From an economic perspective, however, there can be no revival of American manufacturing, because there has been no collapse. Because of automation, there are far fewer jobs in factories. But the value of stuff made in America reached a record high in the first quarter of 2016, even after adjusting for inflation. The present moment, in other words, is the most productive in the nation’s history.
.. One of Trump’s keynote proposals is to encourage domestic production by taxing imports — an idea more likely to cause a recession than a manufacturing revival.
.. According to the Bureau of Labor Statistics, there were 64,000 steelworkers in America last year, and 820,000 home health aides — more than double the population of Pittsburgh. Next year, there will be fewer steelworkers and still more home health aides, as baby boomers fade into old age. Soon, we will be living in the United States of Home Health Aides, yet the candidates keep talking about steelworkers. Many home health aides live close to the poverty line: Average annual wages were just $22,870 last year. If both parties are willing to meddle with the marketplace in order to help one sector, why not do the same for jobs that currently exist?
.. The manufacturing boom of the postwar years was an oddity, and there will be no repeat of the concatenation that made it happen: The backlog of innovations stored up during the Great Depression and World War II; the devastation of other industrial powers, Germany in particular, which gave the United States a competitive edge.
.. The old working class still controls the megaphone of the labor movement, in part because unions have struggled to organize service workers. Manufacturing was, logistically speaking, easier to organize. There were lots of workers at each factory, and most knew one another. Service work is more dispersed and done in smaller crews.
.. The Harvard economist Lawrence H. Summers estimates that by midcentury, one-third of men in their prime working years, between the ages of 25 and 54, will not be working.
a16z Podcast: Software is What Distinguishes the Hardware Winners
Will Car companies become like Foxconn — stuck assembling commodity hardware?
.. Smartphone components have become a kind of Lego kit for all kinds of consumer technology. Cameras, sensors, and batteries all get mixed and matched in different permutations to create different gadgets. It might be something that enables your connected home, offers a video capture system for cops, or powers a remote video chat/treat machine for your dog (I know, we all need that). But since practically every component is now available to everyone — and the manufacturing expertise to tie it all together as well — it becomes very hard to distinguish via hardware alone.
Software is the key to breaking from the pack, say Benedict Evans and Steven Sinofsky in this post-2016 CES podcast. What Benedict and Steven saw and learned from this year’s gathering of the consumer electronics industry in this segment of the a16z Podcast.
Could the U.S. Really Gut Its Trade Deals?
Trump and others vow to pull out of the TPP and beef up tariffs, but that wouldn’t stop companies from continuing to move jobs to where labor is cheapest.
the U.S. doesn’t have a bilateral trade agreement with Vietnam, but companies still make things there and sell them here. They do that because the standard-of-living is lower in developing countries, and workers are willing to work for lower wages.
.. The tariffs on textiles are actually among the highest that still exist, Chad P. Bown, a senior fellow at the Peterson Institute of International Economics, told me. But companies still make clothing and shoes overseas because it requires a lot of labor to do so, and labor is much cheaper outside the United States.
.. The average tariff rates in the United States have declined from 18.4 percent in 1934 to 1.3 percent in 2007
.. as trade experts like Daniel Drezner have pointed out, the U.S. manufacturing sector isn’t exactly in need of a revival: Output has actually grown since 1990. But technology has made the sector more productive, so even as factories produce more, they need fewer people. Economists have calculated that 80 percent of the loss of manufacturing jobs in the U.S. is due to technological progress, while just 20 percent is due to trade
The Economy Is Rigged, and Other Presidential Campaign Myths
When do you think manufacturing output reached its peak in the United States? The answer: right now. Manufacturing output achieved a record high in the most recent quarter of data. The nation’s manufacturers are now producing 47 percent more than they did 20 years ago.
What has declined is manufacturing employment, which is 29 percent lower than it was 20 years ago.
.. Inequality rises when the innovations that do occur are used by skilled workers and replace unskilled workers.
.. Clearly, the wealthy and powerful try to protect their interests, and they sometimes succeed. But the economy is a complex, decentralized system. Many outcomes are under no one’s control.
.. Just once, I would like to see a candidate with a platform of humility: “Vote for me. If elected president, I won’t make a nuisance of myself.”
That doesn’t offer the inspiring vision of greatness that we have come to expect from our presidents. But by expecting too much, we set ourselves up for the inevitable disappointment that follows.