Here is the opinion of Augie Picado, country manager for UPS Mexico, in a recent TED speech.
We've heard a lot of rhetoric lately suggesting that countries like the US are losing valuable manufacturing jobs to lower-cost markets like China, Mexico and Vietnam, and that protectionism is the best way forward.
Now, the reality is output in the manufacturing sector in the US is actually growing, but we are losing jobs. We're losing lots of them. In fact, from 2000 to 2010, 5.7 million manufacturing jobs were lost. But they're not being lost for the reasons you might think. Mike Johnson in Toledo, Ohio didn't lose his jobs at the factory to Miguel Sanchez in Monterrey, Mexico. No. Mike lost his job to a machine. 87 percent of lost manufacturing jobs have been eliminated because we've made improvements in our own productivity through automation. So that means that one out of 10 lost manufacturing jobs was due to offshoring.
Thoughts monkeys? Do you agree?
Here is the link to the speech (give it a go if you have time): TED speech
Labor automation is quite real.
Automation has increased, but people have a hard time understanding a natural decline with a deluge.
Manufacturing will slowly reduce, but a large portion of the job loss is because of low wages and lax environmental enforcement. This is fact. There are hundreds of thousands of manufacturing jobs overseas (not servicing the local market) that are there because of people working for peanuts.
Globalism increases corporate profits and MAYBE reduces the prices of goods in a highly competitive market. It also replaces good paying manufacturing jobs with low paying service jobs.
The middle class has been hollowed out for corporate profits. Fact. Trump was a canary in the coal mine. What comes after him will be much worse and honestly, this country deserves whatever happens.
So, you disagree with Picado, who said that Mike lost his job to a machine rather than to a Mexican? Interesting.
What about the 87% of workers losing jobs to machines data? May it be misguided? (found this article about it: CNN Money)
Alessiod I don't know what the economic data points say but if it weren't for NAFTA and maybe if our government put in tariffs on goods being manufactured abroad and imported for American consumption I doubt Mike the Machinist would've lost his job.
In an ideal world NAFTA would've been negotiated with the American worker AND American manufacturers in mind and with a stronger immigration policy combined with a focus on individual responsibility (i.e. Mike The Machinist working for 40 years, investing his money, and putting his kids through school so they can become engineers, nurses, etc.) would probably have enabled Americans to be better off.
The other part of this debate/issue is you have countries such as Germany that have a very strong manufacturing presence and those jobs do pay well. Granted you could argue that strong unions probably are a catalyst for this but I feel having an educated workforce where your machinist can produce niche items and thinks more like an engineer than someone who graduated from Bumfuck Technical Institute would've been better.
We slowly shifted to a culture that thumbs its noises at the man or woman who chooses to work with his or her hands in favor of the over educated dipshit Excel jockey that brags about being able to create Pivot tables and VLOOKUP formulas but can't even replace the windshield wiper fluid in his or her car.
I don’t know that we’d agree on the solutions, but we agree on this. The American populace is tired of trading job security for the prospects of additional purchasing power. A comfortable way of life with gainful employment is a steep price to pay for $400 flat screen televisions.
I’ve made this point here multiple times and it gets dismissed or painted over: Corporate profits as a % of GDP has never been higher and wages as a % of GDP has never been lower. I cannot be convinced that the amount of social unrest we’re witnessing would be this great if the relationship was inverted or just more equitable. GDP growth is not the panacea everyone thinks it is when the majority of the population is locked out from sharing in the gains.
Playing devil's advocate here: have savings on consumer goods outpaced the lack of wage growth? If so, there is still a net benefit to society.
Automation is real. We can't or shouldn't try to control it because it offers a clear net benefit to society at large. In time, any jobs lost to automation will be displaced by other jobs to support automation. Humans have adapted for thousands of years and will continue to do so.
You can't blame corporations for taking advantage of the 'system' they are playing in -- their welfare depends on it and consequently so do their employees. Remember, the politicians that were elected to run the government are the ones who are responsible for the 'system' that has yielded record corporate profits. Similarly, and ironically, that same system is the one that has suffocated small to mid size businesses (who employ the lion's share of the middle class) with regulation. Remember, the small/mid businesses can't afford to navigate stacks of regulation the way large corporations can. Regulation is expensive.
I'm generally about as pro free trade as they come but recognize that globalization comes with it's own set of challenges (incongruent monetary policy between countries, geo-politics, etc.) that have gone overlooked for too long. It isn't as black and white as saying protectionism is best or free trade solves all issues. It's a balance of both. We need smart people who can make decisions that offer the greatest net benefit to the US -- everyone won't always win. For the last 50+ years politicians have been insulated from public opinion on many issues associated with trade and globalization, and, despite their good intentions (or not if you believe politicians are single-minded seekers of reelection [which most are]), most of the decisions they've made have been catastrophic to the middle class. While I don't agree with Trump on all issues, he's done a great job bringing issues regarding the economy and globalization to light.
In short, manufacturing jobs have declined because of automation, regulation and globalization, among other factors. How do we get them back? Automation probably isn't the answer because it offers great benefits to society. We can, however, pursue strategies that make the US relatively more competitive than other countries we trade with--namely, renegotiate bad trade deals and deregulate.
Regarding unionization, I implore you to to read "Why Wages Rise" by FA Harper. It's free online. You might learn a thing or two about the empty promises and disingenuous of unions. This is coming from a guy whose parents made their living as union workers.
Fight the machines!
I agree and it baffles me how little the topic of technology actually is discussed in politics. Technology is the biggest change driver in modern day society.
@iloveburritos" its because very few if any politicians have a reasonable, fiscally sound solution for solving the automation job loss crisis that is and will continue to occur. The only thing Liberals and hipsters seem to want is to tax the rich (Define rich or wealthy for me) and have grandiose programs such as Universal Basic Income and free healthcare.
Most politicians are clueless which isn't surprising since a majority are lawyers or just plain dumb (i.e. Maxine Waters)
Fight the machines!
Machines don't do drugs.
Automation is inevitable and manufacturing in highly advanced economies is essentially dead, except in a few countries (Germany being the most cited example). What we need to do is focus on increasing the QUALITY of service jobs and training our future work force to a higher technical standard. Additionally, the government needs to increase the standard of living for those that are left behind by this new economy by instituting things such as healthcare for all. Most of this isn't politically expedient so instead we'll have politicians rant about Mexico or limiting technology or something of that vein. This is appealing for their respective bases but it simply won't solve a thing.
Funny how you say manufacturing is dead, yet there seems to be a ton of these types of jobs in lower cost countries.
Reality is automation will gradually reduce manufacturing jobs, but low cost labor and regulations has drastically impacted the number of jobs available. The price of goods has not declined to compensate people for their lost wages.
I said manufacturing is ESSENTIALLY dead in HIGHLY ADVANCED economies, the bold parts of that statement are the key. Yes, in a world with no globalism thus no low cost labor, automation would've taken longer to take hold in the U.S. (idea being that transitioning to robots is still more expensive than the cost of the American in many industries which are the ones being outsourced to low cost of labor countries, although from studies that cost is declining at an ever-increasing rate, even China is facing the automation problem to a certain extent at this point) but we don't live in such a world. In addition to the price of goods going down, globalism has provided a platform for American companies to sell products & services world-wide, this has led to corporate growth which has increased the amount of "white-collar" jobs at the corporate level that require further education. Not to mention all the service jobs associated with serving industry (public accounting, banking, consulting etc.). In an economy where more and more of the population has such an education this point cannot be understated. Also, the amount of highly technical blue-collar jobs that are left unfilled in this country is a shame, many of these unfilled jobs exist (partly) as a result of globalism. We simply don't have the bandwidth right now to take advantage of these opportunities. My focus is on the future not trying to recapture the past that will never be recaptured.
With that in mind, the government needs to (in my opinion) do the following: 1.) increase standards for lesser-educated service workers 2.) decrease the cost of healthcare while providing EVERYONE a base level of healthcare 3.) increase funding and support for technical schools 4.) perform a complete and total re-examination of the student loan system with a focus on reducing the cost of a 4-year degree
If we filled the skilled manufacturing gap, provided a livable wage for working at McDonald's (at least at the manager/ experienced worker level not for the kid who will be there just for the summer before going to college), reduced the cost of college so people graduating and making 35k in a low COL area aren't left penniless after student debt, and provided a base level of healthcare for all I believe this would go much further, would be far more sustainable, and would be less economically harmful than slapping tariffs on shit and starting a war against technology.
Cos' of dem dahm ermigrahnts takin' our jobs!!!
Bobthebaker hit the nail on the head. Actually the number of manufacturing job openings are at the highest levels since the crisis. Fact is manufacturing jobs are coming back to this country, but technology and automation has caused these jobs to require higher levels of technical skills and America with the "everyone must go to a 4 year school" mentality faces a growing skills gap.
If you passed basic econ 101 you may remember the theory of comparative advantage in trade. The theory says that countries with an advantage in production of one good will trade with those who have an advantage in another good. By doing this you create efficiency between the economies. Dumbed this down but you get it.
America holds the comparative advantage in technical skill, education, and productivity driven by automation. China/less developed countries hold a comparative advantage in cheap bulk labor.
This has nothing to do with NAFTA or politics, basic Econ theory dictates how trade will flow. It is common business sense, why would you waste resources to produce something at a much higher cost when the can be allocated in a more efficient way. America with it's highly educated workforce is the leader in tech, finance, and most white collar professions for a reason. If we wasted resources on producing goods at a much higher cost than they could be produced elsewhere, we would hinder the growth we are seeing as leaders in other fields.
I enjoy many of @TNA"'s posts, but his ignorance of economics has made him predisposed to the disastrous ideology of economic nationalism, which is simply socialism by another name. I can't be bothered debating this with him anymore, but at least someone is still willing to argue using economics rather than their feelings. The only solution to the current situation, unless humans develop general AI (not happening anytime soon...), is free markets: Eliminate the minimum wage, repeal ACA and replace with NOTHING (free market healthcare), stop subsidising universities and bad educational choices by consumers, etc. But the Republicans proven to be completely and utterly useless, so I'm not holding my breath.
Isn't "economic nationalism", making the markets less regulated and more free, the exact opposite of socialism?
How in the world can reducing regulation and having freer markets... be socialism...?
Also you live in Australia right? (just curious)
This is just pure, unfettered ideology. Free-markets are not a panacea or a universal truth. Economics is a social science largely built upon a theoretical framework. There is nothing iron-clad about economic theory, nor is reality confined to its laws. You are presenting a normative argument with the conceit and arrogance of a positive argument, as if your opinion is based in some universal fact. Maybe they don’t teach normative vs positive economics in econ 101 anymore, or maybe you just learned all of your economic theory from Atlas Shrugged.
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