“No country, however rich, can afford the waste of its human resources. Demoralization caused by vast unemployment is our greatest extravagance. Morally, it is the greatest menace to our social order.” — Franklin D. Roosevelt
Manufacturing is dying. Manufacturing is leading the recover. Manufacturing jobs will disappear. This is a current conversation in the US, but I find people in all the developed countries, indeed even in China these days, concerned about the same thing.
I have been accumulating sources that include Martin Ford author of “The Lights in the Tunnel”, and Andrew McAfee (professor, blogger, and co-author with Erik Brynjolfsson of “Race Against the Machine”) for a column on this topic. The statistics references are to America, but they probably fit many countries.
If you look at manufacturing production, the long-term slope is positive. Indeed, the economic value of manufacturing is the backbone of the economy. Meanwhile, jobs in manufacturing have declined over several decades. Why is this? McAfee says in a recent blog post, “The conventional explanation for this phenomenon—and the one I believe—is productivity growth. American manufacturing value added was rising while American manufacturing employment was falling for a long time before 2007. In fact, both have been going on since the early 1980s, with remarkable steadiness.”
Martin Ford made the point in his book that automation was replacing all the jobs. In fact, he was quite pessimistic about the future of society if there were almost no jobs. Brynjolfsson and McAfee also analyze the employment situation in their book and spend the first few chapters in a rather depressing projection of employment. Personally, I have made an observation not based on facts for many years that manufacturing must surely parallel agriculture.
American agriculture is still a fundamental part of our economy—and of our quality of life. Employment in agriculture has dropped for well over a century.
One question to me is what is to become of unskilled labor? Take a look at some comments from McAfee’s latest blog from older manufacturing workers. “You didn’t need a high school diploma.” “You just needed to be a hard worker, and you needed to show up every day, because it wasn’t easy work.” “The skills I had weren’t really applicable”.
Part of the answer is to provide more and better education to more of our population. There are millions of jobs that require some sort of technical education. It may not always require a university degree, but it will require something beyond basic high school work. Let’s make more unskilled people skilled people.
What I like about “The Race Against the Machine” is that the authors do not end in pessimism. They offer what they call the “tip of the iceberg” of prescriptions. Here’s my summary of the top of the tip of the ideas:
• Invest in education
• Teach entrepreneurship as a skill
• Lower government barriers to business creation
• Invest to upgrade the country’s communications and transportation infrastructure
• Increase funding for basic research
• Reform patent system
I’m with them. We can all help with several of these.
One thing I'd like to see is the realization that education and learning is much more than formal education.
You should really start reading Walter Russel Mead's Via Media blog; I don't always agree with him, but he is almost always worth reading and thoughtful, and has done a whole series on "jobs of the future".
Thanks, Tony. I don't know that blog, but I'll subscribe now.
Almost my entire life has involved education and learning outside formal education. Appreciate hearing that feedback. One of my core beliefs is that a human being should never stop learning. I just took my 90-year-old neighbor out to lunch after taking her to a funeral for a mutual friend. Jean is still sharp and studies all manner of topics. (Not to mention she's the only other Democrat on the block, I think.) I knew a man like that when I was in high school. They are inspirations to me.
Gary this is a wonderful, well-written article that I will share with our LinkedIn and Twitter connections. One of the challenges in our industry (plastic injection molding) is that our machinists spend 4 years just to become a journeyman tool maker. It can take another 4 to 6 years to gain the experience need to build a tool from the ground up. That is a pretty big commitment in time and education.
Thanks for the note, Paula. I appreciate the description of the path to tool maker. These people deserve much respect. We also need to remind youth that there are some pretty cool and creative jobs out there to be had with a commitment to learning and hard work.
I believe the impact of productivity on U.S. manufacturing employment is substantially overstated. Check the studies by ITIF and others. The larger impact, the last 10 to 20 years, has been offshoring, costing about 3 million manufacturing jobs.
I hate to rain on your parade, but I work in a sawmill where the increasing level of automation over the last 30 years has dramatically changed the required structure of the workforce from 80% unskilled – 20% skilled trades to the opposite ratio along with the downsizing to less than half the number of workers required to produce more than double the output. The work ethic In these bygone days comprised of a willingness to do hard physical labour, take orders and show up on time.
The problem I see us facing is that many of those displaced unskilled labourers do not have what it takes to reach an education or skill level to perform many of the new jobs in the sawmill. I can't see all of them starting and running new businesses either. On the other hand, if we can "dumb down" the technology to the point where anyone can use an iPad, then maybe I am being overly pessimistic. But this leads us to a new class structure (struggle) in society. Intelligent, trained and skilled individuals who can get a jump on the technology versus those left behind (although perhaps they can find opportunities in right wing fringe politics 😉
Without enough opportunities to earn respectable livings providing worthwhile contributions to society, many of those left behind will no doubt find other far less desirable recreations. My tongue in cheek suggestion is to boost the economy now with public works of building more automated prisons to hold the offenders. On the other hand, if we want to progress as a society, I believe we have some diffiicult choices to make and they will include restructuring our cherished (and obsolete) belief systems about the nature of the work ethic and the systems we use to distribute an adequate income for living to all.
Thanks for another view, Harry. I know your organization and have written about the work it does. There is no doubt that the offshoring craze–probably instigated and perpetuated by Wal-Mart–cost a lot of jobs. Any discussion of the economy is necessarily going to round-off some of the complexity.
I am getting stories about executives realizing the problems and costs of a stretched supply chain, however, and locating jobs closer to the market.
One thing I try to emphasize in my writing to engineers is for them to learn the language of executives–finance. In a column that will be published in October in Automation World, retired Emerson Process Management CEO John Berra challenges engineers–if you can learn Laplace Transforms, surely you can learn a P&L and Balance Sheet. Why say this? To get engineers to raise their voices to places where it counts!
Hi David. Please read my next post after this one. Then please read Henry Blodget. His is the most sane voice I've heard on the economy this year. Oh, and I just throw stuff out there to challenge people. If someone responds rationally, I'm thrilled. I never want a day to pass without learning something.
I grew up with those unskilled workers. Actually, they had many skills, but maybe not the most employable. I worked on a lot of stock drag racers with them when I was a kid.
I sometimes avoid these types of topics, but I am frequently disappointed by the lack of ethics and morals I see among many business leaders. Where did we get the idea that not paying your workers is a good thing? I'll always believe that ethical behaviour is good business. It's also good for being able to live with yourself.
Training is one answer. That training need not be Ph.D. level. My grandfather rose from 15-yr.-old apprentice machinist to production superintendent in a GM plant to chairman of a bank. The loss of apprenticeship programs was huge to our people. Thankfully, I'm seeing some resurgence. Anything we can do to help is needed.
Blodget thinks that Obama's biggest economic failing was not realizing how bad the recession was–and that it would require much more investment to get out of than he asked for. You sort of tongue-in-cheek mention public works, but our country needs massive investment in infrastructure. Have you flown lately? Or driven? Current Tea Party thought says we don't spend for anything (sort of, unless it affects us personally). But just as in business you must make investments, the country needs to, also. And investments create jobs. Which creates tax revenue. And purchasing. Which creates jobs. And so on.
Blodget says, let's bring back the middle class. I'm with him on that.
Gary – I think the comparison with agriculture is an appropriate one. When our economy shifted from agrarian to industrial in the second half of the 19th century, there were similar growing pains. The labor movement and all of our educational institutions were created in order to facilitate that transition. We're in a similar, painful transition out of an industrial economy to an information economy.
I agree with many of those points listed. However, we need to be mindful of the fact that our educational system was designed to fill factories with competent factory workers. That's not what we need any more and the model doesn't work. The curricula and techniques need to be blown up and completely redesigned. I'm on the board of an innovative school that is doing just that. But it's very hard work and I'm pessimistic that it would work at scale.
But here's a completely different viewpoint from Robert Cringley put forth today: Stock market decimalization killed our economy. It's a little over my pay grade to offer a strong opinion but it's a fascinating concept.
Explaining greatly myths of manufacturing. Thanks for such a nice information Gary.