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Production is not going to come back to the United States when we have draconian labor laws. That is the reason it left in the first place. We are going to be m

Production is not going to come back to the United States when we have draconian labor laws. That is the reason it left in the first place. We are going to be more dependent on foreign cheap labor as time goes on. We cannot weaken our currency and tighten our labor laws and expect investment in manufacturing at the same time.

tialaramex 7y ago
"Draconian labor laws" make no difference if you don't have any labor. That's key to grasping how different heavy automation makes things. Additional overhead of (let's pick a nice round guess) $5000 per worker adds up fast in a factory with 500 workers ($2.5M). But when you're only paying a maintenance technician and a security guard it's ten grand, and there are a lot of things a business might reasonably choose to do that cost ten grand without flinching.
- ghastmaster 7y ago
  My point is that the US industry has no compelling reason to invest in automation when foreign labor is so cheap. It is cheap because labor here is expensive. It is expensive because of regulatory and statutory intervention. You are correct that we do not have any labor(somewhat hyperbolic of course). I understand why in some cases automation makes total sense on the micro and macro level. Are you trying to say that because it is expensive to employ labor here automation will fill in the gap? If so, why? Labor is cheap in other regions and money is getting tighter as we speak. Automation requires heavy upfront costs.
  - tialaramex 7y ago
    You're 100% right so long as disease pandemics and other disruptive events are discounted. And I think in a board room in 2019 you could do that, you could say it makes no sense to hedge against a disease pandemic, those never happen. It makes no sense to optimise for locality when we can get cheap labour on the far side of the globe and disruption won't happen. But the trouble is that when you make that presentation in 2021 every single person in the room knows it isn't true, they all lived through this, they saw it themselves. Usually the next argument is the one you already brought up - but labour costs in the US are too high. But a robot factory doesn't incur labour costs as I explained.
    - ghastmaster 7y ago
      With the global lockdowns in place, you would have to consider the hedge. That is the point of the article and your point. There will certainly be companies that move toward automation. I wonder whether the moves toward automation at the micro level are offset by the lack of growth in the macro. Is it a wash? For how long? These are questions that we will find out.
travisporter 7y ago
Maybe you mean the costs not the laws. Here is a summary of the laws; they don't seem that draconian to me. https://www.dol.gov/general/aboutdol/majorlaws https://www.dol.gov/general/aboutdol/majorlaws
- ghastmaster 7y ago
  That's the tip of the ice burg. There is also the American's with Disabilities Act, Civil Rights Act, and others that combined make it incredibly expensive to employ labor.
  - perl4ever 7y ago
    Claiming that the ADA or civil rights imposes huge costs compared to some baseline is incredible to me. Can you provide some detail and quantify that?
    - ghastmaster 7y ago
      Assuming your incredulity is not disingenuous. Is it news to you that companies have insurance and that insurance cost a lot of money. The larger your labor force is, the more likely you are to be sued under those acts. That raises the cost of insurance. Whether you agree with the Acts or not, increased costs is a simple concept.
      - perl4ever 7y ago
        What part of "quantify" is unclear? When you say "incredibly expensive", you are definitely making a quantitative assertion and I don't think it's unreasonable to ask what that really is. I don't mean to suggest I'm immune to evidence against my prejudices, but I am doubtful enough I'm not going to do my own research right now. I hate false precision, so I'm not asking for that either. Just, like, what do you think the cost of those things is in percentage points, to one or two significant figures and why? If you run a business or something (I don't) where you have first hand knowledge, I would expect you would immediately know numbers.
dopidop 7y ago
Draconian labors laws? Oh dear. I live in the US since 6 years. I never felt like I never had a proper contracts. All at-will stuff with no long terms commitments on either ways. Try France if you want to see actual labors laws.

tialaramex 7y ago

"Draconian labor laws" make no difference if you don't have any labor. That's key to grasping how different heavy automation makes things. Additional overhead of (let's pick a nice round guess) $5000 per worker adds up fast in a factory with 500 workers ($2.5M). But when you're only paying a maintenance technician and a security guard it's ten grand, and there are a lot of things a business might reasonably choose to do that cost ten grand without flinching.

ghastmaster 7y ago
My point is that the US industry has no compelling reason to invest in automation when foreign labor is so cheap. It is cheap because labor here is expensive. It is expensive because of regulatory and statutory intervention. You are correct that we do not have any labor(somewhat hyperbolic of course). I understand why in some cases automation makes total sense on the micro and macro level. Are you trying to say that because it is expensive to employ labor here automation will fill in the gap? If so, why? Labor is cheap in other regions and money is getting tighter as we speak. Automation requires heavy upfront costs.
- tialaramex 7y ago
  You're 100% right so long as disease pandemics and other disruptive events are discounted. And I think in a board room in 2019 you could do that, you could say it makes no sense to hedge against a disease pandemic, those never happen. It makes no sense to optimise for locality when we can get cheap labour on the far side of the globe and disruption won't happen. But the trouble is that when you make that presentation in 2021 every single person in the room knows it isn't true, they all lived through this, they saw it themselves. Usually the next argument is the one you already brought up - but labour costs in the US are too high. But a robot factory doesn't incur labour costs as I explained.
  - ghastmaster 7y ago
    With the global lockdowns in place, you would have to consider the hedge. That is the point of the article and your point. There will certainly be companies that move toward automation. I wonder whether the moves toward automation at the micro level are offset by the lack of growth in the macro. Is it a wash? For how long? These are questions that we will find out.

travisporter 7y ago

Maybe you mean the costs not the laws. Here is a summary of the laws; they don't seem that draconian to me. https://www.dol.gov/general/aboutdol/majorlaws https://www.dol.gov/general/aboutdol/majorlaws

ghastmaster 7y ago
That's the tip of the ice burg. There is also the American's with Disabilities Act, Civil Rights Act, and others that combined make it incredibly expensive to employ labor.
- perl4ever 7y ago
  Claiming that the ADA or civil rights imposes huge costs compared to some baseline is incredible to me. Can you provide some detail and quantify that?
  - ghastmaster 7y ago
    Assuming your incredulity is not disingenuous. Is it news to you that companies have insurance and that insurance cost a lot of money. The larger your labor force is, the more likely you are to be sued under those acts. That raises the cost of insurance. Whether you agree with the Acts or not, increased costs is a simple concept.
    - perl4ever 7y ago
      What part of "quantify" is unclear? When you say "incredibly expensive", you are definitely making a quantitative assertion and I don't think it's unreasonable to ask what that really is. I don't mean to suggest I'm immune to evidence against my prejudices, but I am doubtful enough I'm not going to do my own research right now. I hate false precision, so I'm not asking for that either. Just, like, what do you think the cost of those things is in percentage points, to one or two significant figures and why? If you run a business or something (I don't) where you have first hand knowledge, I would expect you would immediately know numbers.

dopidop 7y ago

Draconian labors laws? Oh dear. I live in the US since 6 years. I never felt like I never had a proper contracts. All at-will stuff with no long terms commitments on either ways. Try France if you want to see actual labors laws.