1,004,130) as machinists (385,690). Whereas 30 percent of Americans worked in manufacturing in 1950, fewer than 15 percent do now. The economy as politicians present it is a folkloric thing."
So, the answer is clear: It's time to learn to dance or shuffle. Practice those pirouettes, and always deal from the top of the deck, ya'll.
OTOH, those 15 percent are more likely to be good at what they do. I bet a lot of those mill operators in the '50s just knew how to work at the level of "turn the big handle over there until the number 55 is on top" where the ones that are left can not only build to print just fine, but hand you back a print with redlines to make the part better or less expensive to build.
There's another thing to consider, if I'm not mistaken: The federal agency that tracks these things classifies ones job as a "service job" if one isn't actually putting stuff together with ones own hands -- so if you hold a job as an engineer, draftsman, planner, or any other vital job that requires practical experience and knowledge but doesn't have you touching the machines, then you're not considered to be "manufacturing" anything.
That 15% of folks who are actually running the machines and bolting things together aren't standing out in the forest picking raw materials off the trees, and there aren't any shy woodland creatures carrying the finished product to market -- so "manufacturing" is bigger than the feds make out.
A manufacturing chicken/egg. Parallel pressure on manufacturing from competition and unions create an atmosphere for increased automation and other enhancement from technology. I can only draw from my own limited experience but I think it's indicative. I know I've had to replace over 80% of my workforce in the past 25 years with automation or outsourcing to suppliers with better technology. I imagine most companies have had to do the same. The price of automation keeps getting cheaper and cheaper and the cost of employees keeps getting higher and higher. And, the quality of employee has continually diminished. Nine of ten new applicants can't do simple math or read a tape measure. The union has pushed wages and benefits way beyond reasonable. It's amazing that I can easily justify a $40,000 budget for some little sub-system that will eliminate a number of production man-hours because the pay-back is so quick. The education system and disintegration of value systems is mostly to blame in my opinion and corrupt, self-serving unions that force companies into finding solutions that don't include union people. The unions have created their own demise like a snake eating itself. As a result, all those jobs just go away. Did you want fries with that?
Maybe. Maybe not. There are lots of former machine operators who are flipping burgers today, but the 15% you're talking about includes everyone.
It's just the opposite. They count everyone who works for a company that has a manufacturing or manufacturing service (machine shops, custom molders, etc.) NAICS code. They don't miss much. And that includes salesmen and office clerks who work for manufacturing companies.
Yeah, it includes the people who carry the finished product to market -- as long as they work for the company. Independent trucking firms aren't included. Neither are people out picking things off of trees.
The percentage of people who work in manufacturing is simply down, Tim. That should be no surprise. What surprised me is how many choreographers we have. I don't really see that much dancing going on.
Anything you can think of creates an atmosphere for increased automation. When I was involved in selling Wasino lathes to Mexico, they didn't want to hear about manual machines. CNC, with gantry-type autoloaders only.
It wouldn't matter if the cost of employees kept getting cheaper, either, as long as automation is getting cheaper faster. And it is.
Why are you amazed? That's where we've been heading for 100 years. It's just happening faster because of computers.
Pfffht. The jobs would go away anyway. That's just the advance of technology. Do you think that, if it wasn't for unions, we wouldn't have computers, and everything would just be great?
You're just looking for something or someone to blame, Tom. The course of technological advance wouldn't go backwards because employees got better.
============ The black box economy By Stephen Mihm January 27, 2008
Behind the recent bad news lurks a much deeper concern: The world economy is now being driven by a vast, secretive web of investments that might be out of anyone's control.
Should we be so confident this time? A handful of financial theorists and thinkers are now saying we shouldn't. The drumbeat of bad news over the past year, they say, is only a symptom of something new and unsettling - a deeper change in the financial system that may leave regulators, and even Congress, powerless when they try to wield their usual tools.
That something is the immense shadow economy of novel and poorly understood financial instruments created by hedge funds and investment banks over the past decade - a web of extraordinarily complex securities and wagers that has made the world's financial system so opaque and entangled that even many experts confess that they no longer understand how it works.
Unlike the building blocks of the conventional economy - factories and firms, widgets and workers, stocks and bonds - these new financial arrangements are difficult to value, much less analyze. The money caught up in this web is now many times larger than the world's gross domestic product, and much of it exists outside the purview of regulators.
By cleverly exploiting regulatory loopholes, investment banks created new types of high-risk investments that did not appear on their balance sheets. Safe from the prying eyes of regulators, they allowed banks to dodge the requirement that they keep a certain amount of money in reserve. These reserves are a crucial safety net, but also began to seem like a drag to financiers, money that was just sitting on the sidelines.
"Our modern shadow banking system," Gross writes, "craftily dodges the reserve requirements of traditional institutions and promotes a chain letter, pyramid scheme of leverage, based in many cases on no reserve cushion whatsoever."
But today, increasingly, a new generation of derivatives doesn't trade on markets at all. These so-called over-the-counter derivatives are highly customized agreements struck in private between two parties. No one else necessarily knows about such investments because they exist off the books, and don't show up in the reports or balance sheets of the parties who signed them.
As the derivatives business has grown more complex, it has also ballooned in scale. Broadly speaking, Das - author of a leading textbook on derivatives and complex securities - estimates that investors worldwide hold more than $500 trillion worth of derivatives. This number now dwarfs the global GDP, which tops out around $60 trillion.
These risks are magnified, as they were during the stock bubble of the 1920s, by the fact that many of these assets are owned by investors who borrowed money to make the investments in the first place. When a market shock like the subprime crisis hits, it can send tremors through the system with incredible speed.
There were no CNC machines in 1950. Technology allows the best person in the bunch to make a thousand machines copy him. you could cut a factory to two people. One person designing the program for the machine. And one person doing maintanance like changing broken bits or dealing to a machine when something out of the ordinary happens. More can be done with less people.
Case in point check out this link
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The trades come and go as technology moves on look at all of these old professions that are fused into "machinist" now just about every (BLANK)MAKER is now merely a new assignment of a machinist or tool maker. Some of those trades i didnt even know were separate trades, Like a Blockmaker who apparently had enough business to spend all day making pulley blocks.
How many Sawyers, Fullers, Coopers, and Smiths Still Saw, walk in rancid urine to prepare clothes, Make barrels, Or work Making tools form wrought iron.
The last names survive but the occupations havent. They've gone on to do other things in other sections of life. Part of all the industrial revolution and all that is you dont need as many people building or making things and more people in society can think as a profession. Even those doing trades have become better at thinking in the job. the totally menial screw the same bolt on the assembly line all day job is gone and hopefully for good.
Those types of Menial manufacturing jobs have changed industries, Now they are "Would you like fries with that?" Industry got organized and efficient and didnt need people to turn cranks or to fasten a bolt. And i dont think that a bad thing either, I'd rather my car be built by a few competent people controlling very repeatable machines. There is a reason you dont hear about Monday and Friday cars much anymore. I see trade deficits and jobs being sent away because its too expensive to have the workers to do it is bad. And there are a lot of factors there. But a loss of jobs purely to automation I dont see as nearly the same concern
Employees making 40 dollars an hour to do menial work like sweeping a floor i see as an even worse threat than someone automating jobs like that. It makes things look bad when you do nothing for megabucks when others are busting their ass for peanuts.
I know hospitals where the janitor makes more than the people in the lab processing and analyzing the test results used to generate a diagnosis. WHy go to school when you can make more money pushing a broom. That is the impression that the under-thinking over paid type jobs give me.
================ That's the way it was supposed to work (and did for a long time) and is the justification for the largely correct [in the context] of Schumpeter's, et al "creative destruction." click on
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However the operative word here is *CREATIVE* and NOT destruction.
What we are now witnessing and experiencing is simple demolition and liquidation (aka "clear cutting") with no attempt to introduce new products, industries, etc. We are now in the position of eating the last of our seed corn.
IMNSHO, one of the major contributing factors is the grossly excessive burden and overhead rates charged against manufacturing and indeed all productive activities. The most egregious example is the outrageous salaries and benefit packages, demanded and received, by the CEOs that are running our few remaining productive assets into the ground.
To start a law could be enacted prohibiting any company from paying any person a salary/compensation greater in total than that received by the President of the United States ===>unless that corporation is making a profit
While the idea has merit, who gets to decide what someone earns? If people (read company boards) are stupid enough to pay 400 million dollar separation packages, and the shareholders roll over, then what law has been broken?
Next there will be a Bureau of Equal Outcomes, run with all the understanding of the IRS, and the efficiency of the Post Office, determining what you or anyone can earn.
Take a look at "The Dance of Change" by Peter Senge. When all Wall Street can focus on is if the company makes ever more profit (which is not evil), unfortunately the corporate climate is to do just that. Groupthink is dangerous, wherever it occurs.
Ha! Wait until she's ready for college. A friend of mine put his daughter into a performing arts college in Boston and they had to do auditions at 13 schools in the process. He was driving around like a madman for months. It is *not* like applying for regular colleges.
On the other hand, it could be tougher. She might want to work in a foundry.
Yeah. Remember our discussion about deregulated financial markets and Ronnie Reagan? It's "collateral, collateral, who's got the collateral?" all over the world.
I think it was five or six years ago I said here that the derivatives in hedge funds are going to bite us in the ass some day, because nobody knew how they linked together, after they've been bundled and re-bundled a half-dozen times. I pointed out that we'd never find out how they're linked until they started to tank and everybody made margin calls and tried to collect on everyone else.
Too bad I didn't sell short on them as an investment.
I'd say that it's just the opposite. In the '50s machining was predominately manual. In the steel mill the roller was king, because it took so much skill. The surveyor's transit was the same technology as George Washington's. The bulldozer controls were so rough that a lot of experience was required. Even paper tape NC didn't come in until the '60s (I think).
Today, a "lathe operator" loads stock and programs into a CNC machine. Rolling mills don't take much more skill. Surveying is all lasers and computers. The new hydraulic controls allow most anyone to operate earthmoving equipment. A lot of this was driven by productivity, but it was also driven by a desire to get away from the need for the highly skilled labor that dominated '50s manufacturing.
Blame? Hell, I want to THANK someone! Until somewhat recently the technology payback was too far out. I'd love to see my business have nothing but an office and a shipping clerk. The other consideration is that US corporate taxes are
35%!!! Why do anything under those rates when it's much more attractive overseas? Patriotic duty? ...a good way to get crushed. Why should anybody invest in the US? There seems to be a move to punish anybody that could create jobs and wealth. I think it's a conspiracy concocted by the dairy industry to mandate that the Government has to give everybody a block of cheese every month.
Of course! And that's the reason manufacturing jobs are now paying $0.80/hour -- in China. All the people who were paying wages in the US never really wanted to, anyway, and now they've found a good reason not to. So what's your gripe? You got what you asked for, right?
When are you moving? d8-)
The Europeans are flipping over the low cost of manufacturing in the US and they're buying up all of the manufacturing here they can get their hands on. Why are you having a problem?
Just who is it you're competing with, anyway?
Tom, the US has the lowest taxes, or the second-lowest taxes overall, of any country in the OECD (developed countries). I think you've picked the wrong target.
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