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Comment by InclinedPlane | Hacker News Reader

The "American decline in manufacturing" is a myth. American manufacturing output has been on a continued uptick, the peak of output for the US was... 2006, and will likely exceed that shortly as the economy recovers. The US contributes fully 1/5th of the world's entire manufacturing output. What has changed is that US manufacturing has grown much more efficient, so there are far fewer manufacturing jobs than there used to be. Also, the US has grown much richer so we continue to import more and more goods.

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Right. The decline in manufacturing is a tricky subject. First off, in developed economies the manufacturing employee makes up less than 1/5th of the population. Let's be honest, manufacturing will never come back to developed nations like it was in the early 20th century.

We aren't "declining" in productivity. We've continued to increased productivity at the same historic rate as previous industries. (http://www.bls.gov/lpc/prodybar.htm)

We are accomplishing this productivity gain with less people. Increased productivity allows for companies to increase their output with less people.

As Peter Drucker predicted, if these productivity gains aren't matched in the service and knowledge worker sectors, then we'll see an increase in social tensions and class warfare. No one can deny the social acrimony that continues to surface in the news.

This will be the challenge of the 21st century. What to do with a nation that doesn't require a majority of its workforce employed in moving or making things.

They can still cut hair. Or teach. Or spend time with children. Or do comedy.

here's the data about manufacturing from the federal reserve:

http://www.federalreserve.gov/releases/g17/current/default.h...

http://www.federalreserve.gov/releases/g17/current/ipg1.gif

And other pretty charts in section G.17 Release Tables

Which of your possessions are manufactured in the US? Not many of mine are. No electronics I can think of, and not my cars or my furniture or 95% of my clothes.

When economic measures seem out of whack with observed reality, one should question what the numbers really mean.

You're forgetting intermediate goods - the fact that your computer monitor is made in China does not imply that all of its internal components are also made there.

You're also forgetting that consumer products are but a portion of total manufacturing output - industrial goods are also an extremely large segment of the market, and one where we have not yet lost the lead to the Chinese.

Though perhaps `lost' to the Germans. They sell lots of capital goods.

It means that the US is producing a lot of valuable stuff, but not much of it is durable consumer products like clothes or electronics. The US is, for instance, the world's number one aircraft producer by a significant margin, and one Boeing 747 is worth a lot of cheap Chinese t-shirts.

I used to work in US manufacturing. We built chips. The way it worked is that major fab operations, especially the ones that benefited from the close proximity of Ph.D.-educated senior engineers, were done in the USA. Then the parts would be shipped in wafer form to be diced and packaged in Asia because dicing, packaging, wire bonding and inspecting are human-intensive jobs that are hard to fully automate.

Hands-on work like sewing and hand assembly gets done in Asia where there is a good supply of cheap labor, but that doesn't mean that plenty of stuff doesn't get built in the USA, often with extensive help from robots and computers.

With the exception of Intel and TI, I think that "major fab operations" for most of the US semiconductor industry are now handled by TSMC, UMC and other foundries in Asia.

I'm sorry, but you're so very wrong. US haven't ever grown any richer since ~1980s. They just borrowed more with each month. You should see US trade deficit and annual budget for proofs.

The US has gotten richer, and has also borrowed more.

Since the 80s median family income has increased by about 1/3, adjusted for inflation:

http://en.wikipedia.org/wiki/File:United_States_Income_Distr...

I think the parent meant that the U.S. Government has borrowed more and more. It seems to me that you're talking about citizens being richer while parent is talking about the government being poorer.

http://globalpolicy.org/component/content/article/214/44197....

Build a graph from that data and you'll be very surprised, I guess.

1980 -- $1.3 trillion

2006 -- $12.8 trillion

[edit]: Oh, there's a graph actually: http://globalpolicy.org/images/charts/SocialEconomicPolicy/t...

How does this contradict my point? The US has gotten richer, and it has also borrowed more. The two are not mutually exclusive.

Today Bob borrowed $100 from Alice and earned $5 on his daily basis. Bob thinks he became $105 richer while Alice doubts that.

Individual income vs. government borrowing/spending are not the same thing.

Your analogy, corrected:

Today Bob's parents borrowed $100 from Alice and Bob earned $5 on his own. Bob thinks he became $5 richer, Alice is owed $100, and Bob's parents now have more debt.

Two things: 1. Bob's personal debt rose over past years too. 2. Bob's parents are the money issuers. When they decide they can't return their debt they probably make this money worth zero.

Whatever, I'm done with that thread, as HNers don't seem to approve :)

Yes it has - look at what kind of computer you could buy in 1980 and look at what you can buy now.

Heck most smart phones have more computational power than a 1980 computer.

So yes, the US has grown richer (money != wealth).

Unfortunately, a lot of this type of wealth generation isn't tracked by most economic measurements. Improvements in the quality of automobiles, entertainment systems, communication systems, etc. have been tremendous over the past decades, but almost none of that surfaces in statistics, mostly because to some degree such improvements are subjective and hard to measure quantitatively.

Too right. And not only that, but some of the goods and services we enjoy today didn't even exist not all that long ago.

Alice got $95 in her pocket and $100 credit in the bank. Can you say that overall she's richer from state when she had $5 in her pocket and $0 credit?

Then I guess Brooks is wrong. But any way you look at it discussing that "americans are abandoning technical enterprise" without mentioning offshoring is missing the point (if you are being generous) or intentional deception (if you are a bit more realistic).

Regarding the statistics of manufacturing supposedly growing they are misleading. I don't have time to explain why they are misleading but if you dont believe me you can just visit Detroit, or Flynt Michigan, or even Philadelphia.

I wrote 88 words, could you please do me the favor of reading them all? Honestly, there's no need to skim. As I said, manufacturing output has been increasing, but that's in spite of (or perhaps even because of) manufacturing jobs diminishing due to increased efficiency. That can lead and has led to areas of the country that used to be heavily dependent on manufacturing jobs being left at a disadvantage if they fail to adapt to changing circumstances, but that's always true regardless of whether the economy or a particular industrial sector is growing or shrinking.

Moreover, the problems of Detroit and Flynt are not entirely encompassed by the decline of local manufacturing jobs.

Yeah I read your entire post. Nevertheless it is misleading. If you look at American manufacturing as percentage of American consumption of manufactured goods it is going down. The fact is that while manufacturing does get more efficient, the demand for manufactured goods increases, so that usually there is enough demand for the products of a factory even if its efficiency increases.

The fact that Flynt and Detroit and Philladelphia are empty shells of their former selves is not because the goods they made are still being made in America but more efficiently, but because the goods they made are being made somewhere else.

*"If you look at American manufacturing as percentage of consumption of American manufactured goods it is going down."

I cannot parse this, what is your meaning?

I meant "If you look at American manufacturing as percentage of American consumption of manufactured goods ..."

Edited in original.

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