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vinsanity wrote:

Hungary Jack wrote:This isn't as much about a US decline as changing conditions in China, which were largely inevitable given the rapid pace of its industrialization. That said, I think it also reflects the US economy's ability to adapt and bounce back, at least in certain areas.

It's about relativity. Not long ago is was cheaper to produce in China, now it's cheaper/ish to produce in the US because China has grown relatively strong. If transportation becomes cheap and wages rise again, is there any reason to think these manufacturing jobs won't move overseas again?

They won't go to China or India. Perhaps Africa is next on the list for countries offering cheap semi-skilled labor backed by massive capital investment, but that seems a long way off.

vinsanity wrote:

Manufacturing industries create the types of ecosystems that spur large scale economic growth. These aren't cheap jobs. Manufacturing wages in small towns of $20-$20 an hour represent very good pay for local workers. The desk jobs you speak of are more likely found in cities like Chicago, focused on commerce and the professional skills required of marketers, supply chain managers, finance people, info tech managers, attorneys, etc. This is where urban public schools are really floundering--creating verbally, numerically and technology literate graduates who can get into these roles.

We agree on manufacturing industries completely. I like to see these jobs come back and I think that you will always have and need these types of jobs. But there are plenty of ways to keep manufacturing here and create these jobs, while also creating an economy that depends less on them. Toyota has chosen Canada over the US for some of these production plants because of better educated workers and not needing to provide healthcare. We need manufacturing here, but if we ignore the fact that for now production costs are worth it here since it's consumed here, when the tide shifts again (as you even said, cycles) having an economy that can innovate and create new manufacturing processes, can be productive in spite of more efficient manufacturing processes and create service level instead of production level jobs, we'll weather that shift better. Look at a city like Detroit.

There are all sorts of service based and desk jobs that don't need to be found in commerce, marketing, managers, finance, lawyers etc. You don't need to build a car to want to buy a cheeseburger - and someone has to raise the cattle, ship the beef, cook the meat and serve it to you on a plate. Sure some of the largest growth will and should be in areas of medicine, technology, finance and other industries you usually need a college degree to enter, but is that a bad thing? 15 countries are graduating more people with Science and Match degrees than we are. Is it any wonder the Germans, Swiss and Swedes seem to weather this crap better than most? And what do those scientists and engineers do?They build houses, buy cars and eat out.

I am not sure what you are arguing. Higher paying jobs are found in industries employing advanced technologies, which require considerable education. Cities, due to land and logistical constraints, are typically not centers of manufacturing, which tend to go to more rural and suburban areas. So cities like Chicago need to cater more toward information-based industries and jobs. This is where city schools fail miserably. Sure, there are still some manufacturing jobs around here, but relatively few.

Hungary Jack wrote:They won't go to China or India. Perhaps Africa is next on the list for countries offering cheap semi-skilled labor backed by massive capital investment, but that seems a long way off.

Either way, eventually production will be cheaper somewhere else again.

Hungary Jack wrote:I am not sure what you are arguing. Higher paying jobs are found in industries employing advanced technologies, which require considerable education. Cities, due to land and logistical constraints, are typically not centers of manufacturing, which tend to go to more rural and suburban areas. So cities like Chicago need to cater more toward information-based industries and jobs. This is where city schools fail miserably. Sure, there are still some manufacturing jobs around here, but relatively few.

That we need higher paying jobs and not just manufacturing ones, I thought you were suggesting manufacturing over service/college-grad types.

I guess I don't understand what you mean by 'city schools'? Are you excluding suburban and 'country' schools? 82% of the country lives in cities, so I guess you can blame them. Either way we either have a national issue with education or a cultural one.

Hungary Jack wrote:

vinsanity wrote:

Hungary Jack wrote:Some good stuff in here. I am old enough to remember when the entire US was freaked out about Japan Inc. taking over the US. My, how times have changed. But these things always move in cycles.

It's basic economics. It's now becoming more effective to produce in the U.S. than it is to produce in a lot of different countries. Between the shift in the dollar and the incredibly rapid rise in wages in China, people are starting to do this. In a report, we predicted that this would not happen until 2015. We're surprised in a very good way because we're starting to see it happen in 2010, 2011 and 2012.

I agree it's coming back, but we shouldn't need an economic collapse to create jobs here either. Even with jobs coming back we need, need, need to put a bigger focus on education. Even production line jobs are requiring more technical skills with the new machines and production materials. I'm not naive enough to believe everyone is cut out for a desk job or that everyone will be able to get a college degree. But the more "service" level jobs we can create in this country the less we'll depend on expensive transportation and cheap labor to keep Americans employed.

I don't think the economic collapse is the main catalyst. Productivity is also a key. Currency rates, transportation costs, quality and logistics issues, rising labor costs in China, and labor productivity all issues working in favor of the US right now. This isn't as much about a US decline as changing conditions in China, which were largely inevitable given the rapid pace of its industrialization. That said, I think it also reflects the US economy's ability to adapt and bounce back, at least in certain areas.

Manufacturing industries create the types of ecosystems that spur large scale economic growth. These aren't cheap jobs. Manufacturing wages in small towns of $20-$20 an hour represent very good pay for local workers. The desk jobs you speak of are more likely found in cities like Chicago, focused on commerce and the professional skills required of marketers, supply chain managers, finance people, info tech managers, attorneys, etc. This is where urban public schools are really floundering--creating verbally, numerically and technology literate graduates who can get into these roles.

$20 an hour in my small town would allow you to live very well if you didn't spend stupidly. In fact my employees make less then that and they tell me it's the best job they have ever have and they are quite happy. I'd love to be able to open some bigger manufacturing place here that could provide a few hundred jobs at $20 an hour. It would do wonders for the local economy.

vinsanity wrote:

Hungary Jack wrote:They won't go to China or India. Perhaps Africa is next on the list for countries offering cheap semi-skilled labor backed by massive capital investment, but that seems a long way off.

Either way, eventually production will be cheaper somewhere else again.

Hungary Jack wrote:I am not sure what you are arguing. Higher paying jobs are found in industries employing advanced technologies, which require considerable education. Cities, due to land and logistical constraints, are typically not centers of manufacturing, which tend to go to more rural and suburban areas. So cities like Chicago need to cater more toward information-based industries and jobs. This is where city schools fail miserably. Sure, there are still some manufacturing jobs around here, but relatively few.

That we need higher paying jobs and not just manufacturing ones, I thought you were suggesting manufacturing over service/college-grad types.

I guess I don't understand what you mean by 'city schools'? Are you excluding suburban and 'country' schools? 82% of the country lives in cities, so I guess you can blame them. Either way we either have a national issue with education or a cultural one.

My point is that there aren't a lot of these well paying manufacturing jobs in Chicago, relatively speaking. If you are some urban kid growing up here, chances are you are not going to get hired by a manufacturer with the prospect of making $15-20 an hour after 2 years of trade school. The best jobs in Chicago are in marketing, finance, information tech, law, etc.--professional type jobs that require extensive schooling. Healthcare is also a big employer that requires schooling.

The public school system is failing to prepare its graduates to embark on these careers, mainly be failing to prepare them for advanced studies at a local community college, which in turn is failing to train students for jobs requiring technology, information, and communication skills. The major has explicitly stated this in his recent plan to reorient specific schools around specific trades throw employer partnerships.

Hungary Jack wrote:My point is that there aren't a lot of these well paying manufacturing jobs in Chicago, relatively speaking. If you are some urban kid growing up here, chances are you are not going to get hired by a manufacturer with the prospect of making $15-20 an hour after 2 years of trade school. The best jobs in Chicago are in marketing, finance, information tech, law, etc.--professional type jobs that require extensive schooling. Healthcare is also a big employer that requires schooling.

We're saying the same thing I think, I just think there are more jobs in manufacturing/warehousing/production and even healthcare than you. People need to answer the phones, data entry, clean sinks, drive cabs etc. All jobs that are going to be the first trimmed when a bottom line is affected by demand - even if those manufacturing jobs are elsewhere. People in BFE, Indiana working an assembly line still need health care.

So we agree that we need more college degrees. I guess I don't understand your point about manufacturing jobs come back to America then? IMO it's nice, but unsustainable and we need to do a better job of educating people to take different jobs.

The manufacturing renaissance is very sustainable, IMO. It's not just a simple matter of foreign labor costs and cyclical factors. The Japanese quake exposed a lot of issues with having supply chains based overseas. Toyota's quality problems, concerns about Chinese drywall and lead paint in kids toys, perceived intellectual property risks, etc. have made manufacturing companies vary wary of outsourcing big parts of the supply chain overseas.

To your point, manufacturing employment is only about 10% of total employment (government is 20-25%), so it's not a big driver of employment. But the ripple effect of strong manufacturing is felt in high wages and better consumers, the rise of tertiary industries nearby, capital investment, and more stable employment.

But I don't think dense urban centers like Chicago are well positioned to benefit from this renaissance. It's more for places like Peoria, Lansing, the rural South, etc. than Chicago. And it's not so much college degrees as basic numerical and scientific literacy, verbal and written communication skills, and basic problem solving that our urban public school graduates are lacking. This is how burger-flipping becomes the career of last choice for these kids (or worse).

Hungary Jack wrote:The manufacturing renaissance is very sustainable, IMO. It's not just a simple matter of foreign labor costs and cyclical factors. The Japanese quake exposed a lot of issues with having supply chains based overseas. Toyota's quality problems, concerns about Chinese drywall and lead paint in kids toys, perceived intellectual property risks, etc. have made manufacturing companies vary wary of outsourcing big parts of the supply chain overseas.

So is it cyclical or not? I think some of the emerging markets will pull a China and as things move even more virtual you might seem some lower end "tech" manufacturing jobs go over-seas as well; i.e. remote control of machines and the like.

To your point, manufacturing employment is only about 10% of total employment (government is 20-25%), so it's not a big driver of employment. But the ripple effect of strong manufacturing is felt in high wages and better consumers, the rise of tertiary industries nearby, capital investment, and more stable employment.

Right, i think we're coming to the same conclusion from two sides. I'm seeing the aggregate manufacturing/trade types at closer to 20% (mining, transportation, skilled crafts and manufacturing) but growth there is going to help the large chunk of non-college grads get jobs and improve the consumer demand so the people they consume from will need to higher more/invest more in better/newer things.

But I don't think dense urban centers like Chicago are well positioned to benefit from this renaissance. It's more for places like Peoria, Lansing, the rural South, etc. than Chicago. And it's not so much college degrees as basic numerical and scientific literacy, verbal and written communication skills, and basic problem solving that our urban public school graduates are lacking. This is how burger-flipping becomes the career of last choice for these kids (or worse).

You keep going back to Chicago, but there are plenty of urban areas where the other 248M Urban Americans live that fit in this manufacturing area. It's not just places like Peoria. Not even counting the people who drive from the Chicago burbs out of the city work. But yes, the consumption from the growth of those new jobs is what's going to drive the economic recovery and Chicago and NYC might not be the first place they go. We agree. The new jobs will create a slow flow, a trickle one might say, of money "upwards" through the economic system. From the manufacturing workers to the company who needs more employees to keep up with new demand!

My only point is that depending on those manufacturing jobs to still be there in 10-20 years; the same assembly line position is dangerous. When recovery happens we need to greatly increase the number of STEM grads and jobs in this country.

So...is anybody worries about the looming transformation from the usd to something else as world reserve currency?

AWvsCBsteeeerike3 wrote:So...is anybody worries about the looming transformation from the usd to something else as world reserve currency?

There were some articles a few years ago speculating on a doomsday scenario involving central banks dumping the dollar in favor of the euro...

AWvsCBsteeeerike3 wrote:So...is anybody worries about the looming transformation from the usd to something else as world reserve currency?

No, it means little to nothing. There will be demand for our currency so long as we remain one of the most productive countries in the world. As long as people want to do business in the United States, they will want (and need) US dollars.