We aren't training them as much as allowing our companies to export our manufacturing centers overseas. As consumers, stockholders, and capitalists we hold CEOs to the bottom line. So, to make us happy with greater profit margins they go where the labor pool works for less, less litigation, no unions, etc.

We have a wonderful little potential in IT: there exists a capability to have a number of our workers work from home as programmers, database admins, etc. What we've done is outsourced this to India and elsewhere. I know as a father if I could work from home and not have to drive to work, spend time in traffic, the whole minor pollution thing, etc. I would jump on it. We can't because those jobs are gone.

So, do we become capitalists with morals and ethics and pay higher prices for our goods, or do we lose the jobs but pay less for those same goods since the cost to make them is now less? Also, what jobs do we as a country try to get back? All of them? A certain perentage? Certain types?

More questions than answers in this thread.

Something to chew on from McKinsey
 

Don't blame trade for US job losses

The enormous US trade deficit has caused many observers to conclude that international trade, particularly a massive flood of imported goods from China and of services from India, is to blame for the loss of US jobs since 2000. In fact, research shows that only 11 percent of the job losses in manufacturing—about 314,000 jobs—can be attributed to trade, and even in this instance the real culprit was falling exports, not rising imports. Offshoring in the services sector destroyed even fewer jobs. The real causes of job losses were weak domestic demand, rapid productivity growth, and the dollar's strength.

The take-away
Protectionism won't address the causes of the loss of US manufacturing jobs in recent years. The real solutions—stimulating domestic demand, cutting the budget deficit, and pushing countries with artificially low currencies to allow them to appreciate against the dollar—are harder to implement but more likely to boost employment.

Here is my attempt at a big picture analysis based on what I see around me.
Most high schools are getting rid of shop classes, no more mechanical classes, welding or machine shops. There is an attitude that it is above us to get our hands dirty.
Where do you think the captains of great (inovative, leading, etc.) industry come from?

Basics are basics, we aren't teaching people how to do "things mechanical" anymore. This will take a generation to play out.

How much of a percentage loss in these skills will make the difference?
Of course there will always be those "that can''.

For starters, Beijing needs to decouple the yuan from the dollar. Since 1994, China has pegged the yuan at about 8.3 to the dollar. As the dollar started falling in 2002, the yuan rode right down with it, and China got a free ride. Some economists estimate that the yuan is under-valued by up to 30%. Some numbers:

- China's economy grew 9.5% in 2004
- China's exports grew 35.4% in 2004, totaling $593 billion
- China enjoys a bilateral trade surplus with the US of $162 billion
- China's annual trade surplus is $32 billion, so it's importing a lot too

Moving right away to a free-floating yuan is not going to do anyone any good, since the world does not need another Asian financial crisis. Economists have suggested a two-step process, starting with increasing the band in which the yuan is allowed to trade from 1% to 5%, then pegging the yuan to a "basket" of foreign currencies consisting of the monies of China's top trading partners.

I'm all for globalization, but everyone has to do their part. The Euros are wailing as the dollar continues to plummet. This is making their exports non-competitive, thus hurting their economies. But if they would fix their economies and generate domestic demand, they wouldn't depend so much on exports. Then they can start buying more great American imports. This is the "growth deficit" mentioned by Secretary Snow, and helps explain the US nonchanlance with the dollar's fall. Japan is still stagnant, as are other Asian economies. That's part of the reason why even though the dollar is weak, we are not seeing a significant improvement in our trade deficit.

Of course we deserve most of the blame for our trade deficit. Americans cannot resist spending, with a lot of money going to imports. But then that spending helped to prop up the economy, so there's no easy answer. If we can somehow break out of the addicition and save more, we would be better off. Maybe it's time for a consumption tax like a VAT. :munchin

Try and find a tool and die maker or a sheet metal former these days.

Look at the numbers from 30 years ago in these trades versus now, and the average age of those workers today.

Note also the excellent wage that unions demanded for those workers.

While they helped make the workplace much safer, they have also killed the goose that laid the golden egg.

"Them jobs are going boys, and they ain't comin' back.

To your hometown."

TR

I agree. I don't think we'll see the effects in a few years, more like 15-20 or so.

What I'm curious about is when the jobs go what will those workers do and how will the wages of their new jobs stack up against the old job?

We are becoming a counsumer nation and not a manufacturing nation.

Service industry, for a while.

Then those jobs will be exported to the extent possible to where wages are cheaper.

Think the rest of the world's wages will rise to meet ours, or ours will fall to meet theirs?

TR

vsvo,
Good point. That is a big issue.

I've personally watched a particular industry race to China even while the "home" factory could compete and do well against overseas production, already having all the skilled employees in place and working.

The reason stated is that's it's "easier", no messy employees to deal with.
Yes that is just a few hundred American jobs gone, never to come back.

I've already seen "spin-off" companies succeed because the business concept was taken overseas and the folks TRAINED by United States companies figure out how to do it without them.

The UPS just came by a few minutes ago to drop off the 130 US dollar power screwdriver I ordered for assembly/disassembly of all the screws in folding knives. I bought a Metabo brand tool because it was a German based company (quality tool) and it was the only tool that has that much torque in a small package suitable for working at the bench with.
Country of origin, PRC.


I can't win.

NDD,
I have nothing against any other country producing goods/services at any level of quality for the world market.
My concern is that this nation is not doing the things that keep us competitive and fear is that it is going to hurt us.

Even that damn Metabo driver looks like a good tool and I'm not sending it back unless it fails.

My question relating to the Globalization is this:

How important is it to the security of any country is it to be able to produce their own stuff?

That depends on what that country's role is.

TR

A good example is the article in Scientific American about a year (+/-) ago when the last US manufacturer of rare earth magnets was bought during a corporate merger and then divested to a Chinese firm. Who promptly packed up the entire manufacturing facility and shipped it to China in SeaLand containers. BTW - most/all of our most sophisticated weapons systems and delivery platforms depend on rare earth magnets, usually in the guidance system. Congress complained and nothing happened, IIRC. FWIW - Peregrino

Peregrino,
That's an interesting example.

This is something of a hot button topic for me. Free trade only works when the parties involved play fairly. China, and to a lesser extent Europe are waging economic war on this country, and we're happy to sell them the bullets to do it at everyday low prices.

China has issues that make it not just "difficult", but impossible to compete with. They have NO incentive for production efficiency because of their infinite labor pool and full employment policy. If they have to have 5 people to do the job of 1, so be it. If they have to use 5x the resources to produce quantity X of product, so be it.

They actually have reason to not be interested in efficient production. But they use their banking system and government like a weapon, fronting the money to buy whatever is needed to remain in the market, and artificially compensating to stave off negative feedback like the export effect. They can't do this forever, but they don't HAVE to. All they need to do is keep it up long enough for the other economic powers to drop out.

The europeans have almost had it. They didn't cheat by devaluing their currency, and the export effect has bitten them in the ass. Now all they can do is use indirect tariffs and subsidies to keep afloat, and even that isn't working.

I give it 2 years until gasoline costs more than $5 per gallon in the US because of Chinas inefficient use (and thus excessive buying) of oil. Ask yourself what that is going to do to the US economy? Somehow we've managed to absorb gas prices in the $2 range without an inflationary spike, but I thnk that's going to change this summer as prices get into the mid to high $2's and low $3's.

Sound a bit negative? Does to me too, but that's how I see it.

It's business. You train others to do your job so you can move up into another function.

But it doesn't entirely work.

Industries that moved to China (Knits, sports shoes, harddrives) have moved back to Thailand. Malaysia and other nations, because of that inefficiency... because it creates quality issues that negatively impact on bottom line.