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Comment by wellthatsawrap1 | Hacker News Reader

I thought those jobs were never coming back!

All depends on the size of the factory. Too small - can't swallow the large pill which is automation (hiring engineers, consultants, very expensive equipment). But as soon as your payroll hits a certain figure, automation becomes cheaper and bang! small town everybody laid off.

And it isn't all that big a number really.

I don't know if I believe this POV, from what I've seen automation is an enabler to branch into broader product base.

I agree. Back in 2013 Frey and Osborne published a paper saying that 47% of US workers were threatened with unemployment from automation.

Here we are nine years later, and the prime working age employment-to-population ratio is higher than it was then[1], and unemployment is under half the 2013 rate.[2]

If automation is happening, it's probably increasing employment.

1. https://fred.stlouisfed.org/series/LNS12300060

2. https://fred.stlouisfed.org/series/UNRATE

Sure if 'employment' is slinging burgers.

The fact is in America at least, folks have been sliding down the occupation ladder for a generation. Somebody who used to manage a shift at a factory is now selling shoes or a security guard. An office manager becomes a McDonald's manager. And so on and so on.

So sure, be comforted by employment statistic, but remember that the govt has been obsessing over them for half a century, and they don't reflect wealth or happiness. Witness the fraction of us that can't afford a house.

Good points. Looking at one statistic in isolation is not going to give me a good picture. Thanks for the reminder.

Yes, automation causing unemployment is a myth that seems to be related to the "AI is going to eat us" Singularity people. Automation does the opposite, it creates employment.

https://noahpinion.substack.com/p/american-workers-need-lots...

Nah. 'Creating jobs' means "this factory doesn't need you or have a career for you, so go work someplace menial instead to put food on the table"

Its just a plain fact that manufacturing has a tiny fraction of the people employed that it did a generation or two ago. Blurring that with hopeful 'employment' statistics that ignore what kind of employment, is PollyAnna stuff.

You didn't read the article I linked, unless you think nobody in South Korea works in manufacturing.

I think he's implying that those jobs aren't for the "regular joe". I again don't agree with him based on my own experience.

> bang! small town everybody laid off.

The labor shortage is changing this calculus very rapidly. I’m not saying it can’t still happen but it’s much more likely that the factory is lacking people to fill in the wide gaps in the automation possible.

This is probably the reason. There was a spike in retirements during covid. But more importantly, the number of retirees by year is above average too: https://www.stlouisfed.org/on-the-economy/2022/january/great...

Let's not downplay the deaths due to covid and lack of immigration playing a role. It's almost never just the one thing.

The bulk of the baby boomers have just hit retirement age, we have a much smaller GenX to inadequately replace them on the experienced end, a career-stunted Millennial generation filing in the middle, and an even smaller than GenX Zoomer generation joining the lower ranks. It’s a mess, but if the Millennials catch up and have enough kids then we’ll have a light at the end of the tunnel in 20 years.

> if the Millennials catch up and have enough kids

This is a big "if" and as a millenial, I don't see any signs of people wanting to have more than 1 kid. They have struggled throughout our life and don't want to sacrifice more.

Atlas - or, in this case, Xi Jinping - shrugged[0].

Chinese manufacturing went through three phases:

- We can save money by moving our jobs overseas. Sure, it'll blow up our lead times and we'd have to ship goods across the Pacific thrice, but China has 3x the population of the US and the Yuan depreciation makes paying them very cheap.

- We can't move our jobs back to the US! We're all tooled up in China, and everyone else followed us there. If we moved back to the US it'd blow up our lead times and we'd have to ship goods across the Pacific thrice. Plus, we literally can't hire enough people in the US, because China is buying our product just as much as they make it now.

- We are moving production back to the US because our Chinese factory has been shut down for three months due to COVID and it ate through our buffer for shipping delays at the ports. Again. Yes, we will be paying far more for fewer workers, but getting goods across the Pacific is getting more and more expensive anyway and we're losing on money from not having goods to sell every other week.

We are at the third step.

[0] Yes I am aware of the irony of using the title of a right-libertarian political diatribe to describe the actions of a left-authoritarian dictator.

3rd step also includes political instability in China, an even riskier business environment, demographic headwinds along with rising wages and increased fixed automation costs everywhere. Globalization, once "inevitable", has been dead since 2019 and isn't coming back in the foreseeable future.

What happened in 2019 that caused globalisation to die? I remember the first volleys against it being the onset of the pandemic and border tightenings in Feb/Mar 2020. In 2019, COVID-19 still seemed like it might be a local phenomenon and most people outside of China had barely any idea that it existed.

2018 and 2019 saw increasing levels of tariffs apply to Chinese goods, all to force China into signing an FTA deal that never really got off the ground (and, IMHO, would never be fully adhered to by the Chinese side).

... for the supply of goods to the USA. For supply of goods to the Chinese Middle classes, India, Korea, Japan and emerging markets in africa (who mostly love Chinese investment in their economy without world bank moralisms) none of this applies.

Is the US market still the dominant target for Chinese factories?

I believe the emerging markets are mostly mad at China because, while they may not be moralizing with their investments[0], they're bad at managing them. Japan is actually silently doing better here.

https://warontherocks.com/2019/04/quality-infrastructure-jap...

https://www.cnbc.com/2019/01/18/countries-are-reducing-belt-...

[0] better not say anything about Taiwan though

Other than Korea and Japan, those markets will happily consume cha bu duo mediocre quality.

> We're all tooled up in China

And the PRC government forbids the export of tooling.

Can I get a citation on this please?

AFAIK, China exports a lot of machine tools, factory equipment and are known as a place you can outsource production of tools, dies, molds etc (which are then exported).

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