US manufacturing job loss

[ltcoljt]

On the shaky assumption that there are some smart people here I propose a question. What will be the long term effect of the loss of manufacturing jobs to third world countries on the American economy?

Given the corresponding loss of tech jobs...IT outsourcing for example, I think the outlook for America is dim. I mean, a service economy can only go so far right?

Of course there is plenty of American capital that can be used anywhere, but prospects for American labor seem limited.

 

[Hayek]

US economist Milton Friedman said this about jobs going overseas in an interview a few months ago:
Well, they only consider half of the problem. If you move jobs overseas, it creates incomes and dollars overseas. What do they do with that dollar income? Sooner or later it will be used to purchase US goods and that produces jobs in the United States.

In fact, all of the progress that the US has made over the last couple of centuries has come from unemployment. It has come from figuring out how to produce more goods with fewer workers, thereby releasing labor to be more productive in other areas. It has never come about through permanent unemployment, but temporary unemployment, in the process of shifting people from one area to another.

When the United States was formed in 1776, it took 19 people on the farm to produce enough food for 20 people. So most of the people had to spend their time and efforts on growing food. Today, it's down to 1% or 2% to produce that food. Now just consider the vast amount of supposed unemployment that was produced by that. But there wasn't really any unemployment produced. What happened was that people who had formerly been tied up working in agriculture were freed by technological developments and improvements to do something else. That enabled us to have a better standard of living and a more extensive range of products.

The same thing is happening around the world. China has been growing very rapidly in recent years. That's because they shifted from a very inefficient method of agricultural production to something that comes close to the equivalent of private ownership of the land and agriculture. As a result, they've been able to produce a lot more with many fewer workers and that has released workers who have come into the cities and have been able to work in industry and other areas and China has been having a very rapid increase in income.

I find that a good answer to the question.

 

[ltcoljt]

Well, I don't quite buy it. The step from farming to factories was fine but to what do the workers go to from factories? What goods will the US be producing that will replace the jobs we are losing.

Plus we have the immigration problem.

 

[Hayek]

Originally posted by ltcoljt
Well, I don't quite buy it. The step from farming to factories was fine but to what do the workers go to from factories? What goods will the US be producing that will replace the jobs we are losing.

Plus we have the immigration problem.

There are no limits on what man can achieve. Therefore, something will eventually replace factories (they aren't even as important today as they have been before to employment in the US, if I'm not mistaken). I don't quite know what you mean by the "immigration problem".

 

[Double Barrel]

We will all be selling each other hamburgers and cheap Chinese goods within the next few years, and our economic might that resulted from our strong industrial sector will dwindle to nothing.

Add the massive burden that private citizens must carry to support the bloated government at all levels, and the future is dim indeed.

Government employees in this country already greatly outnumber the workers in manufacturing jobs, and government produces NOTHING but huge debts, massive amounts of red tape through over regulation, and bigger government. It is a beast that only grows bigger and bigger at the expense of GDP.

It is like sitting at a table playing poker with nobody joining the game. Eventually, all the money will be in the hands of one player and the rest will be broke. We, the American citizens, have been sold out by our "leaders" to various lobby groups that make the politicians rich but undermine the economic power of our country. Selfish bastids!!

I think the "immigration problem" he might be speaking of pertains to the illegal immigration that is draining our social services supported by the American taxpayer. But I could be wrong.

***edit: spelling***

 

[Enemy Ace]

The problem, as I see it, is that these factory workers are going from their $20+ an hour jobs and getting "shifted" to jobs making sometimes less than half of their former pay. So it may be fine for the economy, but the average worker is shaking in his/her boots.

 

[ltcoljt]

Yes, Ace, exactly. And yes, illegal immigration not only eating up services but also filling low paying jobs which both deny those to legals and also keep wages down.

 

[vonork]

Well, in the long, long future when globalization has past around the world. The world as a hole will be richer but the "poor" will also be divided among us all. So yes tecnical some americans might be "worse" of, but than only to the future standards of living - that prob is better of from todays standard of living - unless we loos control over capitalism as a system... then we might have a bleek future for poor people.

 

[luiz]

Services are already responsible for the majority of the american economy. The real profit is not in the industry, it is in developing new technologys and patents. And it pays better then industry jobs, too.

 

[vonork]

About immigrant that take all of our jobs... well to quote an lituanian <- you now that east europe country alongside russia.

somthing like this was said: "I don't want to join the EU cuz then they will only come here and take all of our jobs."

Strange I remeber to hear the same about them joning the EU, but from our side... Exnophobia exits everywere, but that does not make it true.

 

[ltcoljt]

Well, we have lost 3 million jobs and thats real.

 

[metalhead]

Gained back almost half a million in the past 3 months.

 

[ltcoljt]

But many of those jobs pay less. I know many people who either lost jobs and replaced them with jobs that pay less and many who are going back to school after losing jobs. I don't know how many that are taking nursing training. If there are going to be enough jobs for all these new nurses we are gonna have to be sick a lot.

In the city where I work now 3,000 people were permanently laid off in one day. That was probably >5% of the population. This is brutal. Those were all manufacturing jobs that will never come back.

 

[metalhead]

Well, I know for a fact that there is a shortage of nurses that is reaching critical mass. Hospitals simply can't hire them fast enough, so your friends will have no trouble finding work in that field, believe me. Especially with the baby boomers getting on in years, the need for nurses will be several million nationwide in the coming years.

As for the manufacturing jobs, the reality is that people are going to have to learn a new set of skills. If you look at the proliferation of colleges across the nation over the past 30 years or so, it becomes apparant that we have been prepared for such a shift all along. Not that it doesn't suck for the people who rely on the manufacturing jobs, but the reality is that the market for that type of labor is dwindling while markets for different types of labor are opening up. People who don't keep up will get lost in the shuffle.

Overall, however, This doesn't mean an overall loss of the amount of jobs available. It means that differet skills, requiring brain power instead of muscle power, are what will drive the job market.

 

[EzInKy]

Originally posted by ltcoljt
But many of those jobs pay less. I know many people who either lost jobs and replaced them with jobs that pay less and many who are going back to school after losing jobs. I don't know how many that are taking nursing training. If there are going to be enough jobs for all these new nurses we are gonna have to be sick a lot.

Many of us went through the same thing in late 70's early 80's. It may take a working a lot of hours at a lesser wage and reeducation, but people do survive these downturns. Personal service, finance, and technology will all be the mainstay of the economy for the foreseeable future. As for nursing, baby boomers are beginning to enter their senior years. There will be a need for healthcare workers for the next few decades.

 

[Archer 007]

Manufacturing will go to the third world due to free trade and other open labour practices.

 

[Double Barrel]

Great, we'll all be serving each other hamburgers, selling each other cheap Chinese goods, working for the government, and / or changing each other's bedpans.

The service industry is only an exchange of capital, but does not create anything to bring in new funds.

Sure, people will find new ways to survive, but at the current rate of manufacturing job losses, the middle class will cease to exist. We are already the highest debtor nation in the history of the world, both on a personal finance level as well as the deficit spending of our government.

What happens when the national deficit is so large that our government cannot make the payments on the interest of that debt???

Bankruptcy of our government, which cannot be a good thing.

 

[luiz]

Originally posted by Double Barrel
Great, we'll all be serving each other hamburgers, selling each other cheap Chinese goods, working for the government, and / or changing each other's bedpans.

The service industry is only an exchange of capital, but does not create anything to bring in new funds.

Sure, people will find new ways to survive, but at the current rate of manufacturing job losses, the middle class will cease to exist. We are already the highest debtor nation in the history of the world, both on a personal finance level as well as the deficit spending of our government.

What happens when the national deficit is so large that our government cannot make the payments on the interest of that debt???

Bankruptcy of our government, which cannot be a good thing.

As I stated, the majority of jobs is already are in the service sector. And services don't pay less then industry, quite the opposite. First world economys in the XXIst century will be focused on specialised services and tech-related jobs, and this will make you even richer.

There will be no major external debt, since the products made in the third-world will belong to first-world corporations, and thus there will be royalties.

Everybody can profit form free-trada, and IMO the rich profit even more.

 

[SanPellegrino]

Originally posted by luiz


As I stated, the majority of jobs is already are in the service sector. And services don't pay less then industry, quite the opposite. First world economys in the XXIst century will be focused on specialised services and tech-related jobs, and this will make you even richer.

No, Double Barrel is right: "The service industry is only an exchange of capital, but does not create anything to bring in new funds." How much new wealth will be produced if we cut each others hair all day? none, but if we build a wood house we made something that will last for a while, exact the same here, outsourcing of industrial jobs is the decline of western nations, situation here in Germany is maybe even worse than in the US.

 

[ltcoljt]

I agree, what goods are we going to export? I see the US export tech that is then used to manufacture goods that we buy back. Even our defense systems depend on foreign imports, which dangerous. Profits from our corporations go into CEO's pockets or to already wealthy shareholders.