I stumbled across an op-ed at IndustryWeek by Scott Paul, president, Alliance for American Manufacturing. In the op-ed Mr. Paul points to some hints that the Obama Administration and, by extension, the Democratic Party are giving up on manufacturing as a force for growth in the U. S. economy:
My morning paper this week contained an unpleasant surprise. This passage, from a larger Washington Post article on the politics of the proposed Trans-Pacific Partnership trade agreement, caught my attention:
For decades, Democrats have pitched a manufacturing revival as the key to lifting millions more workers into the middle class. In recent months, though, some of the party’s leading economic thinkers have conceded that may not be true, because manufacturing employment is receding around the world as factories become more automated.
[…]
Does his [ed. President Obama’s] administration believe that the best days for “Made in America†are already behind us, or was it all just a cynical political ploy?
Meanwhile, what is to be made of the automation argument laid out in the Post article? Is it an inevitable force that will swamp factory jobs as we know them?
It’s an interesting op-ed and something to think about.
Just to add a little fuel to the fire, consider this chart from the Bureau of Labor Statistics. Private sector union membership, at 6% of the total workforce now roughly half of unionized workers, is holding its own only in financial activities, business and professional services, education and health services, and hospitality and it isn’t exactly booming in those areas.
In other words, manufacturing just isn’t that important politically to the Democratic Party any more.
Manufacturing is importantin flyover country.
I will post this link, but I am sure my fellow Zero Hedge reader (the PE Investor guy) would get around to it: Forget the TPP: Wikileaks Releases Documents From The Equally Shady “Trade in Services Agreement”
It is not by the Zero Hedge guys, and I have not been following them long enough to know their policies about submitted posts. The PE Investor guy should know if they endorse them or just pass them along.
I just skimmed it. There are too many links for me to follow, but it sounds scary. I usually am cautious about these things, but I do not use Zero Hedge as a primary source (or secondary, or …).
@Icepick
Thanks for the info on the name. I thought it was his real name. I saw the movie, and as usual, Brad Pitt is the man.
In the last third of article by Scott Paul, he discusses automation, and he explains how it does not decrease the number of jobs. With a growing economy, new types of jobs will be created in new manufacturing facilities and new service jobs will be created for them. In addition, the existing goods will become cheaper.
Unlike today, Americans will have good jobs and cheap goods. The difference is that the financial industry will not be quite as large. It might be Small Enough To Fail – horror of horrors.
Tyler at ZH is some crazy Russian/Russian-American former financial trader.
Is manufacturing of much interest to Republicans? I don’t see it.
Oh sure, Republican congressmen want to fire half the Federal bureaucrats who write so many useless regulations, and cut back EPA regulations, and eliminate OSHA inspections, and increase H1-B hiring quotas, and eliminate minimum wage increases, and increase support payments to ethanol producers, and make it easier for employers to lay-off redundant workers, and other Good Stuff that the K Street lobbyists bring to their attention. And yeah, it’s All About The Jobs-Makers and that sort of stuff. But this doesn’t seem to have much to do with actually wanting to see new manufacturing plants going up around the country, with millions of new workers assembling new products for sale around the world. It’s about increasing the profitability of already existing businesses, who find it easier and quicker and cheaper to pay off legislators with campaign contributions rather than pay for R&D and build new plants.
I think there’s a contributing factor in that modern day economists really don’t give a damn about manufacturing either. Macro-economists have a lot more prestige in academia and in government than micro-economists, and macro-econ types famously think government deficits and Fed Reserve-set interest rates are what determine economic growth, not the rise or fall of specific industries or business dynasties.
A left-wing example: remember the huge debates set off by Thomas Piketty’s book on 21st Century Capitalism last year; except as an influence on the profits of asset-holders, did Piketty concern himself with manufacturing policies in any developed states? I don’t recall any discussion.
A right-wing example: several years ago Tyler Cowen decided to look at slowing rates of economic growth over the last 40 years, in a book called THE GREAT STAGNATION. He concluded we had eaten up the “low-hanging fruit” of mass education, women’s entry to the job market, and modern distribution methods. The fall off in long term R&D that has characterized our society since the late 1960’s didn’t get a paragraph. Tyler isn’t interested in that sort of crap. The economy will improve some day, or it won’t, and that’ll be because it’s just what economies do. We don’t need no stinking policy! Because LIBERTY, right? Did this attract derision from Brad deLong or Mark Thoma or Paul Krugman or Larry Summers or any other left wing economist? You know it didn’t.
So, don’t blame Democrats alone for our long lasting economic woes. Both parties are to blame, and neither one has the least interest in changing course.
That’s irrelevant to this particular post. And nowhere in this post do I “blame Democrats alone for our long lasting economic woes”. Not every post is about everything.
This particular post is mostly just to point out the linked article which I found interesting, particularly this passage:
which echoes themes that are frequently repeated on this blog and pertain equally to both political parties. I dislike both parties’ policies on trade, taxes, research, training, infrastructure, and energy and my views aren’t particularly consonant with those of either party.
However, since the Democrats hold the White House and the clearest voice on public policy comes from the White House, it doesn’t seem unfair to criticize White House statements. I’ll criticize the Republican president if and when a Republican sits in the Oval Office.
“So, don’t blame Democrats alone for our long lasting economic woes. Both parties are to blame, and neither one has the least interest in changing course.”
I think you’re projecting. Dave is clearly not in the GoP camp.
As for your other comments, I’m a federal civil servant. IMO both parties are not interested in better governance or an effective civil service – rather, it’s all about interest groups. The Democrats are beholden to the civil service unions and their peculiar ideas, while the GoP wants to “starve the beast.” What is actually needed is significant reform but reform is something that is completely absent from the political discussion. How this translates into reality at the ground floor is doing more with less with little ability to prioritize.
The notion that the technology content of products or manufacturing inevitably leads to job loss is absurd on its face. Manual buggy-whip manufacturing anyone? The issue is, noted here in this post and thread, and any number of times previously, are the size of the pie issues, and their attendant friction to job change implications. Dave will write about the ordinary president a few post down the road. What has he done to deal with these issues? Nothing.
And sadly, Andy points out rather accurately IMO, “IMO both parties are not interested in better governance or an effective civil service – rather, it’s all about interest groups.” Meaning it’s about power, status and using the system for financial gain.
Which is why I always come full circle to smaller, more limited government rather than pure party affiliation. One might observe that many Republicans of a certain flavor are not happy with Mitch McConnell right now.
Of course we could always raise the minimum wage, forgive all student loans, soak the rich and disarm the cops and all would be peaches and cream.