How to Make an American Job Before It's Too Late

July 7, 2010 7:28 AM

How to Make an American Job Before It's Too Late. Andy Grove, from Intel, writes about America's lost manufacturing sector.

Friedman is wrong. [Shocking?!] Startups are a wonderful thing, but they cannot by themselves increase tech employment. Equally important is what comes after that mythical moment of creation in the garage, as technology goes from prototype to mass production. This is the phase where companies scale up. They work out design details, figure out how to make things affordably, build factories, and hire people by the thousands. Scaling is hard work but necessary to make innovation matter.

The scaling process is no longer happening in the U.S. And as long as that’s the case, plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs.

A pretty thoughtful essay on America and it's lost manufacturing sector. To quote the Wire, "We used to make shit in this country—build shit."

posted by chunking express (74 comments total)

I think the big problem here is that making shit, unless it is "art", is seen as the least prestigious occupation imaginable. Do you really believe recently graduates will flock to manufacturing jobs, even if their only other option is retail?

I believe most Americans believe the hierarchy of jobs to be:

making shit < fixing shit < designing shit < managing the people who make/fix/design shit < finance and capital allocation type jobs
posted by 2bucksplus at 7:39 AM on July 7, 2010 [6 favorites]

*bats eyelashes* Mr. Grove, you had me at "Friedman is wrong."
posted by adipocere at 7:42 AM on July 7, 2010 [16 favorites]

Do you really believe recently graduates will flock to manufacturing jobs, even if their only other option is retail?

A whole lot of unemployed quasi-recent-graduate friends of mine would love to have a manufacturing job. That is, if it offered good insurance, a functional union and paid at the same rates it did in those mythical postwar years when you could feed two kids, a wife and a dog on a manufacturer's wage. Fuck prestige, if I get hit by a car, they'll stitch me up just so I can starve to death paying the hospital bill.
posted by griphus at 7:46 AM on July 7, 2010 [10 favorites]

"Friedman is wrong." should be just one of those things everyone knows. Like... any action has an equal yet opposite reaction, matter cannot be created or destroyed, the Sun is a fission reactor, Friedman is Wrong.
posted by The Whelk at 7:50 AM on July 7, 2010 [8 favorites]

Plenty of people would rather have a manufacturing job than a retail job. If by "recent graduates" you mean graduates from college, maybe or maybe not (certainly plenty of GI-bill-era college graduates worked in manufacturing), but, as much as readers of the New York Times might be forgiven for thinking otherwise, college graduates are not the primary victims of the current unemployment crisis.
posted by enn at 7:52 AM on July 7, 2010 [2 favorites]

The Sun is a fusion reactor. And it does destroy matter, by converting it into energy.

You secretly like Friedman, don't you?
posted by adipocere at 7:53 AM on July 7, 2010 [10 favorites]

Economist Tyler Cowen posted a short list of points in response. Which I neither endorse completely nor reject completely.

For example: I would like him to state how Asians enter into his social welfare function.
posted by cobra libre at 7:53 AM on July 7, 2010 [1 favorite]

There is an article in the NYTimes that I was considering making part of an FPP, that gets at both the tough job market but also the sometimes unrealistic expectations and attitudes that people have.

The key quote for this discussion is this:

In better times, Scott’s father might have given his son work at Endeavor, but the father is laying off workers, and a job in manufacturing, in Scott’s eyes, would be a defeat.

“If you talk to 20 people,” Scott said, “you’ll find only one in manufacturing and everyone else in finance or something else.”

You can't have a vibrant manufacturing sector if people feel too entitled to take those jobs.
posted by Forktine at 7:53 AM on July 7, 2010 [2 favorites]

You can't have a vibrant manufacturing sector if people feel too entitled to take those jobs.

Well, that guy also felt too entitled to take a job as an insurance adjuster. I don't think he's really representative of anything except the Times's very narrow demographic.
posted by enn at 7:55 AM on July 7, 2010 [2 favorites]

I believe most Americans believe the hierarchy of jobs to be:

making shit <>

china < what's that? < hipsters < pointy-hairs < that's the stuff, baby

Do you really believe recently graduates will flock to manufacturing jobs, even if their only other option is retail?

Answer #1: That is, if it offered good insurance, a functional union and paid at the same rates...

Answer #2: If we were ALL college graduates, sure. Plus the quality of everything would go up. Today's least-well-suited white collar worker would be a very well educated blue collar worker, a net win for both "sides".
posted by DU at 7:55 AM on July 7, 2010

I think I might be a least-well-suited HTML worker.
posted by DU at 7:56 AM on July 7, 2010 [1 favorite]

What are Tom Friedman's qualifications for having an opinion that people should give a shit about? Has he ever done anything important or worthwhile? I'm genuinely curious why people give a shit what he says.
posted by empath at 7:57 AM on July 7, 2010

2bucksplus, there are lots of non-assembly line jobs that also disappear when the manufacturing base moves elsewhere. Also, you are probably right that most undergraduates aren't going to be dying to work on an assembly line. It's probably not intellectually challenging work. The thing is, not everyone goes to University. A lot of Western countries don't seem to worry about the people that aren't going to end up as "knowledge workers". In your hierarchy of jobs, you forgot to list shitty retail jobs and unemployment.
posted by chunking express at 7:57 AM on July 7, 2010 [1 favorite]

People don't feel too entitled to take these jobs. There are no manufacturing jobs is the thing! 40-year-olds don't want to work at McDonald's but what else is there?

As for spoiled 24-year-old graduates like the one in the NY Times piece, who cares? They aren't everyone. Not everyone goes to college. Not everyone can afford to lay about the parents' homestead declining reasonable offers. There are millions of people who are working shit jobs right now who would give anything for a solid mfg. job.
posted by Mister_A at 7:58 AM on July 7, 2010 [1 favorite]

Man I heard these same arguments--many books were written about it--thirty years ago when the Japanese started taking over the manufacturing of consumer goods.

Andy Grove said:
My point isn’t that Intel was brilliant. The company was founded at a time when it was easier to scale domestically. For one thing, China wasn’t yet open for business. More importantly, the U.S. hadn’t yet forgotten that scaling was crucial to its economic future.

No, more importantly China wasn't yet open for business. Companies know the advantage of scaling, but they also know the advantage--the requirement--of selling their product for less than their competitors. It doesn't do much good to be altruistic about your country's economic future if you go out of business.

Also, people forget that President Reagan changed the tax rules to allow companies to stop paying taxes when they move their operations overseas--basically paying companies to move their operations offshore.
posted by eye of newt at 8:02 AM on July 7, 2010 [19 favorites]

That's the thing about unemployment and retail jobs: You are always free to say things like "yeah I'm an unemployed hedgefund manager" or "I'm just working at the Auntie Anne's until my band takes off". And people will believe you, especially if you are young! You are still part of your class, you are just waiting for your ship to come in. There's a certain hopefulness there.

When you are on the assembly line all the sudden you are "blue collar". You have jumped to another class, and in the wrong direction. The people who still talk to you will ask you (essentially) why you jumped.

Also, of course I am talking about coastal people who go to college (it's all I know, man)
posted by 2bucksplus at 8:06 AM on July 7, 2010

Do you really believe recently graduates will flock to manufacturing jobs, even if their only other option is retail?

I don't care what recent grads think...fuck 'em, they can be mgmt and die of an early heart attack. I'm 40...I've done enough white collar shit. I will gladly quit my white collar job and take up a factory gig in a heartbeat if:

a) they will have me
b) they will provide the same benefits in terms of medical I get as a white collar dude

That's all I require. Let's make it happen.
posted by spicynuts at 8:17 AM on July 7, 2010 [2 favorites]

Do you really believe recently graduates will flock to manufacturing jobs, even if their only other option is retail?

Even if they don't, the 63%+ of the country that doesn't have a college degree would more than love to have them. Most people never go to college. Manufacturing used to be what they could do for a living. Now there really isn't much of anything.
posted by valkyryn at 8:26 AM on July 7, 2010 [1 favorite]

What are Tom Friedman's qualifications for having an opinion that people should give a shit about?

Maybe they're confusing him with that other Friedman, who, agree with him or not, was kind of a big deal.
posted by valkyryn at 8:28 AM on July 7, 2010

The scaling process is no longer happening in the U.S. And as long as that’s the case, plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs.

I would contend that the reason most companies that make the transition from startup to full-fledged Co., Inc. rely so much on foreign production is precisely because capital isn't being plowed into young companies. Scaling-up isn't just hard, it's expensive. Take Intel, for instance…

Bob Noyce typed himself a one page idea of what he wanted to do with his new company, and that was enough to convince San Francisco venture capitalist Art Rock to back Noyce's and Moore's new venture. Rock raised $2.5 million dollars in less than 2 days.

$2.5 million in 1968 is nearly $15.5 million in today's money. For a one-page business plan written by a couple of engineers that just quit their jobs. Think that would happen today?
posted by Civil_Disobedient at 8:39 AM on July 7, 2010 [3 favorites]

Just because people have been lamenting the loss of manufacturing and resource development jobs (and industries) in the industrialized world for decades, doesn't mean that it's not a real problem.

I wrote - and deleted before I posted, in another thread - a longish post about how we cannot have a service sector economy. You simply can't survive selling each other services, so we can buy goods manufactured elsewhere, no matter how cheap.

In the "industrialized world" we are now living off the capital gained by previous generations, and it's not sustainable. We are giving away this capital in trade imbalances. The problem is that international commodities, such as oil, that we have had relatively cheaply, will become more expensive as our purchasing power drops.

The writing was on the wall in the 1970's. People were rightly concerned about Japan then, but it's not specifically about Japan, or even China now. It could be any country where manufacturing costs are lower.

I noticed in the article that one of the key things he identified as a cost issue was health care costs. In the U.S. we pay a much greater share of GDP for health care than where they have universal, government run health care. Or anywhere, for that matter.

(note about the link: that website is not where i found out about the cost, it's just the first one I found after Googling the issue, so I could link to it for you. Website may have a slanted agenda, I don't know, haven't read through it.)
posted by Xoebe at 8:40 AM on July 7, 2010 [4 favorites]

So I'm not an econometrician or whatever but I read Marginal Revolution and Economix and Paul Krugman and all that jazz but there's something that I haven't really seen an answer to. Given that we now live in a world with free(ish) trade and largely unfettered flow of knowledge and technology, won't American "making stuff" job wages more or less continue to fall (or not exist) until there is some sort of equilibrium between what it costs to make something in the US and what it costs to make it in China, India, Angola, and pretty much anywhere else on the planet? Americans are not fundamentally better at making stuff and inventing stuff than anyone else, they just had a bit of a head start in terms of tooling up and getting educated and all that.

What is unique about the US or 1st world nations in general, from an economics standpoint, that would lead someone to expect them to maintain high wages while the rest of the world plays catchup? Obviously it's not a zero sum game but non-expert me can't see how there can't be some serious pain in the future for American / 1st world workers.
posted by ghharr at 8:41 AM on July 7, 2010 [1 favorite]

ghharr: unless we become more economically protectionist, which most everyone argues is a bad idea.
posted by saulgoodman at 8:44 AM on July 7, 2010

Right, though that seems to be what Grove is suggesting: "We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars -- fight to win.) "
posted by ghharr at 8:49 AM on July 7, 2010

Obviously it's not a zero sum game but non-expert me can't see how there can't be some serious pain in the future for American / 1st world workers.

The pie does not get divided only between domestic and foreign workers. It also gets divided between wages and profits. The traditional goal of the labor movement in its heyday was to "take wages out of competition" — strong, enforced labor standards for imported goods and services would raise wages in the countries to which jobs are outsourced and protect jobs in the US.
posted by enn at 8:50 AM on July 7, 2010 [6 favorites]

I think the only thing that's going to tip production back towards the US is a sharp rise in transportation costs. I can't see anyone of any moment in the legislative or executive branches calling for protectionist taxation, or (worse still!) enforceable international labor rules.
posted by Mister_A at 9:00 AM on July 7, 2010

America and it's lost manufacturing sector.

Sigh. The US manufacturing sector isn't lost. At least until the recent economic crash, manufacturing output was at its historical peak.

What's lost is manufacturing employment. In the US (and Canada), workers get replaced with automation; just watch the eerily hypnotic "How It's Made" to see the massive amount of automation that gets used in North American manufacturing. In China, slaves are cheaper than robots, so they use them until they wear out, then get new ones.

Watching Andrew Grove -- whose entire business is founded around outsourcing skilled manufacturing and clerical jobs to silicon chips -- bitching about outsourcing and job loss is particularly sickening.
posted by ROU_Xenophobe at 9:01 AM on July 7, 2010 [8 favorites]

One alternative, not exactly a counterpoint but something else to think about, is how to make service-sector jobs better. Notwithstanding the prestige issues, the fact is manufacturing jobs are typically a lot better, in terms of pay and benefits, than the service-sector jobs that those same workers might otherwise be qualified for. Why? Manufacturing wasn't always so (relatively) cushy. The textile mills in the US and England used to be sweatshops, just like the third-world ones are today.

Service sector jobs are already 45+% of the workforce in the US. Partially due to the factors ghharr pointed out, the manufacturing share is not likely to increase long-term. Through some combination of unionization and better regulation, the nature of those jobs could be improved. Difficult as this may be, it seems at least as easy as trying to cram everyone back into a declining industry known for its "good" jobs.
posted by rkent at 9:06 AM on July 7, 2010

When you are on the assembly line all the sudden you are "blue collar". You have jumped to another class, and in the wrong direction. The people who still talk to you will ask you (essentially) why you jumped.

Purely anecdotal but, among my peer group (Mid 20s-Upper 30s) in Portland, OR I'm finding that people who move into blue collar trade jobs are envied and revered. I guess the alternative is being an office administrative assistant or working at Whole Foods.
posted by wcfields at 9:08 AM on July 7, 2010 [1 favorite]

ghharr: unless we become more economically protectionist, which most everyone argues is a bad idea.

We shouldn't argue that anymore. In the age of global warming and heavy metal ocean toxicity, we should tariff the hell out of goods that come from countries with poor environmental controls on manufacturing.
posted by BrotherCaine at 9:09 AM on July 7, 2010 [6 favorites]

Watching Andrew Grove -- whose entire business is founded around outsourcing skilled manufacturing and clerical jobs to silicon chips -- bitching about outsourcing and job loss is particularly sickening.

Yes, it's pretty disingenuous of him to talk about outsourcing without talking about automation. But automation seems even harder to prevent than outsourcing. Maybe technology has just made us too damn productive to work eight hours and it's time for the four-hour day — to use another Gompers line, "So long as there is one man who seeks employment and cannot obtain it, the hours of labor are too long."
posted by enn at 9:11 AM on July 7, 2010 [2 favorites]

$2.5 million in 1968 is nearly $15.5 million in today's money. For a one-page business plan written by a couple of engineers that just quit their jobs. Think that would happen today?

Civil_Disobedient, I think today that one-page business plan would need to be a 10-slide powerpoint business model (using no less than 30-point type!) to raise the money.

You see, things are much more scientific these days.
posted by babar at 9:15 AM on July 7, 2010

The service sector needs to unionize.
posted by chunking express at 9:15 AM on July 7, 2010 [1 favorite]

> Watching Andrew Grove -- whose entire business is founded around outsourcing skilled manufacturing and clerical jobs to silicon chips -- bitching about outsourcing and job loss is particularly sickening.

One may view him as hypocritical, but I appreciate the fact that he's pushing the issue.

More to the point, the more mature an industry, the more streamlined (and, ultimately, automated) it will become. As Grove is hinting, it's the nascent high-tech industries, like alternative power, where there is still obvious opportunity for high-headcount, labor-intensive work.

In any case, it's fairly clear to everyone that our political system is part and parcel of this problem: literally, those who profit the most from the current arrangement, are those who fund the political leadership.
posted by darth_tedious at 9:23 AM on July 7, 2010

When you are on the assembly line all the sudden you are "blue collar". You have jumped to another class, and in the wrong direction. The people who still talk to you will ask you (essentially) why you jumped.

Yeah..this is b.s. The people who still talk to me won't be the people who care about what 'class' i'm in, they'll be the people who actually care about me. Also, the new people I get to talk to in my new 'class"?? We'll be laughing at the assholes who are so scared of going 'in the wrong direction' because of what the neighbors might think of their new collars.
posted by spicynuts at 9:26 AM on July 7, 2010 [3 favorites]

To quote the Wire, "We used to make shit in this country—build shit."
that could also serve as an Andy Grove quote too.
posted by Dr. Twist at 9:27 AM on July 7, 2010

Americans are not fundamentally better at making stuff and inventing stuff than anyone else, they just had a bit of a head start in terms of tooling up and getting educated and all that.

You're absolutely right, which is a big part of why we really needed to start working on this 20 or 30 years ago, when we still had a big head start. Now we have less of one, so it's going to be a lot harder.

If we could go back to, say, 1975, I think it's possible that we could have preserved some parts of the manufacturing sector by taxing imports from countries with weak labor laws, essentially preventing them from engaging in a 'race to the bottom'. Because the U.S. was th dominant consumer market, exporting countries like Japan and China would have just had to shut up and deal.

Classical economists are correct in saying that even such mild protectionism does create market inefficiencies -- a plan like that would have prevented many of the cheap imported goods that Americans got used to during the 70s-90s, and increased apparent buying power. But it would have preserved skilled jobs, which doesn't strike me as a bad tradeoff. Instead we took the opposite tack, and sacrificed manufacturing jobs in order to get cheap goods (high buying power, higher apparent standards of living), which we bought with debt.

But now we're in a bit of a hole; it's a lot tougher to protect those jobs now that they're gone, and it's not clear that the U.S. is enough of a dominant market to dictate labor standards to the rest of the world, as we might have been able to do at various points in the past. Instead of us being able to threaten China with losing access to the U.S. market if they didn't play ball, China can now threaten the U.S. (or may soon be able to) with loss of access to the Chinese market. The opportunity to bring the rest of the world's workers up to par with the U.S., I think, has been lost.

Instead, if workers in the U.S. want to retain anything like the quality of life (insofar as purchasing power = quality of life), we're going to have to refocus on exports while simultaneously competing with low-cost labor. In large part, I suspect that wages in the U.S. are going to deflate down to something like parity -- given the number of Chinese factory workers versus American ones, it seems highly unlikely that they'll move up; the "mass" on their end is just a lot larger.

However, if the U.S. were to remain a leader in automation and mechanization, it's possible that a single U.S. manufacturing worker might be able to achieve the same productivity as multiple Chinese workers in a lower-tech factory, allowing a higher wage. But this of course requires that the U.S. continually develop labor-saving processes faster than they can be exported and implemented in low-wage countries ... which strikes me as yet another race to the bottom; in order to keep ourselves from being replaced by people in China, we have to devise ways to replace ourselves with machines. Either way, we lose.

I don't see a political outcome that doesn't involve a certain stiff dose of protectionism, and I think the future may hold a reconsideration on the part of many Americans of the received wisdom that 'protectionism=bad'. (Protectionism is always bad when it's somebody else's job or industry that's getting protected, because then it's just inefficiency. But when it's your job or your industry...)

Really, the problem boils down to American Exceptionalism. The U.S. should have realized that its headstart on the rest of the world after WWII was an anomaly, and could have taken steps to entrench and maintain that advantage for multiple generations if it chose. Instead, for better or worse -- better for the rest of the world, worse for workers in the U.S. -- we chose instead to regard that as simple proof of our inherent God-given awesomeness, and not a one-time historical dividend that needed to be protected. And now, having frittered it away in the space of a few decades, we're going to have to start slugging it out in direct, brutal competition with the rest of the world. It is not going to be pretty.
posted by Kadin2048 at 9:34 AM on July 7, 2010 [23 favorites]

we should tariff the hell out of goods that come from countries with poor environmental controls on manufacturing.

Of course from the European perspective countries with poor environmental and labour protections include the US, so be careful what you wish for.

When you are on the assembly line all the sudden you are "blue collar". You have jumped to another class, and in the wrong direction. The people who still talk to you will ask you (essentially) why you jumped.

Yeah..this is b.s. The people who still talk to me won't be the people who care about what 'class' i'm in, they'll be the people who actually care about me. Also, the new people I get to talk to in my new 'class"?? We'll be laughing at the assholes who are so scared of going 'in the wrong direction' because of what the neighbors might think of their new collars.

Do you mean that the behaviour is ridiculous or the comment? I actually think it's pretty much true in some sense for some people.

I think it results from the very weird feelings people have about tertiary education in the US. I've heard people decry the assumption by many undergrads that their degree is a vocational ticket in one breath, and then get angry that they can't get a job "fitting" their education in the next.
posted by atrazine at 9:38 AM on July 7, 2010

"Distressed municipality" of Braddock, PA — a town strugging due to the loss of manufacturing jobs — is being used by Levi's to sell jeans made offshore. The tagline of this marketing campaign: "We are all workers." No shame at all, these guys.
posted by enn at 9:41 AM on July 7, 2010

Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars -- fight to win.)

Wow, you mean competition? That's for the plebs, some would utter!
But wait there's more

Most Americans probably aren’t aware that there was a time in this country when tanks and cavalry were massed on Pennsylvania Avenue to chase away the unemployed.


It was 1932; thousands of jobless veterans were demonstrating outside the White House. Soldiers with fixed bayonets and live ammunition moved in on them, and herded them away from the White House. In America! Unemployment is corrosive. If what I’m suggesting sounds protectionist, so be it.

Christ. Free market apologists will not like this, expecially the ones who are getting a 15000% return from labor in China.
posted by elpapacito at 9:44 AM on July 7, 2010

Americans are not fundamentally better at making stuff and inventing stuff than anyone else, they just had a bit of a head start in terms of tooling up and getting educated and all that.

Well, we also benefit from laws and police and fire protection and roads and democracy and the like. So, not fundamentally better than Sweden or Great Britain, for instance, but certainly better than, say, Burma.
posted by Civil_Disobedient at 9:56 AM on July 7, 2010

Yes, it's pretty disingenuous of him to talk about outsourcing without talking about automation. But automation seems even harder to prevent than outsourcing.

To be clear, I don't think automation is a problem. Automation of different sorts is more or less why our standard of living is higher than it was in 1600. Nor do I think outsourcing is a problem except insofar as it involves unambiguously terrible things like slave labor or de facto slave labor and widespread environmental damage; even foreigners are still people and deserve a life better than being a subsistence-farming peasant.
posted by ROU_Xenophobe at 9:57 AM on July 7, 2010

So it goes.
posted by tapesonthefloor at 9:57 AM on July 7, 2010

Of course from the European perspective countries with poor environmental and labour protections include the US, so be careful what you wish for.

That's not the part I'd worry about. Tariffs on Chinese goods would probably create a disincentive for them to buy up all our treasury bonds.
posted by BrotherCaine at 9:59 AM on July 7, 2010 [1 favorite]

To be clear, I don't think automation is a problem.

I don't think so either; but the job loss is.
posted by enn at 10:04 AM on July 7, 2010

Automation is job loss. You're taking a job that either exists or would exist, and giving it to a machine.

The response should not be "make sure that everyone keeps the job that they have now." That way madness lies, and it's certainly not something one could stand for on any kind of reasonable principle. Instead, it's to just make sure that the people losing their jobs to automation (or outsourcing) are retrained and/or cared for.
posted by ROU_Xenophobe at 10:17 AM on July 7, 2010 [1 favorite]

In large part, I suspect that wages in the U.S. are going to deflate down to something like parity...

That would be fine, so long as the cost of living also deflates down to parity. Somehow, though, I can't see that happening here.
posted by Thorzdad at 10:19 AM on July 7, 2010

I meant net job loss, not individual jobs disappearing. Retraining is not really working so well.
posted by enn at 10:22 AM on July 7, 2010

I meant net job loss, not individual jobs disappearing.

Yes, I know. That is still what automation inherently means in any timeframe except the very long term.

Likewise, I know that retraining does not work well. That doesn't mean that it couldn't work well, but even if it couldn't the world would still be better off killing their jobs and paying them some reasonable, liveable amount to just do nothing than to keep them in their job.
posted by ROU_Xenophobe at 10:27 AM on July 7, 2010

Do you mean that the behaviour is ridiculous or the comment? I actually think it's pretty much true in some sense for some people.

I meant the behavior is ridiculous and therefore the comment is a weak argument.
posted by spicynuts at 10:36 AM on July 7, 2010

The jobs won't come back. I don't know of any country that lost the manufacturing sector and got it back.

You could try to increase the sales tax and finance social services and health care out of the sales tax. This would make US labour cheaper and Chinese products more expensive since costs like health care go into the product, no matter where it is produced, in the US or China.

BTW, I have a PhD in science and job offers in the US are and were elusive. Now it looks like I have two offers in China (high tech , VC).
posted by yoyo_nyc at 10:38 AM on July 7, 2010

ROU_Xenophobe, automation doesn't mean net job loss if the remaining work is spread more thinly by means of shorter workings hours as I mentioned above, though it does mean net work loss.
posted by enn at 10:42 AM on July 7, 2010

empath: I'm genuinely curious why people give a shit what he says.

Because by knowing what Friedman says and solving for the opposite, I can make an educated guess on what my opinion will be, even on subjects that I know little about.

(exaggeration, but not by much)
posted by MCMikeNamara at 10:55 AM on July 7, 2010

automation doesn't mean net job loss if the remaining work is spread more thinly by means of shorter workings hours as I mentioned above, though it does mean net work loss

Work loss is the loss of a fractional job; that is, job loss.
posted by ROU_Xenophobe at 11:16 AM on July 7, 2010

Sorry; that came off stroppy.

Yeah, but shorter hours is still some combination of (fractional) job loss and just paying people to do nothing.
posted by ROU_Xenophobe at 11:23 AM on July 7, 2010

Aren't all Intel chips stamped "Made in Malaysia" or "Made in Costa Rica"
posted by ijoyner at 11:25 AM on July 7, 2010

Like it or not, there is too much competition in the manufacturing sector. Do you really want to work for a dollar a day? Today the competition comes from China. Tomorrow it will probably come from Africa.

North America's future lies with the Design or creative economy. Wouldn't you rather your children manufacture ideas?
posted by KokuRyu at 12:11 PM on July 7, 2010

Aren't all Intel chips stamped "Made in Malaysia" or "Made in Costa Rica"

That's where they cut and package the completed wafers, not where they turn raw silicon into working chips.
posted by ROU_Xenophobe at 12:35 PM on July 7, 2010

I don't think those jobs are coming back either. It's a shame.

You don't just lose the jobs that the factory directly created, but you also lose the indirect job creation of having a town where people spend the disposable income that having a good job creates -- people going out to eat, and shop, and... I don't know, buy piano or dance lessons for their children. Once the town starts to die it usually tries to reinvent itself as some sort of tourist destination, but there's only so many times that antique stores, boutiques, and other misguided attempts to latch onto a shrinking tourst market can fail in the same retail space before it becomes a perpetually empty lot. These lots are then bought up by stuff that's cheap and guaranteed -- dry cleaners, fast food franchises, tax places. Pretty soon you have a lifeless strip-mall hell with no jobs and no prospects.

People might move in to commute to a job some place else, and this used to be the appeal of the small-town-turned-suburb, especially when their tax bases were high and public schools saw the benefit from that. But, if your town starts dying, and people move out, there goes your tax base as well. At a certain point you're left with a place where the only people who are there are the ones who can't afford to leave and a few elderly holders-on. These plaes aren't well suited to the poor. There's no public transportation, they're exceedingly conservative and vote against social services or defund them, and the places that sell necessities can often mark them up because they're the only game for miles.

This sort of life cycle, especially in the mid-west, is chronicled in the book Methland, which is a little like The Wire or The Corner for heartland, white america. Someone said it in the Glenn Beck thread earlier, but what we have is a surplus population.

I'm not sure what the future of this America is.

Like it or not, there is too much competition in the manufacturing sector. Do you really want to work for a dollar a day? Today the competition comes from China. Tomorrow it will probably come from Africa.

North America's future lies with the Design or creative economy. Wouldn't you rather your children manufacture ideas?

I've read A Whole New Mind and I'm pretty sure that's not it. There're only so many designers and writers that an economy can support.
posted by codacorolla at 12:47 PM on July 7, 2010 [2 favorites]

Also, how does being a creative worker exempt you from competing with workers in other countries?
posted by ghharr at 1:40 PM on July 7, 2010

Aren't all Intel chips stamped "Made in Malaysia" or "Made in Costa Rica"
No, the actual fabs are in the US, Ireland and Israel link

Watching Andrew Grove -- whose entire business is founded around outsourcing skilled manufacturing and clerical jobs to silicon chips
That's not quite right....there's automation in Intel's fabs but also all those men and women in the bunny suits you see in Intel ads. I don't know the numbers but from the parking lots there's a lot.

The point being that Intel is one of the companies who does a big percentage of it's manufacturing in the US.
posted by Spumante at 1:58 PM on July 7, 2010

ghharr: Also, how does being a creative worker exempt you from competing with workers in other countries?

It doesn't. But it is something that we have (at least for the time being) an opportunity to actually compete and win on. For all of the hand-wringing that you hear about the American educational system doing horribly in comparison to other cultures, the things that other countries (esp. East Asia & India) are very good at are rote memorization/factually learning.

At least in the deeper-pocketed districts/areas of the US, there is quite a lot of right-brained education and very high-level thinking going on.

That's how the argument goes, at least.

I would probably be more inclined to argue that designing and communicating things or ideas is great for only a small part of the economy, so the lucky few (MeFi types, mostly) are really going to do gangbusters over the next several decades, while the majority (including but not limited to almost the entire 63% of the population without degrees) will be screwed over.

In defense of the creative economy/right-brained thinking advocates, I don't think that it's all a coincidence that a company like Apple comes from the US. Even people who don't like Apple products should be willing to admit that the company's biggest strength is its devotion to creativity/design/aesthetics/user experience. (Somebody point out where I'm wrong here, but) I doubt that there are many other cultures on Earth with the scientific, industrial, educational, and cultural je ne sais quoi that could produce something like that.
posted by graphnerd at 2:16 PM on July 7, 2010

That's not quite right....there's automation in Intel's fabs but also all those men and women in the bunny suits you see in Intel ads.

No, what I meant was that Andrew Grove is in the computer chip business, and what do computer chips do?

Computer chips absolutely crash the demand for skilled and semiskilled clerical workers. Filing departments? Dead. Typing pools? Dead. Computers in the original sense? Dead. Whole rafts of jobs have been primarily relegated to software, with what little remains stuck onto the responsibilities of the people the clerical staff had assisted (ie, low- and mid-level managerial sorts who do their own typing now).

And of course computer chips run robots that replace humans in manufacturing.

And so, Grove's line of trade is outsourcing human jobs to silicon. (mind, I think this is great in the long run)
posted by ROU_Xenophobe at 4:11 PM on July 7, 2010

I'm posting this because I don't think that most people on metafilter know anything about factory work.

For the summer, I am working in a factory. In this factory we make a product many of you may have heard of and, at least, some of you have consumed. The company that owns the factory is a household name, and you undoubtedly have some of their products in your refrigerator right now.

There is no union, and I technically work for a temporary staffing company, as do the majority of the employees there.

The factory employs around 350 people on the factory floor across the 2 shifts. Some of the assembly lines run 2 shifts for 12 hours a day, 6 days a week. It's common for everyone in the factory to work six days a week because, despite a 13% unemployment rate in the state I live in, the staffing company is having a hard time retaining and hiring employees.

Through the idiocy of the HR department, today I got to see how much everyone in the factory makes per hour. Once people are hired into the company from the staffing company, most make around $13/hr. They make this amount of money by counting out five, or six units, and placing them in a well that then feeds into a machine, that then places the units into a box for two to three hours straight. After those two to three hours, they assembly boxes for two to three hours, and after that, they may then take units of of boxes to place them into different boxes. If I actually paid attention to what I was doing, it would be the most mind numbing thing I have ever done.

However, the work requires almost no attention. For ten to twelve hours a day, I enter an anti-zen-like state where my actions are separated from my thoughts. I can think about anything I want to, which is far better than some of the office jobs I've had, and miles better than working in a call center. In addition, I also don't have to make any use of the social skills I have if I don't want to. On some days, I have shown up and literally not said a single word through the entire day. This may sound awful, but after doing a few jobs that require fake-nice bullshit for a few hours a day, every day, it's nice to not have to do it again. In fact, while on the factory floor, the level of bullshit is almost nonexistent.

People may malign factory work, but at the end of the day, I haven't had to take any shit from an asinine customer with a smile on my face, participate in a Wal-Mart cheer, or consider the amount of flair on my uniform. I've made a product that people enjoy and brought money into my community, rather than drained money from it. It isn't something I would want to make a career out of, and the management does treat its employees in the same manner that it treats the machines on the floor, but the company doesn't want your heart or your mind, just your body for 12 hours a day.
posted by 517 at 4:39 PM on July 7, 2010 [7 favorites]

North America's future lies with the Design or creative economy. Wouldn't you rather your children manufacture ideas?

This is discussed, somewhat, in the article. It's very hard to "manufacture ideas" if you're totally disconnected from the manufacturing sector that has to actually implement those ideas. There's only a very small total market for people doing abstract design work.

Put bluntly, just about everyone would rather their children pursue nice, clean, stable, challenging, intellectual "idea" jobs. It's in no way clear to me that there are enough of those jobs for very many people on the planet, and even less clear to me how or why the majority of them would go to Americans.

Apple -- in it's modern iPod-and-iPhone incarnation -- is basically the brainchild of one guy with a particularly good grasp of what (still predominantly American) consumers want in their personal electronics. I'm not sure that it's something that you can exactly replicate. The next Steve Jobs might well be Chinese or Indian, and succeed based on his or her understanding of those markets as they become dominant.

Also, I'm not sure that Apple is really that good an example because I'm fairly confident that if you total up all their off-the-books Foxconn employees who actually do the work of building their products, plus all the suppliers who produce those parts as you go down the supply chain, it probably is responsible for more job-creation in Asia than in the U.S. doing design work. (According to WP, Apple only has 35,000 employees; Foxconn has a total of nearly half a million. Not sure how many of those are making Apple gear but I bet it's a substantial fraction, so it doesn't seem like a farfetched claim.)

There are a lot of manufacturing jobs for each design job, and there are a lot of people in the U.S.
posted by Kadin2048 at 6:23 PM on July 7, 2010 [1 favorite]

Like 517 says, manufacturing done in first world countries isn't too bad, with good safety standards and worker protection. I have no doubt manufacturing in third world countries can be far more unpleasant and dangerous, but also much cheaper. I once put in fuel lines and wheel brackets onto the underbodies of cars: one car every 35 seconds, all day. I got pretty good at recognizing the model types from the underbodies, and a sore neck.

I'd still go for a service / white collar job - because of the risk of personal injury in manufacturing. You are pretty much a few centimeters from permanently maiming your finger everytime you use the airtool on a wheel bracket, and if you step in the path of one of the many forklifts buzzing around the place it's pretty much over for you. Little known fact: forklifts can't stop in a hurry - if they did, the one tonne or so of parts it was carrying would just fall off the front. Onto you.

I know humans are bad at estimating risks and I was (maybe) statistically more likely to be injured in a car accident than at work, but maybe I'm a wuss and didn't like the idea that I could potentially maim a body part or damage my hearing (yeah we're supposed to wear earplugs) or my lungs (the fumes we smell from being within a few hunded meters from the paint factory are supposed to be safe?).
posted by xdvesper at 7:06 PM on July 7, 2010

I'd still go for a service / white collar job - because of the risk of personal injury in manufacturing.

Every few months I have to spend a few hours in a small manufacturing facility. Very high-end, and with a great reputation in terms of working environment -- almost no turnover, good benefits, good pay, stability, enormous attention to ergonomics, flat hierarchy, all those kinds of things.

And even so, the workers there have really had the life worked out of them by the time they hit 60 and get their (very nice, guaranteed) pension. Just when many academics and white collar workers are hitting their stride, ready for an active retirement or a long continued career, the manufacturing workers I have met are nursing bum knees, backs, elbows, necks, etc.

That kind of work is genuinely tough on the body in ideal conditions, and in a less scrupulous facility -- without good lighting, safety training, and empowered workers who can stop the line anytime they see an issue -- you layer on the high risk of accidents that xdvesper talks about.

I think it has a lot to do with the time pressures of manufacturing work, as compared to the control over your own time you can have as an independent artisan, rather than something inherent to physical work per se.
posted by Forktine at 7:33 PM on July 7, 2010 [1 favorite]

I think the bit that's being largely overlooked in this discussion, is that if you (meaning us, the USA) cede the 'scaling' work (e.g. large-scale manufacturing and development of same) for an early generation of a new technology or product, you prevent yourselves from developing the expertise, the talent pool, the ecosystem generally in which later generations of the same technology might flourish. Not only do the manufacturing jobs go away, but the ability to engineer the processes by which those jobs are created will attrition.

Maybe you personally would rather sell your screenplay than work on the floor of an Intel fab, but it's hard to argue that the U.S. would be better off if everyone were honing their dialogue while all the Intel fabs when to Singapore and Shanghai. Society as a whole benefits where even the less-educated have profitable, meaningful work to do and a decent living wage (and hope for better for their children). 'American Dream' - hello? Sound familiar?

Ohwp! Quote coming up -

"I must study politics and war that my sons may have liberty to study mathematics and philosophy. My sons ought to study mathematics and philosophy, geography, natural history and naval architecture, navigation, commerce and agriculture, in order to give their children a right to study painting, poetry, music, architecture, statuary, tapestry, and porcelain."

John Adams, letter to Abigail Adams, 1780
posted by newdaddy at 9:37 PM on July 7, 2010 [3 favorites]

Google Finance tells me that Intel had a net income of $2.4B over the first quarter of 2010 with $16B cash on hand. Intel is putting its money where its mouth is.

Apple had a $3B net income with $23B cash on hand. Your move Mr. Jobs.
posted by pashdown at 2:04 AM on July 8, 2010

It's as simple as this, a country needs a variety of industries to successfully employ people of all education levels and temperaments.
posted by mochek at 2:58 AM on July 9, 2010 [1 favorite]

North America's future lies with the Design or creative economy. Wouldn't you rather your children manufacture ideas?

Creative jobs are symbiotic on, not distinct from, manufacturing jobs.

The sectors of the economy which actually produce physical commodities--agriculture, mining, food processing, and manufacturing--are the real engine of the economy. So-called "creative" jobs can act as a multiplier of sorts, but you can't have creative jobs without a manufacturing base. Otherwise there would be no one with any money to pay the creatives.

*That's because the government is spending hundreds of billions of dollars on it. It's called "Medicare". Health care job growth and increases in government health care spending are almost directly related.
posted by valkyryn at 3:38 AM on July 9, 2010

Up from globalism By Alan Tonelson.

Today, the idea of maintaining genuine American prosperity without a vibrant manufacturing sector stands exposed as a fairy tale. In December 2007, our production-light economic expansion officially collapsed into the worst worldwide downturn since the Great Depression. The recessionary forces unleashed by the crash are so powerful that they are keeping private-sector U.S. growth negligible despite trillions of dollars of government bailouts—not to mention interest-free borrowing for the country’s biggest banks and record-low interest rates for the rest of the economy. Indeed, the Federal Reserve considers healthy growth (as opposed to the unsustainable government-created kind it is still fostering) such a remote prospect that it expects to maintain its economic life-support programs indefinitely.

This is from January. I'm reading this years Harper's backwards. I'm almost all caught up.
posted by chunking express at 12:59 PM on July 9, 2010

Attacking unemployment

Chrystia Freeland has been attending similar discussions in Aspen:

America's two-speed economy may not be anyone's fault ... but might, instead, be the inevitable consequence of the twin revolutions of globalization and technological change... the political consequences of a two-speed America might not be pretty: "America cannot be America without a middle class ... we will become Brazil and all live behind gates to protect our children."

There's a real risk that American companies will thrive on foreign labor, leaving their home nation to slowly devolve into a land of chronic unemployment and widespread lack of skills... But maybe unemployment is simply a problem to which there is no good medium-term solution, let alone any short-term fix. Certainly the government can't directly employ the unemployed, and although I'm a big fan of arts subsidies as a way of creating jobs, that kind of thing is only ever going to have a marginal effect.

I do think that my first commenter, Harrington, is right that it's high time to start giving labor unions more recognition and power. That might seem a bit counterintuitive... Without unions and minimum-wage laws, corporations compete on who can pay the least. With them, they compete on who has the best employees and they invest significantly in those employees...

But I like HBC's comment the best:

The prevailing epidemic of bad jobs (formerly known as careers) American workers are having to get used to can be directly attributed to protracted periods of really awful American management, for which there can be no tolerable excuse.

America invented the concept of management as a profession and course of study and in doing so helped to cement the victory of capital over labor. That works until the workforce becomes so demoralized as to be useless — at which point the jolly capitalists just decide to hire foreign workers instead. This is good for investors in the short term, but it's very bad for the economy in the long term...

At the same time, however, it's hard to imagine capital giving up its hard-fought gains and becoming much more paternalistic and generous to its employees, hiring more people and paying them better. Which is one reason why I'm a pessimist when it comes to the long-term employment situation.

cf. The Great Rupture, Innovation, Scaling, and the Industrial Commons & Why is the American Jobs Machine Broken? + slashdot discussion
posted by kliuless at 10:23 AM on July 11, 2010

The Vanishing American Consumer and the Coming Trade War
America Needs a Growth Strategy
Preventing 2006
posted by kliuless at 11:11 AM on July 11, 2010