View Full Version : Creating new manufacturing jobs in US
John Mauldin is a self-confessed Republican writing his twice weekly newsletter with input from various sources.
Today's letter has this:
"But what do these sober tales have to do with tax reform? Tax reform, at least the Republican version, is predicated on creating jobs in the United States. In his campaign and since, Trump has focused on how Americans are losing jobs to foreign competitors. A seemingly straightforward trend, right? Jobs leave here and go to China and Mexico.
The truth is a little more complex. The simple fact of the matter is that United States is producing more manufactured goods than ever before. And the growth trend in manufacturing, which was established in the 1920s, has shown no signs of slackening, even through recessions. The chart below is from a study done by two professors at Ball State University. It’s a fabulous analysis that shows that 80% of the jobs that have been lost in American manufacturing have been lost due to technology. American workers are now dramatically more productive than they were in just the year 2000. The authors point out that our 12 million manufacturing jobs today produce the same amount of goods as 21 million manufacturing jobs did in 2000.
In Canada I am not directly impacted by the proposed US tax reform but will be impacted as it is being suggested that the dollar may not be the global currency base due to something called BAT.
"Whatever the rights and wrongs of the global economic status quo, dismantling such a huge pyramid of credit threatens havoc for the financial system."
Source:
http://www.mauldineconomics.com/frontlinethoughts/tax-reform-the-good-the-bad-and-the-ugly-part-one
Any countering views that can be shared as I would love to read them.?
I, for one, welcome our new Robot Overlords.
http://monetarywatch.com/2017/01/chinese-factory-replaces-90-human-workers-robots-sees-250-production-increase/
Chinese Factory Replaces 90% Of Human Workers With Robots, Sees 250% Production Increase
What jobs?
ToomuchStuff
2-8-17, 2:19am
The truth is a lot more complex. Companies are global in nature, so if they don't like an area, they can choose to move. We have a much larger population at the same time technology is making humans unneeded and expensive. (saw an article that claimed 50% of us could be replaced by robots/didn't read it)
Tech had brought production costs of so many things down, it is less cost effective to repair them (parts/labor and/or) and made what a lot of what was once considered "making middle class values" (by those I grew up around), both common, and available without the pain of saving up for them. (credit, and giving those that may have once been considered poor, tools to hurt themselves even more)
Then we choose debt/indentured servitude, in order to keep up with the Jones, putting money towards those same companies, and hoping their stocks keep doing the same, to help our "retirements" go up. (as well as costs of living, etc)
Yeah, a bit more complex.
Well, someone has to build the robots until they learn to build themselves?
I think bringing manufacturing jobs back is part of the alternate facts sales pitch. DJ's scheme for job creation is a shotgun approach with lower business taxes, big cuts in income taxes for the wealthy, rolling back environmental and other regulations, changing trade deals, and probably intimidating any anti DJ policy. I suspect this will create some jobs, maybe bring back a little coal industry, but I don't think there is a lot of hope for manufacturing between automation and cheap overseas labor.
It's not perfect agreement, but I think there is a general consensus was that Reagan's trickle down economics and deregulation was not especially successful.
Given we're a consumer based economy - and consumers largely get their dollars from working - what happens when we get to the point that so few workers are needed that consumers no longer have the means to be consumers? I would think at that point even the automated factories will shut down because no one is buying.
Are we technologically advancing to a point where our current economic system will no longer work?
Given we're a consumer based economy - and consumers largely get their dollars from working - what happens when we get to the point that so few workers are needed that consumers no longer have the means to be consumers? I would think at that point even the automated factories will shut down because no one is buying.
Are we technologically advancing to a point where our current economic system will no longer work?
Our system survived the transition from a primarily agricultural economy. Most of us already aren't factory workers. We make our livings insuring or massaging or suing or amusing or healing or governing each other.
Our system survived the transition from a primarily agricultural economy. Most of us already aren't factory workers. We make our livings insuring or massaging or suing or amusing or healing or governing each other.
Given the past election, there appears to be large numbers of people this isn't working for. Bringing jobs back was a big issue. Especially where those factory jobs disappeared from.
I don't think an economy where we try to sell cheeseburgers and back rubs to people who can't afford to buy cheeseburgers and back rubs and expect to prosper is going to work.
Our system survived the transition from a primarily agricultural economy. Most of us already aren't factory workers. We make our livings insuring or massaging or suing or amusing or healing or governing each other.
A quick check says that a little less than 10 percent of US jobs are in manufacturing. We obviously have people unemployed or underemployed but our economy at the current rate seems reasonably robust? What happens to the global economy, though, when the factories in China etc. loose jobs to automation.
Given the past election, there appears to be large numbers of people this isn't working for. Bringing jobs back was a big issue. Especially where those factory jobs disappeared from.
I don't think an economy where we try to sell cheeseburgers and back rubs to people who can't afford to buy cheeseburgers and back rubs and expect to prosper is going to work.
Those jobs won't come back for the same reason that passenger pigeons won't come back. They don't exist anymore.
I think we can adopt to an economy that doesn't require armies of semi-skilled assembly line workers. We're probably already mostly there. That is not to say there won't be winners and losers in the process, but that's always been true.
Those jobs won't come back for the same reason that passenger pigeons won't come back. They don't exist anymore.
I think we can adopt to an economy that doesn't require armies of semi-skilled assembly line workers. We're probably already mostly there. That is not to say there won't be winners and losers in the process, but that's always been true.
Pre-industrial revolution there was an economy in place. And winners and losers. And peasants and serfs - lots and lots of peasants and serfs.
It will always resolve to something - but I expect it will look more like something out of the Hunger Games.
Some people have proposed some sort of guaranteed income for all might be a solution. It doesn't seem like a need in the immediate future, but maybe sometime. It would imply some sort of wealth re-distribution which has not been universally popular.
Our system survived the transition from a primarily agricultural economy. Most of us already aren't factory workers. We make our livings insuring or massaging or suing or amusing or healing or governing each other.
The difference though is that when we transitioned to an industrial economy the economy also got significantly larger. The technologies that are coming out today aren't necessarily growing the economy, just making the doing of a lot of tasks more efficient. 20 years from now when all the trucks and buses and taxis drive themselves there won't be any more utility provided by those technologies, they will just do the same things but with less need for human work. The same for automation of information industries. Lower level paperwork is more and more handled by computers but over time higher and higher levels of administrative work, currently handled by middle managers, will get automated. Another area where jobs, at least in high cost western countries, will be lost and not replaced are every non location specific task. Not just the counter worker at McDonald's either. As part of my job I routinely review submissions of new tech companies. One of the recent submissions was for a company that has developed a system to transmit medical images, MRIs and ultrasounds and the like, across the internet to India. Doctors over there, earning roughly $20,000 per year, diagnose the patient and send the results back. Hospitals using this service no longer need as many high priced American doctors. If applied to other industries we could easily decimate our white collar job segment. After all, there's no reason my tax accountant needs to be in the US. Anyone anywhere can be taught the arcana of our tax code and then paid significantly less than a US based accountant for the same service. If it hasn't happened yet it will happen soon enough. First probably with individuals and small businesses, but soon enough they will have the experience to replace accountants at even large corporations.
ApatheticNoMore
2-8-17, 2:40pm
After all, there's no reason my tax accountant needs to be in the US. Anyone anywhere can be taught the arcana of our tax code and then paid significantly less than a US based accountant for the same service. If it hasn't happened yet it will happen soon enough.
I don't know how widespread it is with tax accounting (for that there is software afterall), but just general accounting, yea it's being done but mostly by bringing foreign trained accountants over here on H1Bs (I interviewed for a company doing that for their accounting department - was not interviewing for an accounting job though). And so I quickly figured out what that implies, foreigners must be specifically training on U.S. accounting standards just to get these jobs etc.. Maybe it's a whole industry to train them for that.
It would imply some sort of wealth re-distribution which has not been universally popular.
Certainly not among the people whose wealth is being redistributed.
Perhaps we could one day become so productive that some tolerable level of tax on industrial and commercial robots might be sufficient to support all us redundant flesh bags.
One of the recent submissions was for a company that has developed a system to transmit medical images, MRIs and ultrasounds and the like, across the internet to India. Doctors over there, earning roughly $20,000 per year, diagnose the patient and send the results back. Hospitals using this service no longer need as many high priced American doctors.....
This already sounds old to me. AI should replace these Indian doctors soon. Cheaper and more accurate. There may be some legal issues to sort out but medical imaging is an obvious area for AI advances.
I don't know how widespread it is with tax accounting (for that there is software afterall), but just general accounting, yea it's being done but mostly by bringing foreign trained accountants over here on H1Bs (I interviewed for a company doing that for their accounting department - was not interviewing for an accounting job though). And so I quickly figured out what that implies, foreigners must be specifically training on U.S. accounting standards just to get these jobs etc.. Maybe it's a whole industry to train them for that.
You can now sit for the US CPA exam in India. H1B's are relatively rare in accounting. I am not sure I have ever seen one and I have worked with hundreds of CPA's (and am one myself). Work does get sent overseas, though. For example, my last two jobs had some back office accounting done in India. but the vast majority was still US based.
All the Big accounting firms send tax returns to India to be done. I believe that the reviews typically are done by US based employees, though.
This already sounds old to me. AI should replace these Indian doctors soon. Cheaper and more accurate. There may be some legal issues to sort out but medical imaging is an obvious area for AI advances.
I agree. Although I work at a mega corp insurance company that still uses tech systems from the 1990's and expects highly paid staff to spend time re-inputting data from one system to the next so this company that I mentioned may well be profitable long enough to cash out with an IPO or a private buyer.
ToomuchStuff
2-9-17, 10:53am
Given we're a consumer based economy - and consumers largely get their dollars from working - what happens when we get to the point that so few workers are needed that consumers no longer have the means to be consumers? I would think at that point even the automated factories will shut down because no one is buying.
Are we technologically advancing to a point where our current economic system will no longer work?
When 3d printing advances more, and laws then interact with it (sorry, those shoes are IP protected property of Nike), I expect the system will have changed someone. (similar to how the UK has adapted from when it was an Empire, to the after war, less manufacturing state it is in)
Some people have proposed some sort of guaranteed income for all might be a solution. It doesn't seem like a need in the immediate future, but maybe sometime. It would imply some sort of wealth re-distribution which has not been universally popular.
Certainly not among the people whose wealth is being redistributed.
Perhaps we could one day become so productive that some tolerable level of tax on industrial and commercial robots might be sufficient to support all us redundant flesh bags.
I hear people say they would like that (don't hear any discussion of it from the wealthier ones I know), but I expect, even if it existed, then it still wouldn't help with the jealousy issues, the I want that issues, etc.
You would see stuff like:
www.youtube.com/watch?v=tpAOwJvTOio
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