Hey Rustbelt and beyond, Losing factories is not new
(There’s a movie at the end!)
For decades we have been hearing about the loss of industrial production through out what is called the “Rust Belt”. It’s presented, even as recent as the prior presidential election as a relative regional problem that only began post Reagan. What gets me though is that the reporting and ultimately the politics are as if the rust belt is/was unique in their experience with the west and east coast experiencing nothing of the sort. The presentation is of the west coast Hollywood economy and now the “tech” economy, the east coast (namely New York/Boston) being the money economy. The south east is not considered other than Disney and orange production. The north west? Microsoft and Starbucks. Well I think it used to be lumber.
Wiki notes that the rust belt is not geographic but is a term that “pertains to a set of economic and social conditions“. It includes the northeast which is proper in that industry started there but I have had the feeling for a few decades now that such history is forgotten and thus no longer considered when we look to understand what the hell happened to the middle class.
Let me start with this fun fact. Rhode Island was the most industrialized state per capita in the nation at one point. Wiki notes that:
…Aldrich, as US Senator, became known as the “General Manager of the United States,” for his ability to set high tariffs to protect Rhode Island — and American — goods from foreign competition.
We were where the super rich came to escape the heat and play. And then it started to die. Not just here though. Neighboring Massachusetts was hit as was Connecticut. If you ever get a chance, come visit the New Bedford Whaling museum and read about the massive industry that was there. Example, the worlds largest mill of weaving looms. Some 4000+! Whaling from that city in the later 1800’s generated some $71 million per year! Not impressed? Well, using the GDP deflator it’s $1.480 billion per year!
But it wasn’t to last. Some people from the south decided to sell it as the nonunion place to be and so moved the mills. I wrote about one major player in this in 2008. He did not like the moving of jobs to China as he understood it was undercutting our labor class. The middle class. Yet, he had no problem doing the same to the north east. Democratic Senator Hollings. Hated unions to the end. (The post is still relevant today.)
Ah, for the want of the old days and tariffs. Oh well. It’s a new world order.
But, here we are yet still again. Election time. The poor middle class. Only, the catering seems to be to those who are recently losing their industrial jobs. Recent as in only since the 1980 as if the non-northeast part of the rust belt could not have learned from the northeast.
This gets me to the point: Farewell to Factory Towns? It’s a documentary fill about the Sprague Capacitor Factory, a strike and what has been tried but not work as planned. It’s a bit of history that I believe might just help bring together those of the “heart land/rust belt” with the “elitists” on the coasts. We really have, as part of the middle class, all had and are having the same social, economic and political experience. It is an award winning film.
With a focus on North Adams, Massachusetts, the documentary raises that question for similar communities throughout the United States. Beginning in the 1970s, the film deals with the concepts of deindustrialization, the fraying of the social safety net, globalization and neoliberalism. During the same period that factory towns from Youngstown to Buffalo to North Adams were hit with factory closings and massive unemployment, government policy moved to the right and Federal and state economic and social programs, like AFDC, were cut back or ended. What were factory towns to do? Where would help come from? If not from government programs, then from where?
I’m posting this to add to the discussion of PGL’s post regarding the Bread and Roses strike. Do take the time to watch it if only for the interest in our history.
This is what happens when you allow dialectics to control you. The “elite” want to play fantasies and divide/conquer techniques to control the world.
The origin of the midwestern rustbelt starts in the mid-1920’s when the wave from the industrial revolution started to fall back as the innovation wave began to crest, creating excess capacity.. By the post-war boom, manufacturing was no longer driving job growth anymore and had become stagnate. The point? Industrial Towns were drying up by the 1930’s and they never recovered. It just didn’t hit the bigger population areas until the 1980 when over hiring, especially in the auto-industry got exposed.
Industry in the future isn’t going to drive growth, instead for national self-sufficiency. Which it should be sold with workers supporting automation.
Until neoliberal elite stops its brutal squeeze of workers, expect collapsing of the social contract. The country was already in a pre-revolutionary state in 2016 with the net result of election of Trump over Clinton (and, given a chance, people would have chosen Sanders over Trump).
The color revolution against Trump, which is underway, is, as s side effect, undermining of influence of neoliberal MSM (aka “fake news” ) and social unity of the nation. When the President calls WaPo “Bezos blog” that’s delegitimization (and naked Bezos photos does not help either) When FBI is compared to STASI and Mueller investigation is called a witch hunt that points on the deeply divided country with the fractured neoliberal elite experiencing the crisis of legitimacy.
But the basic problem is that it costs a lot of money to cultivate a segment of the market now as it involves creation of a group of new consumers. And the more sophisticated the segment is, the more expensive it is. If workers are squashed (good jobs are displaced by McJob and/or permatemps) you face stagnation as top 10% can’t replace bottom 80% as consumers.
That’s probably why the US economy can’t escape secular stagnation and reported growth is within the error margin of measurements and heavily depends on the inflation metric and “expansive” treatment of GDP (gambling, financial industries, military expenses, etc)
Paul Krugman said the US economy may be heading into a recession On the positive side that might end Trump run and give Warren a chance. On the negative it will amplify the current inequality problems and might provoke social unrest.
Sorry, Lilbez, Trump didn’t win anything and was a neoliberal invention which coincides with evangelical voters. Why you keep on missing that point? Don’t you want to admit that?
Another little fact, Sprague’s growth peaked in 1959. It actually was bleeding jobs by the late 60’s which triggered the real strikes. Maybe, just maybe that growth was a illusion of the war driven destruction.
Bert — the first death of manufacturing was the New England textile and shoe industries in the 1920’s–1940s. Those industries finally became too small to have a significant negative impact in New England in the 1960s and 1970s. Boston and other New England areas started rebounding in the 1960s, largely on the back of aerospace and other technology intensive industries. But the 1970 recession was lead by the fall in those industries. So the Massachusetts Miracle appeared to start with the recovery from the 1970 recession. What made Mass different. One by the 1960s shoes and textiles has become so small that they were no longer a significant drag on the economy. Second, Massachusetts continued its very large investment in education, and it was not only MIT, but throughout the public secondary and college level schools. So it had the educated population to move into the very early stages of the emerging information technology industries that later came to be known as the Massachusetts Miracle. So Mass went through the death of its key manufacturing industries earlier than other regions, but continued to invest heavily in education, something I’m afraid I do not see in the Midwest. Moreover, in the Midwest the traditional industries are still large enough that weakness in them still has a significant negative impact on GDP. Moreover, the growth we do see in autos and other Midwestern industries is occurring in the South and does not help the Midwest much — Alabama is now the second most important manufacturer of cars and light trucks.
There is a certain validity to your analysis, but it is off by enough to be misleading.
Spencer is right about manufacturing vanishing over a much longer time frame. Manufacturing jobs have been vanishing since the early 20th century. A lot of this is increased efficiency. It used to take over 100 work-hours to build a car. Now it’s down to 20 and still falling. New England industrialized early, and by the 1970s the dead/dying shoe industry was a major item in the presidential debates. In ‘Still the Iron Age’, Smil points out that the steel industry has probably gained an order of magnitude in efficiency over the last 30 years, but this kind of thing never gets press coverage. Basic oxygen furnaces and direct reduction or iron don’t make good news stories.
The places that have recovered first emphasized education and having a broad portfolio. Who would have imagined how important furniture design and manufacturing would be to Los Angeles recovery from the aerospace collapse after the Cold War? The big difference with our “Rust Belt” is the overall massive level of denial combined with vicious racism and antisemitism: “If we could just kill enough blacks and Jews, they’ll start making washing machines here again.”
Below is an interesting note of Timothy Taylor on the composition of GDP.
== quote ==
Why Did Simon Kuznets Want to Leave Military Spending out of GDP?
Simon Kuznets (Nobel 1971) usually gets the credit for doing as much as anyone to organize our modern thinking about what should be included in GDP, or left out. But I had not known that Kuznets apparently argued for leaving military spending out of GDP, on the grounds that it wasn’t actually “consumed” by anyone, but should instead be treated as an intermediate input that supported production and consumption.
… … …
=== end ===
In political terms, excluding national defense from GDP would create the impression that the government’s statistical agency supports “Peaceniks” — the critics of “oversized” America’s defense budget. It was incompatible with the imperial ambitions of the USA in post-WWII era.
That’s probably why his suggestion was killed.
If you dig you can find Brad Delongs description of his family’s moving their business from the NE to the south. Happened in the 20’s I think.
Tried to find a link and failed.
One of the problems of today is how to get folks to move to opportunity rather than stay and stagnate. The kids move but it is much harder for the parents and older relatives.
To paraphrase Woody Allen, the economy is like a shark, it has to keep moving to live, what we have here is a dead shark.
“From roughly 1880 through the 1920s, Philadelphia’s industrial districts supported an array of mills and plants whose diversity has scarcely been matched anywhere in the history of manufacturing. When the U. S. Census charted some three hundred categories of industrial activity, surveys of Philadelphia showed firms active in nearly ninety percent of them. No city had a wider range of textile products, for example, as Kensington, Germantown, Frankford and Manayunk churned forth laces, socks, carpets, blankets, rope and cordage, men’s suitings and women’s dress goods, silk stockings, upholstery, tapestries, braids, bindings, ribbons, coverlets, knit fabric and sweaters, surgical fabrics, military cloths and trimmings, draperies, and yarns of every description. At the turn of the century, roughly seven hundred separate companies operated in textiles alone, employing some sixty thousand people. Yet this immense workforce amounted to only one quarter of the city’s industrial workers. Unlike New England centers that often focused on a single sector (for Massachusetts, textiles in Lowell, Lawrence, Fall River and New Bedford, paper in Holyoke, shoes in Lynn), Philadelphia could and did do nearly everything across the spectrum of transforming materials into products.
Moreover, though it hosted some huge facilities, Philadelphia was known far better as an incubator for small enterprises, as a city packed with workshops and mid-size firms begun in many cases by workers or supervisors who “graduated” from employment to entrepreneurship. In Lawrence, Pittsburgh, or Detroit in its Ford era, a tiny number of great firms were the major employers (American Woolen, U. S. Steel) and dominated the landscape as well as local economic and political life. Yet in Philadelphia, even the eight to ten thousand workers engaged at the Baldwin Locomotive Works were a minuscule fragment of the city’s quarter million industrial employees. Hence the city was dependent neither on one manufacturing trade nor on any cluster of giant corporations for its economic health. Nor however could the rapid rise of a leading firm or sector produce a city-wide growth boom, as autos did for Detroit. Diversity was unspectacular, but it avoided the high-wire act of being dedicated to a single industry. It was such reliance that turned the textile and shoe cities of New England into “ghost towns” during the 1920s, and more recently has ground down Detroit and Pittsburgh. By contrast, Philadelphia’s decay like its advance was spread across half a century, a pattern that robbed it of sudden drama and made it difficult to perceive or reverse.
In its heyday, Philadelphia’s thousands of modest scale firms were linked together through contracts and trade in elaborate ways that make it possible to view the city as a vast workshop as well. Carpet makers purchased yarn from one firm, had it dyed at a second, bought pattern designs from a third, punched cards to control the weaving process (Jacquard) from a fourth. The card makers got coated paper stock from specialist paper manufacturers in Manayunk; the dyers bought special machinery from Procter and Schwartz which in turn purchased metal castings from various city foundries. Even at the level of the biggest establishments, such connections were frequent. Midvale Steel, makers of everything from armor plate to ship’s cannon and drive shafts, bought its yard locomotives from Baldwin and commissioned special machines for metal cutting from William Sellers, the city’s most venerable machinery building plant. Some of Midvale’s plate doubtless found its way to the Navy Yard or to Cramp’s, shipbuilders for a century along the Delaware. Baldwin Locomotive long operated as a network of workshops complete with internal contracts upon which shop masters might turn efficiency into a profit. The presence of hundreds of firms with every sort of capacity so close to hand encouraged Philadelphia mill men to value and use nearby talent, thereby deepening the web of interconnections.
Of course, none of this could have been developed without the “world” out to which Philadelphia shipped its final products and from which materials, fuel, and for a long period, fresh workers and entrepreneurs arrived by ship and rail. During the decades surrounding 1900, the city drew heavily on Pennsylvania’s rich coal reserves, depended on the reliability of the vast Pennsylvania Railroad system, the Reading and the B&O, and profited from its deepwater port, through which a sturdy fraction of the world’s wool supply flowed steadily. Of course, Philadelphia firms supplied the nation with tools and saws, fabrics and machinery, but they were also alert to the possibilities of export trade.”
And does this sound familiar?
From the late 1930s into the 1950s, Philadelphia’s labor climate also significantly changed, inhibiting new investment in the local textile industry. A long and bitter strike against Philadelphia’s Apex Hosiery Company in 1937 opened a decade of rising labor militancy across the regional economy. Reaching a crescendo with strikes against Baldwin Locomotive, Westinghouse, and General Electric in 1945-46, workers’ militancy contributed to shifts of production and investments to the nonunionized parts of the region and country in the 1950s and 1960s.
A black and white photograph of women sitting on a bench outside Apex Hosiery during a strike
Apex Hosiery was one of the largest non-union garment firms in the city. (Historical Society of Pennsylvania)
These local strikes echoed national trends in management-labor conflict, but they had particularly significant effects on Philadelphia’s postwar textile industry because the timing coincided with rapid changes in technology and products. In the late 1940s and early 1950s, the industry reached a critical transition: new products had to be produced from new materials in new ways in new plants. Factory owners confronted the question of whether to build new plants in the Philadelphia metropolitan area, close, or shift production elsewhere. When they had a choice, they typically moved elsewhere or diverted their capital to other types of investments.
I can clearly remember a conversation I had with my mother in the early 70s. She had become an adult in the 30’s and lived in Philadelphia her entire life, therefore seeing closehand what is described in the two links above, particularly the post WWII era.
She told me that the US was going to turn into a place where the only thing we would manufacture would be hamburgers.
It was in the eighties I believe, I sat in a Sprague office talking with management about some work I could do there at their company. It was going well. The night before I stayed at the Williams Inn. I was taken to lunch at the Williams College Cafeteria. The morning before my discussions began, I had wandered around the Williams College Campus and talked with some of the students. The setting was to be admired with the rolling mountains. I came to North Adams on Highway 2 out of Boston and took the hairpin curve at the speed limit.
I spent time with the upper management and then was shuffled off to personnel who took me on a tour. I collect and the director took me to the museum where they had the 2nd largest collection of Renoir(?) in the world. We went back to his office and discussed the personnel and what it would take to get me out there.
He was called out of his office for a few minutes. He came back and said he had to end the discussion explaining it was nothing I did or anything had happened because of myself. I left the facility making my way the Albany, NY to catch a flight back to Chicago. The company was sold that day. I still remember that day. It was a great setting.
I was always impressed by the granite and extremely hard curbs. I was used to concrete.
With all due respect, it looks like you forgot that at some point quantity turns into quality, so making simple extrapolations might well result in an oversimplification of the current situation.
You essentially ignore the current reality of rising popular anger, and the fact of breaking of the social contract by neoliberal (and first of all financial) oligarchy, which is as detached from “deplorable” as French aristocracy (“let them eat cakes” mentality.)
In 2019 it is clear that the USA completely and irreversibly moved from an economy based on high wages and reliable benefits to a system of low wages and cheap consumer prices, to the detriment of workers, which means that social contract was broken (https://www.theatlantic.com/business/archive/2013/12/the-past-and-future-of-americas-social-contract/282511/ ).
While less dangerous for the oligarchy then when the USSR used to exist, the level of social anger comes into play as never before. In 2016 became a material factor that decided the elections. I do not see that 2020 will be different.
The most detrimental effects from outsourcing and offshoring will come to the forefront probably in 10 years or so when the oil price might be well over $100 per barrel. But even now this huge social experiment on live people in redistribution of wealth up turn out to be detrimental for the unity of the country (and not only to the unity).
The current squabble between globalist, Clinton wing of Democratic Party allied with the corporatists with the Republican Party (with supporting intelligence agencies) and rag-tag forces of the opposition is a good indication of the power of this resentment.
Spearheaded by intelligence agencies (with material support from British government ) attack on Trump (aka Russiagate) is the attack on the idea of an alternative for neoliberal globalization, not so much on the personality or real or perceived Trump actions; the brutal, Soviet-style attack on the deviation from neoliberal status quo directed on the political elimination of the opposition by elimination of Trump from the political scene. Much like Show Trials were in the USSR (in this case people were charged to be British spies 😉
There are two countries now co-existing within the USA borders. Which often speak different languages. One is the country of professionals, managers, and capital owners (let’s say top 10%). The other is the country of common people (aka “deplorable”, or those who are below median wage — ~$30K in 2017; ratio of average and median wage is now around 65% ).
With the large part of the latter living as if they live in a third world country. That’s definitely true for McDonald, Wall-mart (and all retail) employees (say, all less than $15 per hour employees, or around half of US workers).
I think the level of anger of “deplorable” will play the major role in 2020 elections and might propel Warren candidacy. That’s why now some MSM are trying to derail her by exploiting the fact that she listed her heritage incorrectly on several applications.
But when the anger of “deplorable” is in play, then, as Donald Trump aptly quipped, one could stand in the middle of Fifth Avenue, shoot somebody and do not lose any voters. I think this is now true for Warren too.
Here are some old, but still interesting, facts circa Nov 2011 (https://www.businessinsider.com/sad-facts-deindustrialization-america-2011-11):
— The United States has lost approximately 42,400 factories since 2001
— The United States has lost a total of about 5.5 million manufacturing jobs since October 2000
— From 1999 to 2008, employment at the foreign affiliates of US parent companies increased an astounding 30 percent to 10.1 million
— In 1959, manufacturing represented 28 percent of U.S. economic output. In 2008, it represented 11.5 percent
— As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time less than 12 million Americans were employed in manufacturing was in 1941. The United States has lost a whopping 32 percent of its manufacturing jobs since the year 2000
— As of 2010 consumption accounts for 70 percent of GDP. Of this 70 percent, over half is spent on services
— In 2001, the United States ranked fourth in the world in per capita broadband Internet use. Today it ranks 15th
— Asia produces 84% of printed circuit boards used worldwide.
— In September 2011, the Census Bureau said 46.2 million Americans are now living in poverty, which is the highest number of poor Americans in the 52 years that records have been kept
NOTE: Programming jobs in the USA are expected to shrink in 2019 ( -21,300 ) so it is incorrect to look at IT industry as potential compensating industry for manufacturing layoffs. (https://money.usnews.com/careers/best-jobs/rankings/best-technology-jobs)
Other than taking one sentence from a paragraph which explained in greater detail, what is your point? In 2011 Poverty was 46.2 million, in 2016/17 it was ~39.7 million. In 59 and using slightly different measurements it was 22%. It is a nice array of stats. How does this add to Daniel’s commentary?
Intersting comment and my response to this work by Daniel Becker. Though I am disappointed the conversation did not occur here, but I tried.
kurt said in reply to EMichael…
Another problem the Rust Belt had was that about 75% of the graduates of the very good universities in the Rust Belt moved to California, Boston, Atlanta or Austin. Part of this was the lack of risk-taking investors in the Midwest because so many of the wealthy were old industry rich. The Northeast embraced new industries in a way the midwest didn’t.
I will never forget how I was treated in HS when I showed my computers teacher that the School District’s Wang Mini could be hacked via modem with the Apple II in the library, and that the computer labs Wang provided unrestricted access to the payroll, grades and attendance programs. I almost was kicked out of school. This was a not at all uncommon attitude among the older folks in my home state. As soon as I had the ability to get a decent income in CA, I left – and I don’t regret it a bit. Anyone who stood out got pounded down in the Hoosier state – unless they were basketball stars. Anyone who treated all persons as valuable similarly were attacked. I know this still happens because I visit every year. Every year someone takes it upon themselves to tell my son to cut his hair and somebody says something to my mom for knowing lots of young african american kids.
EMichael said in reply to kurt…
You sort of make my point. You are the two decades difference between what happened in manufacturing between the NE cities and the rustbelt.
What you went through in terms of “attitude” in Indiana also happened in the NE cities two decades before. Remember “All in the Family”? While a tv show, it addressed almost all social issues at the time, largely seen through the eyes of NYC residents. Archie was stuck in the past, just like the older folks in your home state were stuck in the past, and still largely are.
The NE cities had it far from easy, but they had it far easier than the rustbelt. I saw many friends go to work in the mills and factories right out of high school. And that was when the mills and factories were dying. Only the Vietnam War kept a lot of them opened, and when that ended almost all of them were laid off.
But they had options. Many were vets and could go to school for almost nothing. Those that weren’t vets could go to school for very little. For those not interested in school, many could find jobs where the income level kept them in the middle class, largely due to the union presence in those cities.
None of that applies to the rustbelt.”
I realize I have not posted at AB in a while and certainly not as often as I have in the past so you may have missed a lot.
Since 2007, my overall posting has been income inequality and how we changed the economy to one (as I coined it) of making money from money. Please take the time to read some of my past postings. I think you will find you jumped to a conclusion much too quickly.
Lastly, to your points, I’m hearing NPR discussions regarding AI and truckers (3 million of them) being without a job in the next decade.
Yeah, I get it.
You want rust belt? Let’s talk about Troy New York.
Once famously wealthy and a national center of innovations and manufacturing, due to its strategic location at the confluence of the Hudson River and the Erie Canal. GE was founded across the River in Schenectady in 1892.
Troy has been fading and bleeding it’s manufacturing base SINCE THE END OF THE CIVIL WAR, when railroads began to displace rivers as a fundamental mode of transport.
Honestly, nothing lasts forever and you can keep going back further and further in time to find these stories, like the whaling towns.
The issue is how do you move forward and what do you do with the rubble and broken lives when these inevitable shifts occur?
Welcome to Angry Bear. First time commenters go to moderation to weed out spammers and advertising.
What you are talking about is not surprising as Troy is about 1.5 hours west of North Adams. The whole region is rife with deteriorating cities and towns. I worked in Cazenovia for a few years when I could not get work in Michigan and was fortunate to be a Purchasing Manager there. My off times was spent exploring the area around Caz which was doing better than most around there. I went up to Utica looking that town over as Kahn detailed the Utica Blue Sox and I was nosey to see if anything was existing of the stadium. Looked around Canastota where Granziano’s is, the Boxing Hall of Fame, and a part of the 2nd Erie Canal is too. The home of Frank Baum in Chittenango is on that route too along with more of the canal. All things which are a sign of the past achievements and mostly no longer relevant other than being mile markers in history.
It is a great area to wander on weekends and hike the Link trails and go into the Adirondacks.
Russo of “Nobody’d Fool did a numbers of books about upstate NY towns like Gloversville which made gloves, North Bath, etc. Syracuse, Solvay are broken down and Lake Onondaga was the most polluted lake in the state from the dumping of waste from the plant in Solvay (forgot the name). I was born in Buffalo and my father’s family was all around there. They all worked for the mills. Near the Falls, Buffalo looks trashy in comparison to Clifton Canada. You can still see the remnants of the mills if you stand on the Hamburg Beach on Lake Erie.
To get home once a month I would take the US route through Erie and Cleveland. It does get depressing.
I think the days of working in the steel mills or the car factories making a good salary with just a high school education are over. Yea you could become a plumber, electrician, or a carpenter and do ok. There has to be schools for this too. My old high school used to have shops where you could learn these trades. They ended that and went to the other way. It is a highly sought after magnet HS now. There is a gap now for teaching meaningful skills to those who are not academics.
We have to start over again. I think the 40+ hour a day weeks are long gone as Sandwichman proposed in a different post a bit down the way here. Same pay for 32 hours, more rested, and greater producitivty. Anyway, my $.02
Yes, going further back proves nothing other than what we were.
Progress does change things, but in the past as tech was applied to manufacturing the productivity increases allowed more people to purchase the product as price falls. Thus more demand, more jobs.
If this is not the case, then all the discussion here at AB regarding the lump of labor fallacy being wrong, is…wrong?
With this, China did not grow it’s jobs base do to lack of tech being applied to manufacturing. This seems to be what keeps being left out of all these conversations about tech cutting jobs. At the same time, as China used it’s cost advantages (tech and otherwise) prices dropped, more demand more jobs.
Also, in the good old days that “are never coming back” we allowed consolidation every where. The chant was “economies of scale”. But, this has lead to less competition of ideas in the market place. This chant and the one that we are becoming a service economy (don’t want those dirty jobs anyway do you?) seemed to have been just a polite way of saying business was changing more to being financial (playing the arbitrage game, rent seeking etc within manufacturing) than actually meaning people would now be doing a different kind of work.
We talk of laziness. Well, American business got lazy. Way do the work of actually producing something and all that entails when I can just farm it our, own the licenses, sell off the assets and collect the rent/royalties?
We would not be so bad off if at the same time we did not consolidate retail also. At least the American work would have had a route into earning a living this way.
There will always be a section of the population that will not be able to get beyond high school to an associates. I believe it will be far larger than anyone likes to consider as the economic profession models the world. What are we going to do?
As far as entrepreneurship? It is not the solution. Especially today. Sophistication of what are lives have become make individual entrepreneurship being the savor as an entirely new sector of our economy is created that never before existed rarer to happen. And, if such does happen, progress seems to show it is a sector that fewer can capitalize within.
In the good old days, you could by a lathe, shaper/mill, casting equipement from Sears and start creating. Servicing the big/main industry as a foot hold in.
With all that, this nation is not investing in it’s self at all. We’ve just been sucking out the equity that was built up through the 60’s. Hell, as even Morning Joe said (not a big fan), we can’t even build a high speed rail.
So, yeah, we can’t go back. But that’s was not what I was suggesting. I stated: Recent as in only since the 1980 as if the non-northeast part of the rust belt could not have learned from the northeast.
Good Comments by all.
These authors give an exceptional review of what took place in the Northeast from 2000 till 2010 and then from 2010 to 2017 which is what we are discussing. Some of the areas like Buffalo went from losing jobs to gaining jobs. They also talk about the shift in jobs from the north to the south of the US which again is a valid approach. It happened. Here are some stats on job losses and gains:
Gary, the reader asked a question:
“I would be interested in theories regarding the cause of the decline; was it due to labor costs? Lack of manufacturing expertise – particularly regarding Hi-tech?
Why is manufacturing rebounding? Are costs equalizing with the rest of the world? Are tax policies having an impact?”
An Author (no name given – just Author) gives an answer:
“Thank you for your question. As we mention in the post, there have been two main drivers of the downward trend in U.S. manufacturing jobs. First, technological developments have enabled manufacturers to produce more with fewer workers; for example, by using robots or other computer-assisted technologies. Second, greater globalization has allowed the U.S. to import more labor-intensive manufactured goods from countries with lower labor costs. As to the reasons behind the partial rebound in manufacturing jobs since 2010, that remains an open question. Some of the factors you mention may very well be at play, such as rising labor and other costs abroad.”
I spent much of my life living in manufacturing facilities scheduling production lines, planning materials, purchasing materials, distributing components, and being in charge all functions done domestically and internationally (and yes Bert, I know what the bad side of China, Philippines, Thailand, Malaysia, etc looks like). Then I see this type of drivel from the experts which clues me in to the fact, “they really do not know.” I guess one could call it the rise of the Robots as Martin Ford used to write about when he was posting on AB. It has not reached that point yet other than a few programmed one-armed fenced-in Fanucs together in a cell to weld hoods to their supporting structure to go on Dodge Ram pickup trucks. Or perhaps, it was the creation of cells like my friend and mentor Ted Kusner and I did in Warren Ohio where Jesse James staged a holdup (as told to us) using 3 and 4 axis cnc equipment and manned by one person. It kept Warren Tool going for another 10 years before they were bought out.
Then they start the discussion over Labor, Direct Labor which is the smallest “ratio” of the cost of manufacturing being the cause of manufacturing leaving. It is not the cause and has not been a cost factor in a long time. It is the cost of Overhead in the US as compared to Asia or even the South for that matter.
Daniel, I guess you have never been to China’s rusltbelt either eh?