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A link in the article shows a drastic drop in manufacturing during mid-90s. Ross Perot was spot on about NAFTA and the giant sucking sound: http://blogs.wsj.co

by madengr 10y ago

A link in the article shows a drastic drop in manufacturing during mid-90s. Ross Perot was spot on about NAFTA and the giant sucking sound: http://blogs.wsj.com/economics/2016/06/20/as-low-skilled-jobs-disappear-men-drop-out-of-the-workforce/ http://blogs.wsj.com/economics/2016/06/20/as-low-skilled-job...

analog31 10y ago
Did those jobs move to Canada and Mexico? On the other hand, it's my understanding that NAFTA also provides for cross-border portability for some occupations, notably engineers.
- joneholland 10y ago
  No, they moved to China.
  - adventured 10y ago
    No, China stole few manufacturing jobs. US manufacturing output is at an all-time high today. It hasn't decreased, it has significantly expanded since NAFTA was created. Productivity destroyed those jobs. The US is producing far more output, with far fewer manufacturing jobs. It's a replication of the productivity gains in farming previously. Workers have to move to other skill fields with growth, just as they did as farming's productivity soared.
    - jdavis703 10y ago
      Jobs can't be stolen. It's just a structured activity that we give worthless colored paper (or bits on a bank's server) to people for doing.
      - jdavis703 10y ago
        Responding because I'm getting downvotes... I (an American) was hired at one company because the management felt the country where the company was started (not in the USA) had sub-par engineering talent. Now I don't believe that statement to be true, in this specific case or in general, but wouldn't that make me a thief? Should I be locked in jail for taking a job people thought they owned?
    - colordrops 10y ago
      Do you have some numbers to back this up? I don't recall almost everything in my house being manufactured in China when I was a child in the 70s. It appears to be the case now though.
      - greggyb 10y ago
        https://www.aei.org/wp-content/uploads/2013/12/mfg1.jpg https://www.aei.org/wp-content/uploads/2013/12/mfg1.jpg
      - jdminhbg 10y ago
        Here's a decent summary of the numbers around US manufacturing output: http://www.marketwatch.com/story/us-manufacturing-dead-output-has-doubled-in-three-decades-2016-03-28 http://www.marketwatch.com/story/us-manufacturing-dead-outpu... I'd say the things around the house that say Made In China on them are largely things that simply didn't exist in the 70s. I'd like to find some kind of comparison to look into whether that intuition is correct, but whether it is or not, the numbers absolutely show US manufacturing is high and growing. It's manufacturing jobs that are disappearing, mostly due to automation.
        sverige 10y ago
        It used to be the case that the US made the stuff that simply didn't exist before. (I don't mean apps, I mean tangible goods.) And lots of stuff that used to be made here is now made in China and other parts of Asia, like furniture and clothing and phones.
        adventured 10y ago
        As for your example, US-based furniture manufacturing has seen a significant recovery since China initially wounded it decades ago: http://www.cnbc.com/2014/10/26/once-creaky-sales-turn-sturdy-for-us-furniture-makers.html http://www.cnbc.com/2014/10/26/once-creaky-sales-turn-sturdy...
        10y ago
    - anamoulous 10y ago
      > But even these anemic numbers mask serious mismeasurement of manufacturing output. More than 110 percent of all real manufacturing growth during this period was driven by a single sector, computers and electrical components (NAICS 334), whose output has been shown by numerous academic studies to be seriously overstated as a result of the very rapid rate of progress in computer processing speeds. Because this one sector (NAICS 334) accounted for all the output growth from 2000 to 2009, the other 18 major manufacturing industries were as a group producing less at the end of 2009 than they were in 2000. http://www2.itif.org/2015-myth-american-manufacturing-renaissance.pdf http://www2.itif.org/2015-myth-american-manufacturing-renais...
      - adventured 10y ago
        It's particularly obvious that "computers and electrical components" do not account for the manufacturing output index climbing from 100 to 130+ between 2009 and 2016 and hitting a new historical high.
        anamoulous 10y ago
        > It hasn't decreased, it has significantly expanded since NAFTA was created "computers and electrical components" account for a good deal of the expansion in this time period. Output is growing but it's lagging behind GDP growth. A heavy amount of the growth after the recession comes from the automobile sector. It's uncertain how sustainable that is. It's just more complicated than trumpeting that manufacturing is at an all-time high. There are real concerns underneath those numbers.
    - Spooky23 10y ago
      No, whole industries left wholesale. It is a situation nothing at all like farming. Manufacturing output in current dollar terms is focusing on a few remaining successful sectors: autos, metals, some machinery and a half dozen, much smaller ones. Most of that growth is more about Japan's problems than our advantages. Farming went the other way, it industrialized, and our wealth and government policy revolutionized it with Midwest grain and California's miracle in the desert.
  - analog31 10y ago
    Indeed, and I'm under no illusion about manufacturing jobs moving out of the US. But I just don't see the connection to NAFTA.
- madengr 10y ago
  Mexico, but then China came on the scene. Mexico then just moved to the US.
- Spooky23 10y ago
  Mexico was the start. All of the consultancies and outsourcing methodologies were built on moving to the US South and then Mexico.
- HeyLaughingBoy 10y ago
  No, mostly stolen by robots :-) Seriously though, most of the reduction in US manufacturing labor is due to guys like us: we automated the hell out of it.
adventured 10y ago
Three counter points to that claim. 1) US manufacturing real output, 1985-2015: http://i.imgur.com/QMRdpJO.png http://i.imgur.com/QMRdpJO.png 2) Total construction spending on manufacturing: http://i.imgur.com/pXKLGdy.png http://i.imgur.com/pXKLGdy.png 3) Real manufacturing output per US worker, 1947-2011: http://i.imgur.com/8SSHwiJ.jpg http://i.imgur.com/8SSHwiJ.jpg Real manufacturing output is far higher today than when NAFTA began. That giant sucking sound, is mostly productivity gains ending jobs that apparently no longer needed to exist.
- madengr 10y ago
  What productivity gain could cause a drop from %18 to %14 in 5 years; that is disruptive. I've been an EE for 20 years, and don't recall any technologies that would cause that. The tech advancements to manufacturing are a slow progression. Now didn't the BLS reclassify a bunch of service sector jobs as manufacturing, such as manufacturing burgers at McDonald's?
  - adventured 10y ago
    You're proposing that counting burger flipping at McDonald's (or the equivalent) explains an eight fold increase in dollar output per manufacturing worker since 1947, and a doubling since 1997? I'm not aware of any reclassification by the BLS, such that making burgers is now considered manufacturing. The BLS very clearly still considers McDonald's employees to be service workers, not manufacturing jobs. You can see it in the monthly jobs reports. If all of those types of service workers were now considered manufacturing jobs, we'd have seen a massive boom in manufacturing job creation over time.
deleted 10y ago
[deleted]
jseliger 10y ago
Hardly. Ricardo still rules and virtually no one who says things like the above even understands gain from trade. Moreover, it turns out that NAFTA may have actually saved the US auto industry: http://www.nytimes.com/2016/03/30/business/economy/nafta-may-have-saved-many-autoworkers-jobs.html http://www.nytimes.com/2016/03/30/business/economy/nafta-may....
api_or_ipa 10y ago
NAFTA isn't what caused the changes in the labour market you lament. 2nd wave globalization, a shift to a knowledge economy and changes in social equality, especially with the rise of women in the workforce and the acceptance of child raising men all contributed to major changes in the labour force

by madengr 10y ago

analog31 10y ago

Did those jobs move to Canada and Mexico? On the other hand, it's my understanding that NAFTA also provides for cross-border portability for some occupations, notably engineers.

joneholland 10y ago
No, they moved to China.
- adventured 10y ago
  No, China stole few manufacturing jobs. US manufacturing output is at an all-time high today. It hasn't decreased, it has significantly expanded since NAFTA was created. Productivity destroyed those jobs. The US is producing far more output, with far fewer manufacturing jobs. It's a replication of the productivity gains in farming previously. Workers have to move to other skill fields with growth, just as they did as farming's productivity soared.
  - jdavis703 10y ago
    Jobs can't be stolen. It's just a structured activity that we give worthless colored paper (or bits on a bank's server) to people for doing.
    - jdavis703 10y ago
      Responding because I'm getting downvotes... I (an American) was hired at one company because the management felt the country where the company was started (not in the USA) had sub-par engineering talent. Now I don't believe that statement to be true, in this specific case or in general, but wouldn't that make me a thief? Should I be locked in jail for taking a job people thought they owned?
  - colordrops 10y ago
    Do you have some numbers to back this up? I don't recall almost everything in my house being manufactured in China when I was a child in the 70s. It appears to be the case now though.
    - greggyb 10y ago
      https://www.aei.org/wp-content/uploads/2013/12/mfg1.jpg https://www.aei.org/wp-content/uploads/2013/12/mfg1.jpg
    - jdminhbg 10y ago
      Here's a decent summary of the numbers around US manufacturing output: http://www.marketwatch.com/story/us-manufacturing-dead-output-has-doubled-in-three-decades-2016-03-28 http://www.marketwatch.com/story/us-manufacturing-dead-outpu... I'd say the things around the house that say Made In China on them are largely things that simply didn't exist in the 70s. I'd like to find some kind of comparison to look into whether that intuition is correct, but whether it is or not, the numbers absolutely show US manufacturing is high and growing. It's manufacturing jobs that are disappearing, mostly due to automation.
      - sverige 10y ago
        It used to be the case that the US made the stuff that simply didn't exist before. (I don't mean apps, I mean tangible goods.) And lots of stuff that used to be made here is now made in China and other parts of Asia, like furniture and clothing and phones.
        adventured 10y ago
        As for your example, US-based furniture manufacturing has seen a significant recovery since China initially wounded it decades ago: http://www.cnbc.com/2014/10/26/once-creaky-sales-turn-sturdy-for-us-furniture-makers.html http://www.cnbc.com/2014/10/26/once-creaky-sales-turn-sturdy...
        10y ago
  - anamoulous 10y ago
    > But even these anemic numbers mask serious mismeasurement of manufacturing output. More than 110 percent of all real manufacturing growth during this period was driven by a single sector, computers and electrical components (NAICS 334), whose output has been shown by numerous academic studies to be seriously overstated as a result of the very rapid rate of progress in computer processing speeds. Because this one sector (NAICS 334) accounted for all the output growth from 2000 to 2009, the other 18 major manufacturing industries were as a group producing less at the end of 2009 than they were in 2000. http://www2.itif.org/2015-myth-american-manufacturing-renaissance.pdf http://www2.itif.org/2015-myth-american-manufacturing-renais...
    - adventured 10y ago
      It's particularly obvious that "computers and electrical components" do not account for the manufacturing output index climbing from 100 to 130+ between 2009 and 2016 and hitting a new historical high.
      - anamoulous 10y ago
        > It hasn't decreased, it has significantly expanded since NAFTA was created "computers and electrical components" account for a good deal of the expansion in this time period. Output is growing but it's lagging behind GDP growth. A heavy amount of the growth after the recession comes from the automobile sector. It's uncertain how sustainable that is. It's just more complicated than trumpeting that manufacturing is at an all-time high. There are real concerns underneath those numbers.
  - Spooky23 10y ago
    No, whole industries left wholesale. It is a situation nothing at all like farming. Manufacturing output in current dollar terms is focusing on a few remaining successful sectors: autos, metals, some machinery and a half dozen, much smaller ones. Most of that growth is more about Japan's problems than our advantages. Farming went the other way, it industrialized, and our wealth and government policy revolutionized it with Midwest grain and California's miracle in the desert.
- analog31 10y ago
  Indeed, and I'm under no illusion about manufacturing jobs moving out of the US. But I just don't see the connection to NAFTA.
madengr 10y ago
Mexico, but then China came on the scene. Mexico then just moved to the US.
Spooky23 10y ago
Mexico was the start. All of the consultancies and outsourcing methodologies were built on moving to the US South and then Mexico.
HeyLaughingBoy 10y ago
No, mostly stolen by robots :-) Seriously though, most of the reduction in US manufacturing labor is due to guys like us: we automated the hell out of it.

adventured 10y ago

Three counter points to that claim. 1) US manufacturing real output, 1985-2015: http://i.imgur.com/QMRdpJO.png http://i.imgur.com/QMRdpJO.png 2) Total construction spending on manufacturing: http://i.imgur.com/pXKLGdy.png http://i.imgur.com/pXKLGdy.png 3) Real manufacturing output per US worker, 1947-2011: http://i.imgur.com/8SSHwiJ.jpg http://i.imgur.com/8SSHwiJ.jpg Real manufacturing output is far higher today than when NAFTA began. That giant sucking sound, is mostly productivity gains ending jobs that apparently no longer needed to exist.

madengr 10y ago
What productivity gain could cause a drop from %18 to %14 in 5 years; that is disruptive. I've been an EE for 20 years, and don't recall any technologies that would cause that. The tech advancements to manufacturing are a slow progression. Now didn't the BLS reclassify a bunch of service sector jobs as manufacturing, such as manufacturing burgers at McDonald's?
- adventured 10y ago
  You're proposing that counting burger flipping at McDonald's (or the equivalent) explains an eight fold increase in dollar output per manufacturing worker since 1947, and a doubling since 1997? I'm not aware of any reclassification by the BLS, such that making burgers is now considered manufacturing. The BLS very clearly still considers McDonald's employees to be service workers, not manufacturing jobs. You can see it in the monthly jobs reports. If all of those types of service workers were now considered manufacturing jobs, we'd have seen a massive boom in manufacturing job creation over time.

deleted 10y ago

[deleted]

jseliger 10y ago

Hardly. Ricardo still rules and virtually no one who says things like the above even understands gain from trade. Moreover, it turns out that NAFTA may have actually saved the US auto industry: http://www.nytimes.com/2016/03/30/business/economy/nafta-may-have-saved-many-autoworkers-jobs.html http://www.nytimes.com/2016/03/30/business/economy/nafta-may....

api_or_ipa 10y ago

NAFTA isn't what caused the changes in the labour market you lament. 2nd wave globalization, a shift to a knowledge economy and changes in social equality, especially with the rise of women in the workforce and the acceptance of child raising men all contributed to major changes in the labour force