Why the Jobs Aren’t Coming Back

The “modern day marvel.”

By James Murray:

The candidates in the current campaign – or any campaign – are all promising to “bring back good jobs” to “create good jobs.” When asked how they would do that, they are all a little light on details.

About a year ago, Joe Biden was in Michigan to celebrate the opening of a new manufacturing plant that made “small metal clamps” used in all kinds of industries to hold wiring, hoses. Etc. in place. The largest market is the auto industry but they are sold to hundreds of other manufacturers. Depending on size, shape, and material, these parts sell for a few pennies or less. You have to make a lot of these parts to have any substantial billing numbers.

This new plant is fully automated and runs 24/7/365 with just 14 people. Joe was quite happy saying “manufacturing is returning to America.”

However, there is a backstory. That plant had been around for years. It had employed 600 people on two shifts. Then, the Chinese began to undercut the pricing, and the plant was no longer profitable and closed. Two years later, it reopened as a fully automated plant and regained the business because it could now manufacture cheaper than the Chinese.

There are several stories inside the main story.

The first story is about the initial plant closing. Anytime 600 people lose their jobs, you know that some employee ended up losing their home, that some cars were reprocessed, that some college kid had to quit school, etc. Retailers got hit. Utilities at the plant were no longer needed. Suppliers got hit too.

Closing a plant that large takes down a chunk out of the local economy, and the ripple effect is huge.

The second story is about the new plant. It only has 14 employees, but that’s 14 employees that were not there before. I’m sure that the payroll for the 14 employees is a lot less than the payroll for 600 employees, but every little bit helps.

Some of the other missing stuff returned. The plant is using raw materials again, probably more than before. The power company is happy because the power bill is back…. It doesn’t affect the 600 people that were laid off, but the 14 people who do have a job are probably happy.

However, there is a third story, and that is about the plant itself.

Some people look at the new plant as a “modern day marvel” but it really isn’t. Most of the equipment inside can be readily bought on the open market. The “marvel” is tying it all together and getting it to work and that is not all that difficult either, it just takes time and money.

There’s a lot of hidden savings in going this way also. When you have 300 people working on a shift and you have 2 shifts, you have to have parking for more than 300 cars because at change over, shifts overlap. You have to have a big lunch room. You have to have some big bathrooms. All that space costs money and does nothing to add to production.

When you have 14 people scattered over 4 shifts a week, you can park them in a tiny area, the bathroom space shrinks drastically, and the “lunch room” can be a table and four chairs in a corner somewhere.

If you have 600 people, you have to locate near a population center in order to have workers. With 14 workers, you can afford to pay them moving expenses to live close to the factory. Land is always cheaper outside the urban areas.

The new factory was rebuilt on the old factory site, but nothing says that has to happen. You can drop that factory in some rural area with cheap property taxes, move 14 people and you are in business. All you need is a good road to the plant for deliveries and shipping and adequate utilities. In fact, you can duplicate that factory almost anywhere in the world and get the same results.

In the past, if you wanted to build a factory to make “small metal clamps,” you got the permits, bought the land, built a building, installed the equipment, and then had to hire and train 600 people. From the time that you started hiring until you got the plant at peak efficiency could easily be a year.

Today, automation has become a commodity, something that you can basically order and get delivered. You have fewer people to train and a quicker startup time, and the savings are tremendous. Now, instead of having to take a year to get people trained and rolling, you can start a plant a day after the installation is completed. There will be some problems, but they generally can be sorted out in a couple of weeks.

You hear people saying “We’ll manufacture in the US and export to the rest of the world.” That doesn’t work anymore either. If “small metal clamps” are needed in Africa, it is a simple process to just build a duplicate plant in Africa, find 14 people to run it, and you are in business in Africa.

Those 600 jobs at that plant are never coming back. Not today, not tomorrow, not ever.

Even if all 600 people that lost their jobs had the necessary qualifications to run the new plant, there are only 14 jobs. 586 people would not have an opening to apply for.

These politicians talk about “creating new jobs.” This is a classic case of what is happening. 14 new jobs were created but they replaced 600 old jobs in the process.

If you listen to the politicians, you get the impression that someone slipped into the US, stole jobs, packed them up, and shipped them off to China, Mexico, etc. Politicians tend to infer that all we have to do is just go get the jobs back, and everything will be fine. But jobs like those above didn’t “go” anywhere. They vanished and will never reappear. By James Murray.

For companies, it’s just a question of money. Read…  The Endpoint of Automation

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  216 comments for “Why the Jobs Aren’t Coming Back

  1. John Doyle says:

    It’s been said more than once that 50% of today’s jobs will not exist in 20 years or so. It seems we are seeing that already. So what are we going to do? There will be great pressure on the Fed to pay a living pension to all those redundant workers. They can technically do it but it depends on adequate fiscal space. Now that this trend is unstoppable, the future of work is entirely up for discussion. Our civilization is crashing and we make no plans to cope leaving us to behave like headless chooks.

    • Harrison says:

      Nah…most jobs today didn’t exist 100 years ago.

      The only reasons people pine away for manufacturering is because those jobs paid a middle class wage.

      • polecat says:

        So does that mean that we are all going to become the american version of dalits …. doing only menial and disgusting work for less than a pittance ….. living in hovels and new-age favelas, while those ‘lucky’ few snub their noses at the ooze that was once the former middle class ??

        • David G LA says:

          Aren’t we already there?

        • EVENT HORIZON says:

          Nobody has a “right” to a Middle Class lifestyle. You are lucky to even have the “right” to work.

          One does have the “right” to create their own job, open their own business, move up the ladder with more work.

          The concept of a “Middle Class” is unnatural. We had the odd existence of over paid labor due to serious World Wars that eliminated our Competition: England, Germany and Japan from around 1914 to around 1965. That is why these were the glory years for the Middle Class. We lived high since we over-charged the world for steel, electronics, etc.

          We manufactured over 50% of the world’s products with something like 6% of the world’s population. They all HAD to buy from us and they had to get dollars. (This is why War is very profitable and beneficial for all those who survive).

          I remember living overseas (I was born overseas) and the DOLLAR was king. My cost for a first-run movie? 15 cents American. A $5/week allowance for a 10 year old in Germany was like getting $500 a week. Today, $5 won’t get you a Whopper in Frankfurt.

          The problem with this discussion is that it is based on the false-hood of “Middle Class”. That was the illusion . Things are just reverting back to the norm. Your “labor” is only worth what it costs to feed you and get you to your labor job, and it has always been that way.

        • John Doyle says:

          Do you really think our whole purpose is to just work? This flawed idea is simply destroying our home, our little blue marble. We should be seeing the writing on the wall by now.
          No one has any birthrights. No one even asked to be born. The concept of a middle class being unnatural is just ridiculous. So there are natural classes but not a middle class??? Labour is always a negotiation. Industrialists paid as little as they could. Organised labour achieved a living wage, but it’s always a battle. And it’s doomed. Our little blue marble is fed up with this locust species pretending to be superior.

        • Replying to Event Horizon

          RE:Nobody has a “right” to a Middle Class lifestyle. You are lucky to even have the “right” to work.
          While you may be correct, this implies that the “rich” don’t have a right or entitlement to their lifestyle either. This is a very slippery slope, and as 99% is much greater than 1%, spontaneous redistribution efforts frequently occur. You can as the French and Russian nobility how the informal sharing programs work. They must have been pleased, as there were very few complaints…

        • Marcus R Benson says:

          Yes so start bowing down!
          Being a Serf isn’t too too BAD!

      • Nat says:

        Baloney. Only the details of jobs have changed for most of the last 100 years.

        The number 1 employment in about 30 or so states is truck driver. Sure there weren’t trucks 100 years ago, but that is just a deatail because that same effective job has employed a similar % of the poloulation relative to goods available for shipping since the beginning of time. Not so when automatic trucks take to the road.

        Also look at top employment in the so called “professions.” The major employers there are still: doctors, lawyers, accountants, etc… and these are the same ones going back to the enlightment or perhaps earlier. There is only one major employing profession added in the last 100 years and that is programmer.

        There are very few new types jobs created in the last 100 years that offer significant employment relative to the population. In the next couple of decades whatever pinch of new jobs that get created will be nothing compared to the sea of dead jobs they leave in their wake.

    • Kam says:

      This article is flawed. 14 people on the plant floor maybe, but a lot of technicians around to keep the automation flowing. And marketing and distribution.

      Plus automated plants don’t build themselves. And taxes collected in America. And profits earned in America. And support services all in America.

      And there and damn few plants where automation can cut 600 jobs down to 16.

      • Unitron says:

        Good point. If it’s that easy to manufacture, why doesn’t Apple make iPhones in this country? More to the point, why should Apple be allowed to ship its products into this country freely when they could just as well make them here? If Apple only wants to employ administrative personnel here so it can save a few dollars on an iPhone, why should they be given full access to our market? Treat them as a foreign importer, and reciprocate all trade restrictions put up by China, Japan, and all the other trade surplus countries. Globalism is designed to benefit international companies and improve executive bonuses, nothing more. If a package of socks that cost $1 to make in Vietnam is sold for $15 here, what’s the benefit except to the retailers bottom line? An automated plant in America that could do the same thing here would still generate a lot of jobs.

        • George McDuffee says:

          RE: If it’s that easy to manufacture, why doesn’t Apple make iPhones in this country?
          One of the main reasons seems to be tax evasion. Hard to do if you produce and sell in the same country. Easy to do through transfer pricing if you produce in one country and sell in another.

          One way this frequently works:

          Produce in country C, and sell to trading company (on paper, no physical delivery most likely in transit in cargotainers) located in country B. No taxes due to country C because no profit as goods sold at cost or even at a loss.

          Buy from trading company in country B, with no taxes at high prices (on paper, no physical goods transfer, most likely goods still on ship in cargotainers) for sale in country A. Minimal taxes due because of minimal profits because of high cost of goods sold.

          When funds are needed for “investments” such as stock buy-back or M&A, get a loan at high interest from trading company or straw party in country B. No taxes due to country A for repatriated profits, high interest is paper cost only, and because interest is still tax deductible 1/3 of the cost will be subsidized by the taxpayers.

          What’s not to like?

        • d says:

          Mac pro, is now again made in the US.

          When the same economies of scale and/or security make it viable to make I phone in a robot factory in the US they will.

          Mac pro, is also made by robots.

          Robot factorys on cheap land, will make shipping between continents obsolete.

          Robot factory’s are easy to duplicate once the first one is fault found

          1 in the US, 1 in SE Europe, and depending on product 1 in Asia.

          no international shipping of completed good’s, as when you ship completed goods, at least 50% of your M3, is air depending on item.

      • Winston says:

        “14 people on the plant floor maybe, but a lot of technicians around to keep the automation flowing.”

        TINY numbers in comparison with the original 600 employees.

        As IBM did with its mainframes in the past, there are machine service contacts that involve technicians who can have entire regions to maintain. Sometimes, troubleshooting can even be done remotely via networks meaning that the techs don’t even need to be located within the US, allowing a remote “exfoliation team” (“pull your hair out problem” troubleshooters) to be the eperts, thereby allowing the local technicians to be less skilled, lower paid field replaceable PC board/module swappers . This depends upon the manufacturing equipment type used and brand, of course, but this WILL BE the continuing trend.

      • Wolf Richter says:

        The 14 people at the plant include the “technicians to keep the automation flowing.”

        • Winston says:

          “The 14 people at the plant include the ‘technicians to keep the automation flowing.’ ”

          How does that contradict the point I was making, that the gains from technicians employed as some sort of silver lining from automation are minuscule and due to remoting the most skilled expertise, they won’t even necessarily be highly paid technicians either.

          Also, how does the “14 people on the plant floor maybe, but a lot of technicians around to keep the automation flowing” statement by the original poster indicate that they know anything in fact about the relative numbers of technicians vs. machine feeders?

          And, BTW, before my retirement, I WAS a technician maintaining very complex, state of the art commercial electronics gear. Well before my retirement, I was in charge of a large number of technicians doing the same.

        • Winston says:

          One of my pet peeves is hearing some claim that the silver lining to plant automation consists of the more highly skilled and highly paid technician/programmer jobs that will create. Forget that. Even the maintenance of automation is being automated, just one example being Built-In Test Equipment (BITE) – the unit tells you what to replace.

          The goal, for economic reasons, is to reduce technician’s to merely physical PC board and module swappers, calling for about as much skill as the guy who rotates your tires. On-site machine programming will become easier as expert systems make that task easier, reducing the required skill level for that task, too.

        • Kam says:

          I don’t believe that. I have been involved in automation. Lots of moving parts that start wearing out, bugs that don’t de-bug themselves, sensors that stop sensing.
          Electricians, techies, maintenance. Hard to believe that 600 becomes 16 total. Where is this plant?

        • Wolf Richter says:

          Your ATM automated tellers decades ago. How many full-time techs does one ATM need to be maintained? How many full-time tellers does one ATM (running 24/7) replace?

        • Winston says:

          “How many full-time techs does one ATM need to be maintained?”

          A fraction of one since an ATM tech can maintain a large number of ATMs in his particular area.

      • Tony says:

        I have been in automating & manufacturing all my life and its not a problem today to make same amount or more metal clamps with 16 people than with six hundred !
        Look at your office “automation” in the last 20 years !
        Haas Automation builds 10,000 plus machine tools (about 30 base models) a year with 800 employees ( 1 employee makes one avrg machine a month !!) and that in CA.

        • Kam says:

          I am not arguing against job reduction through automation. My only point is that the job reductions tend to be grossly distorted.

          Where is this plant located? I doubt the job numbers.

  2. Sue says:

    If the workers in the automated plant are without their old job, why not retrain them to the jobs we need in our nation – education, infrastructure repair and creation, healthcare, etc.

    • In many cases the displaced workers are old dogs no longer able to learn new tricks. Additionally many also lack the temperament and talent to work in people/abstract areas such as “education,” or “computer programming.”

      • Bookdoc says:

        And the education cabal prefers fully indoctrinated kids the universities now produce. People who lived in the real world would present too many triggers. As for computer programming, why would they hire a retread when they can hire a fully trained indian for a lot less?

        • Petunia says:

          How many innovations have come from all those H1Bs exactly? None that I can point to.

    • walter map says:

      “why not retrain them”

      Because they are surplus labor: low-value, obsolete, and expendable.

      In a modern capitalist society your prosperity, even your survival, is increasingly on condition that you have the ability to enrich the wealthy, and desperately poor people in other countries are able to do that at minimal cost. You have no right to support yourself, and you have no right to work.

      • kitten lopez says:

        “In a modern capitalist society your prosperity, even your survival, is increasingly on condition that you have the ability to enrich the wealthy”

        that’s it, right there. that’s exactly the enraged realization i had of what had long-since become of america that had me despairing and wanting to feed crushed glass to my employers if i had to become any rich fuck’s over-educated maid.

      • Jungle Jim says:

        “You have no right to support yourself, and you have no right to work”.

        Ummm…there is one point I’m not clear on. Those same displaced workers are expected to be consumers and buy the output of the now-automated plants. Without jobs or at least some source of income, how will they do that ? Credit won’t work because they won’t be able to pay it back.

        With automation, we are solving one problem and creating another, much bigger one.

        • walter map says:

          “Those same displaced workers are expected to be consumers and buy the output of the now-automated plants. Without jobs or at least some source of income, how will they do that ?”

          Eventually, they won’t. Because they can’t.

          Corporatists expect the overpaid employees of other companies will pick up the slack. Of course, other companies are also displacing workers and going cheap to stay alive. Companies have their own race to the bottom going.

          These companies can then increase profits from reduced labor costs, at least until consumers run out of savings and credit. Wall St. is mostly interested in the next quarter’s profit statements, and what happens after that is something they don’t bother with so they can focus on the short term. In the meantime, with free money, they can also profit from speculation.

          Unfortunately, speculation isn’t investment. When they do invest, it is in low-wage overseas labor markets, even though their sales still depend on the high-wage domestic markets they are cannibalising. If this sounds suicidal, that’s because it is.

          This is the major reason why “the jobs aren’t coming back” and why the real U.S. economy has not recovered and cannot recover. It’s being liquidated to enable short-term profiteering.

          It also explains why all the “stimulus” has been monetary, and not fiscal: fiscal stimulus amounts to investment in the U.S. economy, and you don’t invest in an economy that you’re liquidating. It also explains why monetary stimulus cannot stimulate the economy, no matter how low interest rates go: there’s no unmet demand because consumers don’t have the money, and therefore no motive for domestic investment.

          The U.S. government could prevent this effect and preserve the U.S. economy, but corporatists have bought off the political establishment to allow it. Worse still, the export of the U.S. economy is actually subsidized with your taxes, because that’s what corporatists want. U.S. workers are effectively paying to have their jobs exported.

        • RD Blakeslee says:

          “Credit won’t work because they won’t be able to pay it back. ”

          But credit IS working! Just ask Janet Yellen…

        • Ellie Welch says:

          I completely agree and I’m hoping my kids will but land and learn to farm… and build their own houses furniture art textiles etc.and become somewhat self sufficient.

          I’ve long thought the government should tax companies for automating jobs away. We will ultimately need entitlements to support those poor out of work folk unless we want a revolt. And the $ has to come from

          Unless the über rich plan to build motes around their obscene mansion fortresses.

    • roddy6667 says:

      With wars in seven countries and military bases in 130 countries, there is no money for “education, infrastructure repair and creation, healthcare, etc.”.

      • Ellie Welch says:

        Education won’t help. The rich techies are focused on making more money by creating automation and robotics and eliminating the need for human labor

        Machines are much cheaper and allow for much greater profit ….humanity be damned!

    • Tim C says:

      About 1 million workers were displaced by NAFTA have been through outplacement and retraining in the first 20 years since it’s passage. Billions have been spent on retraining with little in return.

      Globalist, progressive policies, regulations and high taxes that cause companies to relocate outside the USA are government’s contribution to the current flaccid US economy. All counterproductive and destructive.

      Nobody says that a change in public policy will prevent all factory closing but the speed at which the USA has been abandoned by global companies has been accelerated by government.

      • walter map says:

        “the speed at which the USA has been abandoned by global companies has been accelerated by government.”

        Maybe the government should stop paying them to leave. And stop rewarding them for tax evasion. And prohibit them from bribing elected officials. And prohibit cheap imports made by slave labor.

        Retraining U.S. workers is obviously useless if companies can import bargain-basement Asian hordes, legally and otherwise.

  3. The main reason why the “good jobs” won’t return is because these no longer exist. Many of them have simply been eliminated by robots/automation, as products were redesigned for automated assembly, and many other high skill/high pay jobs have been replaced by two or three cheaper but overall more productive jobs by “work simplification.

    So far, the main effect has been on repetitive blue-collar manufacturing jobs, but this IMNSHO was simply the “lull before the tsunami hits the shore,” when computerization/artificial intelligence eliminates many of the middle management and professional positions, e. g. interpreters and financial analysts, and large numbers of commercial drivers (bus, truck, taxi) and possibly airline pilots are rendered redundant.

    It should be noted that when you are unemployed, the taxes you pay to help run government are minimal, and the social safety net costs generally far exceed the small amounts of taxes paid, while education and public safety costs (and home mortgage foreclosures /vehicle repossessions) soar.

    • walter map says:

      ‘The main reason why the “good jobs” won’t return is because these no longer exist.’

      There are plenty of “good jobs”. But the rich don’t want to pay for them, and they don’t have to, because they can offshore them and import cheap labor for the rest. One way or another, and sooner or later, virtually all American workers are eminently replaceable or degradable.

      Other countries do not yet have this problem to nearly such an extent, but in the U.S. corporatists have nearly total mastery.

      • RD Blakeslee says:

        “Other countries do not yet have this problem to nearly such an extent, but in the U.S. corporatists have nearly total mastery.”

        The policy of the collectivist, no-borders elites is a levelling process – eventually, most of the wealth in the world is owned by the elites and all the peons are poor.

    • VK says:

      Or you could simply tax automation per unit of production. We already tax labour in the form of income tax, social security, health and safety regulations etc. This greatly adds to the labour cost by a factor of 2x over the actual salary. The answer is simple, if you want more jobs you tax automation to the point that it is unviable and companies are forced to hire more people to do jobs. There’s no reason why taxation can’t be used to protect jobs and local industries. It’s a political tool, not an act of God.

      That way social stability is preserved. Otherwise the elite are going to find out what the French aristocracy found out during the revolution.
      The other option is basic income as well, otherwise who are the rich going to sell their goods to? If no one is middle class who will be buying the products that the rich corporations sell? The number of rich will drastically sink as well as their pool of buyers disappear.

      • Chris from Dallas says:

        I am reminded of a story that a businessman told me a few years ago. While touring China, he came upon a team of nearly 100 workers building an earthen dam with shovels.

        The businessman commented to a local official that, with an earth-moving machine, a single worker could create the dam in an afternoon. The official’s curious response was, “Yes, but think of all the unemployment that would create.”

        “Oh,” said the businessman, “I thought you were building a dam. If it’s jobs you want to create, then take away their shovels and give them spoons!”

        • Coaster Noster says:

          That story was told, not with a businessman, but with “Milton Friedman”, and they were digging a water canal in the PRC.

          This is about forty years old. Learned it in an economics class in the 1970s.

        • VK says:

          That’s a tale with a lot of sound and fury and not much else. The Chinese protect their markets, as do the Japanese and Koreans through a variety of subsidies and tariffs. If the US wants to create more jobs – tax automation, subsidise labour and you will find plenty of people willing to hire employees.

          Automation has gone well beyond the marginal benefit vs marginal cost curve. The US is politically imploding, is the marginal benefit of a few shekels worth the risk of an ungovernable country?

        • d says:

          “If the US wants to create more jobs – tax automation, subsidise labour and you will find plenty of people willing to hire employees. ”

          The US is to far along the job export curve for that.

          Job exporting in the US was an industry, LONG BEFORE Clinton was elected to his first term. It started under Carter. Thank’s to Nixon.

      • Ed says:

        Let the tumbrils roll!

      • RD Blakeslee says:

        “Or you could simply tax automation per unit of production”

        But then, the production moves to the “third world”

        Would the third world will tax it for the U.S.?

        Just have a look at third world deliberations in the U.N. for your answer.

      • d says:

        “Or you could simply tax automation per unit of production. ”

        and it will move away obviously the recent history of job exporting and HB1 in the us hasn’t taught you much.

        I can put 50 robot factory’s in a big fifty story building, in a low tax, cheap land environment, and only need a local work force of 1000 people.

        TAX, AND UNIONS, Particularly mob controlled union extortion and coprruption, is why American job’s, were offshored.

        GM opaid 5M tax in the US and 900M tax in china. In the same year, After O buummers bailout to keep them alive.

        The difference is that chinese tax is flat and simple, and there are no extortive union’s. from china GM exports cars to America and the world.

        You have the “Taker mentality” that has sent American job’s away.

        FYI they are not ever coming back.

        In a few decades, the small land owning farmer, everybody in the city currently laugh’s at, will again be the middle class.

        Yesterday 26/10/2016 I went and collected some goods from a family that lives effectively in the middle of nowhere on land they own.

        Their quality of life, and disposable income. Is already twice that, of those in the city, with compatible incomes.

        City’s are becoming Jails, for the corporates consumer population’s.

        • VK says:

          “and it will move away obviously the recent history of job exporting and HB1 in the us hasn’t taught you much.
          I can put 50 robot factory’s in a big fifty story building, in a low tax, cheap land environment, and only need a local work force of 1000 people.”

          Also that’s what the recent political upheaval in the Republican party has been all about at the core: stopping illegal immigration to reduce the supply of labour and raise wages for the working class. Legal immigration is perfectly fine as bringing smart people into the country is a plus. Also Raising tariffs on imports to incentivise local manufacturing, so if Ford, GM etc want to outsource to Mexico? Great, that’s fine BUT they pay 35% more import tax to gain entry into the US market. That’s what China does, as well as Korea and Japan to protect their local markets.

          That’s the social game called politics, we can incentivize certain behaviours via subsidies and disincentive certain behaviours via taxes and regulations. If automation is becoming net harmful – do away with all the subsidies it receives including no taxation and the fact that you are allowed to amortize the cost through depreciation over many years, thus a tax subsidy.

        • d says:

          “Legal immigration is perfectly fine as bringing smart people into the country is a plus. ”


          As long as they already have a Job to go to, instead of coming and stealing somebody elses job, or a job that should go to a national.

          Which is the English argument agauinst the flaw of the Eu “Free movement of Labour”. Which allows states to Export unemployment in its current form.

          Question is where are they going to export their unemployment to without England??

          Especially as the EU seem intent on importing lots of muslim unemployment, most of which does not have any skill they dont already have, in excess..

  4. j.dubyah says:

    Learn to garden.

  5. walter map says:

    What’s missing here is the admission that the U.S. economy – and the global economy, for that matter – is not structured to support the general population. It is structured to enrich the wealthy to the detriment of the general population:


    As the underpinnings of human society crumble, the obvious solution for the rich is to automate and roboticize all your income streams so your wealth doesn’t depend on the existence of a viable society and can get by just fine on the desperate labors of a few hundred million debt peons at most.

    The rest of the population is simply expendable, and therefore will be expended. That is the policy, accepted by every politician in the world except for a small number of marginalized humanitarian liberals.

    If you prefer a different outcome the U.S. economy and the global economy would have to be restructured to support the general population – and that population would have to be reduced to be sustainable, because it presently is not. You do not have a choice.

    TPTB will not accept such a restructuring. They want things the way they are, and since they’re calling the shots, that’s the way they will be. They know this, and they know it extremely well, and they have bought off every political establishment of consequence in the world to guarantee it.

    I did say it was going to ugly, didn’t I? I also mentioned that it was going to be weird ugly, beyond your wildest Kafkaesque nightmares.

    It will be interesting to see if it works out. For most of you it will not, because it can’t. That’s the best-case scenario. But the threats to human civilization are so dire and so extreme that the most likely scenario is that it will not work out at all, for anybody.

    Good night, and good luck.

  6. Petunia says:

    While there are perhaps too many efficiencies with more automation, the fact remains that the crap we import from China is crap. Maybe those 14 workers in the new plant will displace 100 Chinese workers sending us crap. At least you will be able to return goods instead of dumping them.

    There are plenty of average jobs that are done by illegals which could easily be done by legal workers here. Before the financial crisis all the landscaping work in my development was done by Latinos, all illegals. After Obama started to deport them, you could see mostly African American men taking over those jobs. There were even some white guys cutting the grass. BTW, those landscapers make a lot more than minimum wage. These are the jobs, guys like the writer, say Americans won’t do.

    I now live in flyover country and it is refreshing to walk into a business and see Americans both black and white working those jobs. I can see a big difference between where I am and where I was in Florida. Illegal immigration is hurting American workers and working people see it every day everywhere they go.

    Guess what, even if the new plants only hire 1% of the previous workers, we are all better off controlling our own production. The globalist propaganda is dead. The world is not flat, it is round, and the 1% can’t see what’s around the corner waiting for them, and it isn’t good.

    • kitten lopez says:

      “the fact remains that the crap we import from China is crap….even if the new plants only hire 1% of the previous workers, we are all better off controlling our own production.”

      i’ve done research on obtaining basic high quality fabrics consistently (instead of as one time purchases from bolt ends from runs of manufactured clothing)–like a basic heavy weight black cotton lycra– and found out that we don’t even make basic cotton knit fabrics here in america anymore, and that all our textile machines were shipped to china.

      and my superfly sewing mentor who retired from the family dressmaking shop said she won’t bring chinese fabrics into her home if she can help it (or will wash first) because of all the poisonous chemicals used in the sizing.

      the more i realize how mercilessly this country killed/didn’t protect america’s own industries (and thus, PEOPLE) in exchange for disposable cheap utter and total crap, there are no words…

      • roddy6667 says:

        If you don’t go to China you will never know all the high quality consumer goods their people have. I found this out when I purchased a new home and finished and furnished it in China. The specifications for the “cheap Chinese crap” that is sold by Walmart/Target/Penney’s/Macy’s/etc are set by the American retailer. They specifically order cheap, low quality goods because that is all Americans can afford.

        • Petunia says:

          Most of the high end luxury goods sold in America are made in China. We pay over premium prices for these luxury goods, they over manufacture them, and sell the surpluses cheaply in their own markets. This is why I won’t pay any premium for anything made in China. If luxury goods producers won’t employ workers in their premium markets, the consumers shouldn’t pay premium prices, or buy at all.

        • robt says:

          I used to order injection moulds and tooling from the Orient, at that time, Hong Kong. When you ordered, you specified what grade you wanted – USA grade or HK grade. Trying to run a HK grade tool in America would very often mean it would crush or break down quickly – they ran with a much gentler touch over there, ran slower – because labor and overhead was cheaper.
          It’s the same with anything – you get what you specify and what you pay for. And you have QC monitoring production.

      • Petunia says:

        The best fabrics are made in Italy, France, and Japan. You are lucky to be in SF where there is a large Japanese population. Go to the Japanese antique shops and look for old kimonos, they are among the most beautiful and precious fabrics you will find anywhere.

        • kitten lopez says:

          ah! thank you!

        • d says:

          “The best fabrics are made in Italy, France, and Japan. ”

          Try Japan and India.

          India will make you the quality you want, chemical free, if you are willing to pay for it, cheaper than the Japanese. India has always produced good textiles.

          India is a bad/dirty, low labour, safety, and environmental standard manufacturing country, textiles are the same as generic/forged drugs in india. they make to the quality you specify. But you must continuously monitor as unlike the Japanese Indians are thieves just like the chinese they will always try to reduce the quality and rob you.

          This was all taught to me BY INDIAN’S in the textile exporting business in Japan and India.

          Club-med textiles are over priced and poorer quality, many times only the label is made and attached in Club-med andthe textiles are Asian, or eastern European..

        • Petunia says:


          While India makes some nice silks and does decent beading at low prices, they cannot compete with France, Italy, and Japan on the esthetic beauty of their printing, weaving and embroidery. I was remiss in not including India, but I would put them at the bottom of my list.

        • d says:

          “they cannot compete with France, Italy, and Japan on the esthetic beauty of their printing, weaving and embroidery.”

          Quality of Machinery. french and italians, are not using french and italian machines, either.

    • polecat says:

      “The world is not flat, it is round, and the 1% can’t see what’s around the corner waiting for them, and it’s not good.”

      but alas Petunia …. their world IS flat … and they will eventually fall off … finding purchase from the business end of a lamp post !

    • IanCad says:

      Petunia noted;
      “These are the jobs, guys like the writer, say Americans won’t do.”
      An absolute slander against most of the native workers in both the USA and UK. By having an unlimited supply of illegal/legal foreign workers, the capital of a worker is, essentially, valued at the level of the minimum wage.
      Capitalism requires a reasonably level playing field – one in which all sectors may participate in the laws of supply and demand.
      Indeed P, the corner hides the horrors ahead. It will make rattling good history.

    • joel says:

      Aren’t we all in this together? “all” meaning illegals who like to be able to feed their illegal children. Ah yes, born in the US makes me legal and extra special. Are Chinese workers legal? Do they like to feed their children too? Maybe they are different and their children don’t need to eat. I am afraid we are the 1 per centers relative to much of the world and like our betters do not like to notice that fact.

      • VK says:

        That is true. The US uses up roughly 25% of the world’s resources but only has 5% of the population. As other countries become better educated and competitive, US living standards will decline as other countries will be better able to bid for resources.

        • Petunia says:

          You analysis is flawed because while the US uses more resources per capita, it also has the highest productivity in the world, still. All those underemployed fat lazy Americans produce more innovation than the rest of world put together.

        • kitten lopez says:

          Petunia, i’m so glad you were born.

      • RD Blakeslee says:

        “Ah yes, born in the US makes me legal and extra special.”

        This used to be a unifying belief in our heritage, born out of a knowledge of the history of our Constitution after the successful revolution against English colonialism.

        Modern “progressives” are systematically destroying it.

        But NOT FOR ME!

  7. Ron MacDonald says:

    When I was a kid milk, bread and ice were delivered door to door by a man operating a horse and wagon. These jobs were gone by the mid-1950’s. Low-paid stable workers were replaced by well-paid auto mechanics. So, let us look at this from another perspective. How many workers did it take to design and install the automatic equipment? Downtime is expensive. Once installed how many mechanics will it take to perform both preventive and regular maintenance on the equipment? Automated equipment is usually computer controlled. How many electronic technicians and electricians will the company employ? All of the above can only be performed by highly trained well-paid individuals. Ten from now there will be lots of vacant obsolete factories in China.

    • roddy6667 says:

      China is automating, also. They will always be further ahead of the curve than American industry.

      • Petunia says:

        I’ll take the opposite side of that bet. China copies, it doesn’t innovate. Alibaba is a good example. They only had to copy Amazon and they still haven’t gotten it right.

        • Kent says:

          “China copies, it doesn’t innovate.”

          Historically, that’s true. And I would guess that’s because it is a lot more profitable for a poor country to copy than it is to innovate. Also, when you are producing for international companies instead of for yourself, there is no need to innovate.

          However, over time, I would expect that to change. As Chinese companies begin to compete with international companies in their own right, they’ll have to learn to innovate. And because they will have the core knowledge of how to manufacture, they’ll know how to best.

        • VK says:

          Petunia, you are obviously not following the rapid developments in China. They are advancing on all fronts extremely rapidly – many of the engineering projects they have finished leave the US behind as a third world country. Let us agree with your hypothesis that they are just ‘copy cats’, yet these ‘copy cats’ are the only ones in the world to successfully do so, all the other nations are still waffling around. They’ve compressed 2 centuries of development into 3 decades, that requires a high level of intelligence and work ethic.

      • d says:

        “China is automating, also.”

        Yes, it is buying the technology from Germany and Japan.

        Boosting china with propaganda is one thing, promoting it as a propagandist, because you can, when you are wrong, is pathetic.

        The chinese can build airplanes, as they copy them. They are not that reliable.

        They still can not design and build a reliable high performance aircraft engine.

        They cant even consistently copy and build a high performance Russian aircraft engine, with help. Or maintain it, without help.

        Even the objective chinese will tell you chinese are not Metallurgical development engineers. They do not have the developed psychology of it. Which is hundreds of year old, Germans do.

        You are trying to put an innovative engineering development halo, on philosopher’s and sociologist’s, it dosent work.

        • d says:

          China will not be able to innovate, in engineering, for a very long time, as Mao murdered or drove out the innovators.

          Even now, there are many good chinese Mathematician’s. They are NOTIN CHINA, as in china, Mathematician’s are not valued.

          The vast majority of good chinese Mathematicians in china leave, or want to leave china, still.

          You can not innovate engineering, or computers, without lots of good Mathematicians. Which china is still, driving away.

    • robt says:

      And in those days, people used to say they’d always have a job because people will always be drinking milk.

      • RD Blakeslee says:

        Right on! …and because we will always need milk, horses will be required to deliver it.

      • Petunia says:

        Sadly the milk business is drying up because the govt controls the price by suppressing it. Dairy farmers are giving up and selling their land. I recently read that no dairy farmers want their children to go into the business.

        • robt says:

          If the government price-controlled milk, consumption would go up and most likely there would be shortages. That’s the rule of price controls and it never fails.
          Small dairy farmers may be giving up because large producers are taking more of the market at lower costs.
          Another possibility is that consumption patterns may be changing, as often happens with food. Aging population? Demographics? Soy milk? Almond milk?
          In Canada, consumption is also dropping significantly, and there are Marketing Boards. Marketing Boards price-fix high prices for dairy products. Cheese, for example costs double or more the price in the States. And yes, small dairy farms are giving up in Canada too.

  8. Jay says:

    Curious that neither the original article nor any of the comments yet here mention the devastating international trade agreements such as NAFTA or TPP that arbitrage labor by bringing cheap imports into this country.

    • kitten lopez says:

      i thought NAFTA went without saying here.

    • Wolf Richter says:

      Yes, the article indirectly addresses it: automation is the same, even in Africa. Robots cost the same anywhere. Automation obviates the need to send jobs to cheap countries. These jobs don’t go anywhere, the article says. They just evaporate – from the earth, not just from a country.

      • realist says:

        Automation in China and elsewhere means that costs will be quite similar everywhere. The difference will be in taxation and other expenses decided by governments. In other words, China will loose the ability to compete with use of cheap labour.

        • roddy6667 says:

          The process of automation might be the same in America and China, but it cannot be done in a vacuum. China has the advantage with the fixed costs of industry. For example, medical costs are less than the deductible in America, so health insurance for the workers is cheap. There is NO PROPERTY TAX, so leasing factory space is cheap. Taxes and regulations are not a byzantine nightmare like in the US. It is very quick and easy to set up an operating factory in China. In America it can take years.

        • Wolf Richter says:

          Robots don’t need health care. Property tax for a productive plant isn’t a huge factor. And in terms of regulations, I’m glad I don’t have to breathe the air in China on a daily basis. China figured that out too.

        • MC says:

          China’s secret was never just cheap labor: to stay in Asia Malaysia, Vietnam, Bangladesh and others all have cheaper labor.
          China’s rise was due to a combination of factors, the most important of which for retail companies is their nigh on supernatural speed in putting a new item in production. Most Chinese contractors will have the finished goods rolling off the factory floor two months after receiving the blueprints and on some items in little over a month.
          That’s the reason why, despite Bangladesh being considerably cheaper, the fashion industry still has such a heavy presence in China: speed.

      • https://en.wikipedia.org/wiki/Luddite says:

        The Luddites foresaw this two centuries ago.

        They were simply ahead of their time.


    • d says:

      “Curious that neither the original article nor any of the comments yet here mention the devastating international trade agreements such as NAFTA or TPP that arbitrage labor by bringing cheap imports into this country.”

      Should read;

      Curious that neither the original article nor any of the comments yet here mention international trade agreements such as NAFTA that are abused by Globalised Vampire Corporates allied currently with china, just as they abuse Globilisation, and arbitrage labor by bringing cheap imports into this country.

      TPP has not even been signed and ratified by the US let alone come into force.

      Yet you already have it stealing JOBS in the US.

      Clearly you are a time traveler perhaps you would like to share the secret of that.

      Nixon gave away the whole western worlds jobs, in exchange for a couple of bottles of whisky

      He was a dipsomaniac, the chinese used this knowledge to fill him up so he would hand the west to them on a plate.

      Nixon didnt even use a plate to give it to them, he dropped it on the table between drinks.

      Western jobs were given away, not by trade agreement, but by drunken American politicians, for nothing.

      • economicminor says:

        The other piece about the trade agreements that helped move American jobs off shore is that in the end, the products I buy made in other lands cost as much or more than if they were made here. You can’t tell me that we can’t make a washing machine for under $1000 or a refrigerator for under $1500. I know we can make good clothing for as cheap as Carhart isn’t any more expensive than Docker. Greed may be good for a few but it has its long term costs and that cost has been destroying incomes that once could afford to purchase. Credit filled in and asset inflation did to but both those avenues have run their their race and that is over.

        • d says:

          In the beginning US companies dint export job’s to retain their margin’s, they did so to INCREASE them. And keep that profit offshore, as that decreased tax, so further increased profit’s.

          Most pricing in the US, is researched around “what can they be MADE to pay”, not landed cost + %, or cost in the door + %.

          Labour cost (Even US Labour cost)

          Is a small part of a mass produced item. When compared to all the other costs, that can be saved, by exporting that job.

          china and india dont only compete on Labour , they compete with ability to pollute freely, and poor labour safety standard’s, and lower municipal and general taxes, freight cost’s, Etc, Etc.

          That all adds up to a much bigger # than Labour cost, per item.

          We need a NEW TARRIF regime based on total pollution, and labour standard’s not just CO2. Then india and china simply would not be able to compete. As in reality that is how they unfairly compete.

          The Globalization might start to do what it was supposed to, raise condition’s and rates, at the bottom.

          Instead of what it has done. Leapfrog china and its Globalised vampire Corporate allies, to the top. As they abused the system wholesale. Whilst pushing the middle and the bottom. Down further.

  9. Harry Potter says:

    How does wealth exist without a viable society? Eventually, automation will eliminate jobs and nobody will have money to purchase products mfg with robots and AI. Are the robots going to buy cars, Nike shoes and Chipotle? We need to rethink the next purchase from Amazon and buy local from our own small businesses before it is too late.

    • https://en.wikipedia.org/wiki/Luddite says:

      “We need to rethink the next purchase from Amazon and buy local from our own small businesses before it is too late.”

      Doesn’t always help.

      For example, my local hardware store, owned by a third generation of the family, now carries items mostly manufactured abroad.

      The local grocery store now carries meat from everywhere and the country of origin cannot be on the label because of international trade considerations:


      • d says:

        Thats not about telling where it comes from that’s about hiding GMO.

        Outside the US, china and USA on the label, means its toxic, and GMO, so it dosent sell.

    • Bobcat says:

      “We need to rethink the next purchase from Amazon and buy local from our own small businesses before it is too late.”

      That ship already sailed.

      A variation of that sentiment was consumers have only themselves to blame because they didn’t buy American. That specious statement ignores that consumers were seldom presented with a clear cut choice of foreign or domestically made products. Usually such choices were made behind closed doors in corporate boardrooms. The substitution was made and the only choice consumers were presented with was buy or do without.

    • economicminor says:

      ” We need to rethink the next purchase from Amazon and buy local from our own small businesses before it is too late.”

      I often look for things I need in my local area but then go home and search the Internet and buy on line. Not because of price but because some of the things I want just aren’t in the stores I frequent.

      The other issue is that many of the *local* stores are either big box stores or franchises of big chains. So most of the money goes out of the local economy anyway. The Big Box Corporate take over that started with WalMart decades ago has pretty much run most smaller family owned businesses out of business.

      • Harry Potter says:

        What you say is very true. Big box drove the family retail businesses into oblivion. But, not all small retailers are gone. And, Big box stores provide hundreds of local jobs. Not great paying wages, but better than nothing. Now, even they are losing business to the Amazons and Ebays. Macys and other national retailers are under pressure and closing brick and motar stores. Sears and Kmart are in a death spiral. Malls are closing everywhere. Exascerbating all these problems is Wallstreet and near zero interst rates. In order to get returns, hotels are popping up everywhere in my area. More retail space and office space than we know what to do with but we keep building more. People looking for investment buy franchises creating more supply than my area needs. So in turn, most business just does half ass and barely holds on.

  10. humpty Dumpty says:

    Will those of you with your tinfoil hats and a socialist/marxist panacea please go visit Stalin’s tomb, or how about Caracas to see your agenda working. Hmm? It is so boring to read the idiocy handed around by the Left. The rich will always be here, so will the poor. At a more practical level, those without degrees in STEM haven’t a chance, those with will be guaranteed nothing in a few years. Meanwhile, a vast, illiterate, ignorant population of sheep awaits its daily feeding by their feudal lord and even now happily toddle off to serfdom. It is not the jobs that are disappearing, it is your freedom. You won’t hear much about that however, but that is what this is really about. Work is disappearing everywhere EXCEPT GOVERNMENT. For every 600 jobs that disappear in Loser City, Michigan there are twice that to pop up working for the feudal empire. As a percent of GDP, it’s the government boob expanding more rapidly than any other sector, indeed all sectors. For the first time in American history startups are on the decline. Guess what, folks…this indicator is just the point of inflection before the toboggan goes careening down the hill. There is ZERO incentive to hire, train and develop a new business with the sledgehammer of government taking everything not nailed down and creating such constant distraction that compliance is out of the question. You skate until caught. So, rather than get wrung out, most smart people develop the nucleus of a business model and then go out and shop to see who will buy the company. That is not making new jobs, it is feeding the elephant who makes rules with the government to keep the small business smaller. It is a loser’s game. Add to all that the financial manipulation of a corrupt and illegitimate government with the FED and what we have is a perfect storm that will, like a hurricane, seem like the best of days right up until it sweeps in and blows it all away. Most will knuckle under, go to the feudal master and look for handouts. It is already underway.

    • Wolf Richter says:

      Just one point in reference to your assertion, “…the government boob expanding more rapidly than any other sector, indeed all sectors.”

      Here is a chart of all government employment in the US, federal, state and local, per St. Louis Fed and BLS. As you can see, outside of the employment spike for the census in 2010, government employment in recent years hasn’t been anything resembling growth … total government employment is where it had been in 2007:



      • James McFadden says:

        The chart indicates only about 14% of the workforce is government employees – but I think this is misleading.
        The caption on the chart states:
        “Government employment covers only civilian employees; military personnel are excluded. Employees of the Central Intelligence Agency, the National Security Agency, the National Imagery and Mapping Agency, and the Defense Intelligence Agency also are excluded. Postal Services are included.”
        So it appears to be missing quite a few gov employees.
        I also think it fails to include any of the private contractors which make up a sizeable portion of the government workforce. And I’m pretty sure it doesn’t include labor for direct contracts with corporations that perform gov services or manufacturing (like weapons manufacturing or rockets for NASA).
        Perhaps a better indication of government employment might be the fraction of GDP generated by government spending which has been roughly flat for decades. Since inflation adjusted GDP has been growing, the real gov workforce must also be growing. Since inflation adjusted GDP has grown faster than the population, it may be that the fraction of government workers over total workers has been growing too. However, perhaps what really happened is corporate profits from gov contracts just increased.
        I think the chart primarily shows that the government labor force has shifted to contract labor — which is profitable for private corporations — but likely costly for taxpayers.

        • Wolf Richter says:

          Sure, it doesn’t cover all employees. But that wasn’t the point. The point was the growth trajectory of government employment, as I pointed out.

      • Marty says:

        What would that graph look like if one were to include all the stealth govt workers:

        1. MIC
        2. mercenaries
        3. people on social security and welfare–paid to not work
        4. people on unemployment–also paid to not work
        5. Silly con valley, come on, you know they are working primarily for NSA and CIA.
        6. most prof at private universities, who work for the MIC

        If we correctly count govt workers, we’re looking a lot like the good ol’ USSR.

        • Kent says:

          Are you assuming that if they didn’t work for the government (or get paid by the government) they’d have some other lucrative and productive career? I think you’d have to show that American businesses are being forced to rapidly increase wages because they are competing with the government for these people. I’m not sure that is actually happening.

        • marty says:

          “Are you assuming that if they didn’t work for the government (or get paid by the government) they’d have some other lucrative and productive career?”

          Well Kent, I guess I am, but not in the way you mean, I think.

          Govt jobs are always a net drag on the economy. Govt workers not only produce nothing of value, they actively throw up barriers to productive enterprise through regulation, taxes, destroying young minds, and killing innocent people.

          This is not to say that if a county social worker were laid off, she would instantly find a high paying job designing computer chips. This is a more subtle point.

          If the govt weren’t pursuing economy-destroying activities on an unprecedented scale, markets would be vibrant and people would be far more productive, hence there would be more employment for everyone, especially those at the bottom of the economic ladder.

        • George McDuffee says:

          You appear to have overdosed on Ayn Rand.

        • night-train says:

          Reply to Marty: Your nihilist view of government employment is an unwarranted knock on many good people who work daily doing unappreciated jobs. Things like protecting air and water quality, hauling away garbage and child welfare, to name just a few.

          While I favor periodic review of all regulations, I worked in an industry whose historical practices brought about the regulations we have today. Those regulations remain and are still needed today. Those who disdain regulations need to specify which are onerous and no longer needed. The broadsides at regulations in general are easily dismissed.

        • George McDuffee says:

          Indeed! Glass-Stegall is posterchild for this.

    • economicminor says:

      “Freedoms just another word for nothing left to lose.”

      The loss of freedom goes hand in hand with the growth in population. Every thing you do affects others. As the population grows, the space and availability of resources per capita shrinks and so does everyone’s freedom. People blame the government yet we employ the government to protect what little we have from all those others. As the we grows, so do the rules and the regulations. Want your freedom back, get on the first flight to Mars. And quit promoting more and more babies. Or become one of the elite who have the freedom to take what you have with no recourse.

    • night-train says:

      My tin foil hat business has been doing great for the last 6 months. Humpty Dumpty, can I put you down for my most popular model? It has a built-in AM receiver that filters out all broadcasts except talk radio.

      • Unitron says:

        Humpty sounds an awful lot like someone I know, big Tea Party type, who rants against the government, while he sits at home and smokes pot. The fact is, there will never be an economy strong enough to employ all the resentful losers who are too drunk, lazy, high or stupid to get up and go to work day after day.

    • roddy6667 says:

      Before you try to blame “socialism”, as you see it, for America’s woes, why don’t you visit:
      New Zealand. These socialist countries have higher standards of living than America.

      • walter map says:

        “These socialist countries have higher standards of living than America.”

        But! but! but! Stalin! Lenin! Marxists! Commies! Venezuela! Government teats! Millionaire firefighters! Lazy Frenchmen! Taxes!

        Hysterical handwaving Trumps reality. Haven’t you been watching the campaign coverage?

      • EVENT HORIZON says:

        And now study their Demographics.

      • MC says:

        I find it intriguing some people consider Denmark and Sweden “Socialist”.

        Back in the 80’s the apex of Socialist retail were the GUM department stores in Moscow, notorious for being both invariably overstocked with glassware and woefully understocked with clothing.

        A few days ago my mother asked me to accompany her to a dollar/trinket store called Flying Tiger Copenhagen, which is part of a chain headquartered in the Danish capital but owned by a Swedish investment fund. It was the apotheosis of consummerism and it was well stocked indeed.

        I’ll add one more piece of evidence. In 1978, the Wallenberg-controlled congomerate Electrolux acquired famous chainsaw manufacturers Husqvarna and Jonsered.
        Husqvarna became the first chainsaw manufacturer to outsource to “cheap labor” countries, with a large part of the production going to Tomos, a motorcycle manufacturer in Yugoslavia.
        At the time all three major US chainsaw manufacturers (Poulan, McCulloch and Homelite) were still manufacturing all their chainsaws in the US.

        It seems to me that for being Socialists, they surely love their Capitalist trinkets and profits.

      • Wolfbay says:

        I understood that socialism is the State owning and operating the means of production. A county like Sweden gets its wealth from private corporations that export and from innovative entrepreneurs. Yes taxes are high and they are a social democracy but they are probably more “capitalist” than the US.

      • d says:

        Those country’s are not socialist you need to learn the difference between a socialist and a social safety net state.

        A social safety net is a good thing.

        A socialist state is doomed.

        NZ has a social safety net.

        It is not socialist. The rest of the society is very NIMBY and aggressive against any have-not’s that show themselves in their NIMBY environments..

        But the Maoist communists left behind in administration by helen clark (A closet Maoist, and closet Lesbian) are trying to make it socialist.

        Then it will, turn into another Venezuela, an excellent example of a socialist country.

        You left out Australia, it to. Like New Zealand, is a social safety net state that is not Socialist.

    • robt says:

      The ‘rich’ create wealth, the ‘poor’ share it.

      Philip Larkin, poet laureate of England, when asked why, as a member of the arts he was a conservative rather than a socialist, responded:
      “Because the values of the conservative are self-reliance, industry, patriotism and duty”.
      And the values of the socialist?
      “Envy, sloth, and treason”.

      • walter map says:

        Poets, as we know, are the real job creators.

        Larkin’s father was a British Nazi. Larkin himself, a librarian, was a public employee who enriched himself on the government teat during and after WWII, avoiding military service, and never got his hands dirty. So much for treason, patriotism, and duty. Typical right-wing hypocrite. You could have picked a better example.

        • kitten lopez says:

          man i love this place. Wolf needs to open HIS own sports microbrewery thing.

        • EVENT HORIZON says:

          Like Enoch Powell?

        • robt says:

          Larkin failed his military medical examination, like many others.
          Apart from the concept that one is not responsible for one’s father’s interests, there were a great many people interested and admiring of Germany’s success during the 1930s, in light of their own country’s failure to solve the crisis of the depression. Until, of course, Germany went off the deep end.
          And having a career in intellectual pursuits, and as an esteemed librarian is not living off the public teat, it’s a job – unless, perhaps libraries should be abolished or access to them severely restricted, as has happened in many nations.
          In any event, resort to the ad hominen attack rather than assessing the merit of any statement is tedious and generally invalid.

    • EVENT HORIZON says:

      I love your style.

      The day is coming when 50% of the people are on Welfare and the other 50% work for the Government.

      • walter map says:

        Half the people will have jobs? That’s optimistic.

        • John Doyle says:

          Towards the end, everybody will be on a pension or working for the government. It’s going to actually be a lot worse, but this scenario might apply for a while.

  11. Chicken says:

    Trade balance = lopsided = globalism. People have short memories if they don’t recall our politicians telling us they were subsidizing the export of dirty jobs Americans didn’t want. They clearly told us this was the plan, one successful government program for sure.

  12. Danny M says:

    It’s time for a lot of folks to re-listen to “My Hometown” by Bruce Springsteen

  13. economicminor says:

    In the discussion above, what is missed is that without demand, there is no need for production. People need to make a decent living in order to have disposable income to spend on all this production. If you don’t have consumers, why do you even need clamps for the auto industry?

    We have a mismatch here. The world produces a lot of stuff yet there is a slow down in demand. Because those in charge feel superior to everyone else, they do not see the need to pay others a decent wage. They say they don’t have to because there is a labor glut..

    Where does this leave the world? Or the USA? Or any of us?

    Highly productive machines and highly unproductive humans with selfish rulers.

    All the while the PTB preach over production in humans too! Just what the world doesn’t need is a growth in humans needing jobs so they can consume more when the machines can out preform us all anyway.

    Just seems that we need a new story. A new attitude. A new way forward or it seems to me that we have some real destructive trends that are going to cause serious problems going forward.

    Science Fiction may not end up being so fictitious.

    • kitten lopez says:

      “Just seems that we need a new story. A new attitude. A new way forward or it seems to me that we have some real destructive trends that are going to cause serious problems going forward.

      “Science Fiction may not end up being so fictitious.”

      –exactly, exactly, exactly.

      what’s so horrified me about what has happened to san francisco, and more specifically, my neighborhood, THE MISSION, is how FAST and REAL sci fi got in a hurry…

      in fact, sci fi is CUTE next to current reality i see here and spreading outwards.

      it’s not theoretical anymore. many people who’re HERE are unable to speak on it. you can see the horror in their middle aged faces that this is how it turned out, that it was even POSSIBLE.

  14. nick kelly says:

    So are you ready for something a little different?
    Comment that is.
    OF COURSE stamping out widgets or brackets will be automated. The odd thing is that this didn’t happen 10-15 years ago.
    But this does not mean that the assembly of even a lawn mower is currently automated.
    People see the robots welding car frames and so they think cars are built by bots. They are assembled by humans, using of course a variety of power aids. The starter is bolted on by a human.
    No starter? Tesla? The main pain in the ass re: cars is the interior, not done by bots.
    The fact that making millions of brackets was ever regarded as a good job is sad- what would you learn?

    But that is besides the point, which is, the fact that some basic highly repetitive tasks are being automated does not mean that all the much more complicated tasks that humans do are also about to be automated.
    Like changing a tap washer.
    The key requirement for the usual automated operation is that the inputs and motions never change.

    PS: German authorities have just told Tesla to stop referring to its cars as self- driving.
    I predict big law suits coming re: this performance claim which may also include US regulators.

    • Wolf Richter says:

      Did you see the story about the self-driving truck delivering beer? From Reuters today:

      “In the first real-world commercial use of autonomous trucking, some 45,000 cans of Budweiser beer arrived late last week to a warehouse after traveling over 120 highway miles in a self-driving truck with no driver at the wheel, executives from Uber and Anheuser-Busch said.”


      I think you keep underestimating the speed with which this is happening. OK, these vehicles are all prototypes. But this is happening. The technology is working.

      Tesla is a bad example, imho. The real music plays elsewhere.

      • NotSoSure says:

        To balance the reporting: http://www.theverge.com/2016/10/18/13317634/self-driving-car-accident-singapore-nutonomy-grab

        If there’s a place on earth that should be haven for self driving taxis, then it should be Singapore.

        • VK says:

          The technology will improve. Autonomous cars are the future. The global economy can’t sustain happy individual motoring for much longer. Last year only 10% of the oil humanity used was replaced and this year less than that has been replaced. We need to bring the global vehicle population down from 2 billion internal combustion engines to 400-600 Million. Autonomous vehicles will allow us to do that. And they’ll just make insurance premiums soar on individual car ownership so that they become unaffordable to own. The US is now back to importing over 10 Million barrels of crude daily, so much for the energy independence crap.

      • nick kelly says:

        Yes- just saw it. Would like to know more about it- intersections etc.
        If it’s just rolling down the highway, I’m sure it’ll work most of the time.
        I think for practical self-drivers, i.e., one that can replace a human completely, and go most places, you need a smart road. So the road could sense the presence of yours and other vehicles, very easy given proximity of so much metal to road surface. Much more reliable than video info.
        Also no need for GPS- road can tell car where it is. The car could maybe supply the power to road’s sensors/transmitters via radio signal over such short distance.

        I also think parking is going to be a major issue. I think the self drivers will need large dedicated parking, like a bus stop.
        I wonder if the beer truck completes the parking or just hands over and picks up a pilot at the end.
        I just thought of something- you could hijack it, or derail it into a ditch without hurting or even threatening anyone.

        Steve on Squawk Box Europe read one of my emails about Amazon’s proposed drone delivery -‘it would be fun to shoot them down’ ,
        His tongue in cheek reply: Nick, we cannot advocate illegal action.

      • night-train says:

        Wolf: My favorite part of the report I saw was that this tech will be used to help drivers make longer runs and increase miles driven during the run by reducing down-time. Sure it will. It will replace some, most, or all human drivers. Some at first, then most and finally all. The only question is how long the process takes.

        • Edward E says:

          A long damn time, because a lot of displaced drivers will know like me that it only takes one 0.173 cal bb to stop any truck.

      • kitten lopez says:

        yeah- saw the footage on tv and it made my stomach hurt.

  15. william says:

    Otto von Bismark revived the German economy in the second half of the 19th century with very high protective tariffs on imports. We are told many lies about free trade and the need to lower tariffs. Jobs could definitely return to the U.S. if it became a priority to our leaders.

    In my circle of engineers and engineers/MBAs, I see an ongoing exodus out of the tech industry into other fields like real estate and even nursing. These folks are extremely happy and paid well, while mostly spared of the flood of H1Bs and age discrimination tactics.

    • nick kelly says:

      If so- then the tariffs were not replied to by German competitors, e.g, Britain because Germany was rapidly becoming dependent on exports.
      In fact the ‘Made in Germany’ requirement sticker was the first such, insisted on by Britain as kind of early ‘Buy Local’

      For Germany to encourage tariffs even then seems counterproductive.
      Moving to the 20 th century- it was the Smoot- Hawley US tariffs imposed after the 29 Crash that are VERY widely credited with turning the Crash into the Depression.
      At the time over 1000 US economists signed an open letter asking Warren Harding not to sign them into law.
      Canada and Europe angrily cancelled orders and imposed retaliatory tariffs of their own.
      Getting back to Germany, it was especially tough on that country because it could not repay loans and reparations without exporting to the US.

      • RE: …it was the Smoot- Hawley US tariffs imposed after the 29 Crash that are VERY widely credited with turning the Crash into the Depression.
        While it most likely didn’t help the situation, it is highly unlikely Smoot-Hawley “caused” the depression, which in fact was the result of a combination of punchs to the U. S. economy, exacerbated by Federal Reserve policy, largely based on paleo-economic theory, and a misguided effort to help the UK economy, which was pricing itself out of world markets by setting the gold value of the Pound excessively high by restoring its pre-war valuation.

        The first jab to the US economy was the Florida land boom which collapsed in the early 1920s, Efforts to double down by the speculators and banksters to recoup their losses lead directly into the stock bubble, which imploded in September 1929, landing the first body blow of the combination which would KO the American economy. The bad effects of this asset bubble implosion were generally limited to the United States and foreign investors in the US market, and most of the losses were “paper” profits.

        Recovery had begun in the US by 1932, as the froth was purged from the system (at great human cost).

        The second combination punch was a blow to the jaw which did the damage and put the US economy down for the count, was the collapse of the global banking system [mainly Europe at that time] starting with Creditanstalt in Austria in 1933. The ultimate basis for much of the banking activity, and assets were discovered to be German War Reparations, which Germany could not possibly repay, and which had been concealed by managing/rolling over the rapidly compounding debt, which was no longer possible. [As Minsky put it, the tide went out and we discovered who had been swimming naked.]

        It was a situation analogous to the discovery of the A.I.G. Derivatives exposure in 2008 after the Lehman debacle, but no rescue funds were made available by the central banks, and the major depository banks and finance houses across Europe and the US, crashed and burned one after another, destroying enormous amounts of capital, producing the global “great depression,” uncontrolled deflation, and WWII.

        • EVENT HORIZON says:


          The asset bubbles, in both the Florida Land flipping, and the Stock Prices was possible due to “0%” financing. Plus, one margined up their paper gains, driving RCA to about $250/share……….then, the FED yanked away the “low%” rates and crashed the market.

          Hey, this sounds alot like today? No way the FED would be setting us up, again? This could not be intentional?

  16. Richard Hill says:

    Wolf, could comment on the difference between USA and German manufacturing?
    In Germany there are factories making autos and appliances etc, and paying high wages to the workers, why not in the USA?

  17. Bobcat says:

    I spent a couple decades in electronics until that industry got outsourced in it’s entirety to low wage countries. Then I spent a couple decades in software watching as some was outsourced and H1-Bs took the rest. The good jobs dried up a while back. A college degree today is only a guarantee of indebtedness.

    Now that outsourcing has run it’s course, automation is displacing workers. A large swath of the populous already lives in abject poverty with more joining their number every day. It doesn’t require too much imagination to extrapolate where society is headed.

    I highly recommend Martin Ford’s book, “Rise of the robots.” He discusses the displacement of not only repetitive factory jobs but knowledge jobs too and gives interesting examples. One surprising example was software that can write sports stories for newspapers and websites as well as any human writer. If there’s any justice in the world, lawyers are in for a rough time especially in areas like research and discovery.

    Never mind the left/right labels. The 800 lb gorilla in the room is the question, what will become of all these people? There is no discussion of this in America politics today. One can only imagine what the default solutions will be.

    • polecat says:

      you know …at the rate things are changing ….. and I will posit NOT for the betterment of society ….. a ‘Butlerian Jehad’ can’t come fast enough !

    • prepalaw says:

      You are correct – no politician or anyone in authority will even mention job destruction via automation technology.

      And, let’s get real: this process is accelerating for one basic reason:

      Most people want to do more with less. I am not selling my snowblower or my chainsaw and going back to doing hand work with a shovel or ax.

      I have no answer for any of this. There are supposedly 125 million people in the US working full time. If in 10 years, only 10% of existing jobs are destroyed, what will “we” do for these idle hands (and the new arrivals in the work force who can not find a vacancy). The dole. There are now too many people with nothing to do. They have too much time on their hands. What is the solution – possibly more entertainment.

      • EVENT HORIZON says:

        Bring back Gladiator Sports.

        • economicminor says:

          We already have them. After all, the Colosseums were for entertainment, death was mostly an accident (they didn’t have OSHA). So are foot ball, base ball, basket ball, hockey, soccer and big rock festivals.

  18. LG says:

    If Trump is elected the jobs will come back!
    It is possible to manufacture in the USA!

    • AeroFX says:

      LOL!!!! Have another drink. He is no diff than any other ‘capitalist’. He is a cartoon. He has zero power to bring a single job back. His trailer park supporters simply failed civics, econ 101 if they ever made it out of 5th grade to begin with.

      Automation is 10 years ahead of Trump and his attitude. He sells the dream that died years ago LOL.

      Time to tax all automated systems and make the Corporations who employ them pay SS and Medicare on each and every system and individual robot. The Gov needs to get ahead of this now. It wont be pretty if they dont.

      • LG says:

        You’re wrong Aero!
        He will stop any large corporation to leave!
        As for making it here in the usa, it is all doable! You just don’t understand sourcing , manufacturing
        marketing and selling .

        • economicminor says:

          He can’t stop world trade. It is after all a two way street. We sell to the world and they sell to us.

          Anyone who suggests we could bring *our* jobs home is ignorant. Our largest export is agricultural. So we become isolated and then what? We shut down half our farms? Or double our population so that we can utilize our own production? Never going to happen. Magical wishful thinking by ignorant tin foil hats.

          We need a new story a new direction. The old one has run its course and hit a dead end. More and more growth means more and more pollution and environmental degradation.

          What is all this about? For a few to live like royalty and the majority to live lives akin to Dickens? The Marie Antoinettes have no clue and their followers are ignorant wishful believers in a faith called Capitalistic Democracy which is neither Capitalism nor real Democracy. We the People really don’t matter and we only get to vote for one the elite have chosen for us or in the case of The Donald, one of the elite who has run amuck.

        • economicminor says:

          Germany tried to have a one way trade. They would send their products to southern Europe and then loan them money to buy them with.. Now they are attempting to foreclose. Greece is an example of what happens when you only export and not import. Yet Germany needed to have customers for all their production. It really is a two way road and can not be otherwise or you end up in disasters like in southern Europe.

      • EVENT HORIZON says:

        AeroFX, tell us how Hillary is going to do it?

    • night-train says:

      Did you even read the article? Neither candidate is going to alter the rise of automation. The only question on the table is how society will deal with the consequences.

  19. wkevinw says:

    There is supply, demand and price mediating the two. If the demand for something is roughly the same, and we have a much lower price of production, in a market economy, the price goes down.

    That is what is missing- price behavior for the customers. If all these automation stories are so profound, we should be seeing gigantic price reductions in various manufactured items. I don’t think we are seeing that.

    So, there is something else wrong in the markets for real goods. It is probably related to the financialization of the markets by central banks, etc.

    If the prices for a lot of things gets reduced, then the job losses (lower price for labor in the short run), are mitigated by price decreases in the products. If that doesn’t happen you get (apparent) poverty.

    If you have a free market, the short run disruptions are self-correcting, and people re-direct their economic activities to other things that create value (jobs, sales, etc.), in the long run. Then things work out productively. Without proper price behavior you can’t have a functioning economy.

    In the short runs, the “Luddites” are right- in the long run they are wrong- IF you have a functioning free economy.

    That’s where the disconnect is.

    • Flying Monkey says:

      “That is what is missing- price behavior for the customers. If all these automation stories are so profound, we should be seeing gigantic price reductions in various manufactured items. I don’t think we are seeing that.”

      The productivity improvements are being usurped the the expulsion of Government debt and by money printing of the central banks, increasing the money supply in excess the supply of goods and services.

      There would be a in constant slight deflation due to productivity increases and technological improvements. The Government counteracts that be increasing the money supply causing monetary inflation to counter balance it.

    • MC says:

      Those gigantic price reductions would be there… it’s just that inflation is eating all of them up, and then some, and that our wages just cannot keep up.
      You can easily see how depserate for cutting costs manufacturers are. Example: twenty years ago I bought a Merkur razor. It came in a waterproof plastic case and with ten spare blades. A few weeks ago I bought exactly the same razor (dropping it on the bathroom floor for twenty years hasn’t helped). The overall price is just 13% higher, but it came in a very thin cardboard box and with a single spare blade.
      DOVO, the razor manufacturer, has done everything to avoid rising price too much and, short of shipping production to East Asia, there’s little fat left to trim.
      You can see such process at work everywhere: materials aren’t that good anymore, finish isn’t as durable as it once was and the Grocery Shrinking Ray keeps on hitting. You buy the same bag of dried pineapple at same price but while once it contained 200g, not it contains 175g, which translates in 12.5% unreported inflation.

      • EVENT HORIZON says:

        The price of the Razor did not change. OK, let me re-phrase that: The VALUE of the Razor did not change. The paper notes you used in exchange for the Razor changed.

        In reality, in the last 20 years, the true costs to make that Razor and 10 blades has drastically gone down, but not as rapid as the loss of value of the paper notes. The paper lost value faster than the true production costs, thus you have to hand over more paper for less product.

        Don’t blame me. Blame the FED

  20. Konstantin KS says:

    It’ s inevitable. It’ s just getting rid of your system’s problem to other systems. Whenever an employer of any type cuts human costs, consumption is affected. In essense, he transfers his cost to his peers at first, then goverment (tax payer) and last to his own business’ future. Future is now happening.

  21. Flying Monkey says:

    The US is the greatest manufacturer and exporter of dollars. The quality is unsurpassed. We use the best quality cotton paper in the world. If you look at US exports, that is America’s leading category.

    No one can touch us in manufacturing dollars.

    As long as the world demand is there for dollars, we needn’t worry about manufacturing other things. The money to pay for things will take care of itself.

  22. Duane Snyder says:

    Isn’t the main story the US trade deficit? No mention of it made in this misleading article.

    • Wolf Richter says:

      Re-read the article. You’ll see how the article suggests this will work out: trade in manufactured goods will decline because you can make them locally for the same price and not have the transportation costs. Production at these plants costs the same in China, the US, and Africa – that’s what the article is saying. So imports and exports of manufactured goods will necessarily decline.

      • If you manufacture/produce locally you lose the ability to evade taxes by transfer pricing by using a trading company in a tax haven, where the profits accumulate tax free.

        These shielded funds can then be “loaned” to the parent corporation w/o the need to pay taxes, and the interest is tax deductible in the U. S. so the taxpayers subsidize 1/3 of it, while all of the interest is a paper cost only. While Apple is the poster child for this, there are many others.

        • d says:

          No you dont.

          The licenses, to make the goods, are held off shore.

          Goods on paper cost 1 dollar, and license cost 10 dollars, goods sell to retailer for 11 dollars. (apple among others, are already doing this)

          Company never makes a taxable profit in the US, or any other high taxing nation, then add your usage of fund’s spiel.

  23. Paul says:

    There is an at first partial solution that will solve the problem at least for one country who acts first.

    If we take NASA public we will raise $600-800 Billion that will start hundreds of new companies and create many millions of new jobs. It will eventually pay off the national debt and even save the environment.

    But try and get any of the morons in charge to even listen for a few seconds and that would be a miracle.

    Taking NASA public would create a new industrial revolution around the commercialization of space. The technology is already there they just need the money.

    Let’s face it, the US government is broke and incompetent. If NASA becomes public it would be the driving force to kick start the entire process.

    • mikey says:

      Unlikely since the innovation in space is coming from much smaller organization, even from hobby groups formed by individuals like Musk and Bezos. NASA was third reich effecient at first since thats where they came from. Now it is like the post office. Not many large organizations can remain efficient after decades of affirmative action with major decisions determined by politicians interested mainly in getting re-elected.

    • George McDuffee says:

      While “privatization” may appear to be a “panacea” to fans of Ayn Rand and Milton Friedman, the Washington Consensus, and reactionary Neo-Liberalism [US Neo-Conservatism], the “privatization” of government owned assets/enterprises never delivers the promised benefits to the large majority of people, however it does make a few people extremely rich.

      In almost all cases “privatization” has resulted in job reductions and wage/benefit cuts for the employees, and reduced service/quality to the customers with higher prices, where ever this has been done. The latest example of this can be seen at http://www.motherjones.com/environment/2016/10/private-water-pittsburgh-veolia.

  24. Automation as it is today does not bring about lower prices for the consumer, it brings about higher profits for the corp. Anyone watch shark tank. Whenever someone makes some plastic crap they eventually send it to china to get mass produced. They say “it costs me $3. made and delivered” “I sell it for $29. at the big box stores.” The sharks love it, and there is never a mention of bringing it to market for less as long as there is no competitor. This is also an invite for a competitor too…..

    Anytime I go shopping – every item I see I think “that costs $.40 to make” or whatever it may be. And I see a 400% or more markup and I just end up buying as little as I can get away with…….


    • RD Blakeslee says:

      That’s been my experience, also.

      I make as much of my “manufactured” goods and my food and fuel (firewood) as I can…

  25. Chris from Dallas says:

    WAKE UP. These changes have been predicted since AT LEAST 1970 with Alvin Toffler’s Future Shock.

    Let’s all stop COMPLAINING so much and start suggesting practical and IMPLEMENTABLE solutions. I believe that the human race, and especially the U.S. and Canada, will somehow muddle through. If I had to guess, it will be a change to the tax code to tax production/support consumption, and an expansion of Social Security into some kind of Universal Basic Income.

    Positive-oriented people will expand their horizons into the arts, community service and self-improvement.

    A large majority will check out with ever greater legalization of drugs and the widespread use of VR.

    The FACT is the genie of EXPECTATIONS is out of the bottle all over the world. And despite TPTB attempts to distract the “sheeple” more and more people worldwide aren’t buying their false promises.

    It is now up to scientists and engineers (and yes, the hated business people) to deliver solutions. For that, capitalism is still the best solution.

    • Petunia says:

      I read that back then too. The remedy then was the same as now, guaranteed minimum income and more leisure time.

      • d says:

        Toffler wrote

        guaranteed minimum income and more leisure time.

        As population management and genocide were, and are not, saleable term’s.

        Corporates are not going to make all that investment and them hand over the return’s and the state bureaucrats wont either.

        Once the population level is reduced nicely, through management, or other wise. Many of the issues we face, apart from a sea level rise. Will go way by themselves.

    • EVENT HORIZON says:

      I would write: Free Enterprise Capitalism “is still the best solution”.

      • George McDuffee says:

        RE: I would write: Free Enterprise Capitalism “is still the best solution”.
        While this is a frequently expressed opinion, which may well have been correct at one time (given the existing alternatives), one must now ask if it still is, given the enormous (and accelerating rates of) socioeconomic/cultural change.

        Indeed, it is now necessary to parse/deconstruct every word in the simple phrase “Free Market Capitalism,” before a meaningful discussion can be held.

        How much econometric/analytical work has been done, using the available data/metrics such as GINI Coefficient, per capita GDP, infant/maternal death rates, PPP median individual/family incomes, median age at time of death by gender, crime rates, debt levels, growth rates, unemployment rates, etc. to objectively compare and contrast American style “Free Market Capitalism” with any of alternative socioeconomic systems.

        FWIW: as these “other” societies/economies may not be equally developed, it will be necessary to use the data/metrics from equivalent stages of development for a meaningful comparison.

        “Justification by Faith Alone” may be admirable in Theology, but it is totally inadequate in Politics, Economics and Sociology if disaster is to be avoided.

  26. NY Geezer says:

    The unending years of winless USA wars since 9/11 that has drained and continues to drain the US economy makes no sense unless this is the means chosen by the US Government to provide blue collar middle class jobs to replace the blue collar jobs lost to globalization and automation.

    Blue collar war jobs to replace blue collar manufacturing jobs is a terrible idea when there are so many non war related blue collar jobs that could be created to repair worn out or outmoded infrastructure.

    Blue collar war jobs are bad for our economy and very bad for civilization since they create failed states with Islamic war bands in the middle east and Afghanistan and Nazi leaning war bands elsewhere. Moreover, these war jobs are by their nature temporary not because the wars end, but because war workers get used up fast. They also create many disabled war workers, a lot of whom are homeless and angry and trained in warfare.

  27. mvojy says:

    Thanks for all of your enlightening views. Has anyone seen the movies “Idiocracy” or “Wall E”? In those movies the future shows little productivity by humans and they are rewarded credits for their activity which is mainly watching television or buying something they don’t need. That is what the future holds. Plenty of automation for production while humans are given credits/points for participating in the consumer cycle.

    • kitten lopez says:

      yes, this is what has horrified me: that the links of passing on teaching/self-reliance/and agency are broken in the newer generation. i never thought it even possible.

      • mvoj says:

        I’d settle for the walking dead future over the fat lazy hovering dullards that those movies portrayed

  28. Posa says:

    Dubious stuff. The potential US workforce is about 165 million. The number of industrial robots is about 30,000.

    The newest auto plant in the US is the VW campus in Chattanooga. The plant is expanding to over 3500 workers, with almost an equal number of workers in supplier industries.

    That’s not going to change anytime soon. The major employment problem today owes to lack of effective demand from a pauperized population. That can change with better economic policies that are not drafted by Wall street predators.

    Likewise the prospects of robots replacing construction workers is not viable now and won’t be for a while. $5 trillion of infrastructure spending will keep Americans employed for years and years.

    Dumping products made by virtual slave labor can be halted easily — it’s not trade, it’s wage arbitrage. Trade partners should be largely restricted to those with comp[arable wage levels and environmental standards.

    This isn’t rocket science. Full employment at high wages is attainable. It’s a political, not a technical issue.

    • economicminor says:

      “Dumping products made by virtual slave labor can be halted easily — it’s not trade, it’s wage arbitrage. Trade partners should be largely restricted to those with comp[arable wage levels and environmental standards.”

      The real problem with dumping is that by the time any concerted effort is made to curtail this practice the industry in the dumped upon country is now gone. Steel is currently being dumped as is solar equipment. Solarcity in Germany is already laying off and the US solar industry is hurting. Steel mills in the US have already shut down. It is a long process to curb dumping.

      There really are no good solutions. World trade against an aggressive state run systems was never a great idea but untangling ourselves from it will not be easy nor quick. The best piece of it is where trade crosses borders armies don’t.

      • EVENT HORIZON says:

        Dumping was refined (joke/pun intended) by Standard Oil in the 1870’s. In markets where they had no competition, since oil/kerosene transport was still inefficient west of the oil regions, Standard Oil raised their prices.

        In areas with competition, the South East with Empire Oil (owned by the Pennsylvania Railroad), ACME Refinery of New York, etc. they cut prices and took a loss (made up for by the higher prices in the West.

        By the time the competition could respond and fight back, they had no market, thus they combined or sold out to Standard. Very simple and logical business.

        OH, leasing up ALL available Oil Tanker Cars, thus depriving your competition any way to get oil in or Kerosene out of their refinery, was awesome. You only had to lease all available tankers cars for about 3 months and you have bankrupted them. Clever.

        Price is everything.

  29. Maximus Minimus says:

    This factory making small metal clamps is not representative of manufacturing trends. A better example would be a car factory, or a heavy truck factory.
    For an example, search for Volkswagen transparent factory.
    Another example, self-driving haul trucks in open pit mines.

  30. Resonate537 says:

    Early in the 20th century the US went from an agrarian economy to a manufacturing economy. Most workers were farmers, ranchers with related skills. As steel manufacturing, railroads, electrification, banking developed, people moved from rural areas/agrarian jobs to cities/higher skill jobs.
    The great depression occurred in the middle of this transition which took a great toll on millions of ordinary people. However, people demonstrated their resilience by moving away from rural areas with little/no economic opportunity, learning new skills, and building new lives in urban/industrial environments with better opportunities.
    Millions of agrarian jobs were lost due to huge increases in farm/ranching productivity (tractors, farm equipment, rail & trucking transportation, etc). Over time millions of new jobs were created in mills, factories, commercial businesses. The creation of these jobs occurred not in accordance with some preconceived plan, but largely on an ad hoc, trial & error basis.
    All of this was very messy and painful for most people. But life is not changeless, simple, risk free or painless. Never has been in all of human history.
    So now we find ourselves in the midst of a new round of change/turmoil. There is no preordained plan, no roadmap, no riskless way forward.
    Survival goes not to the most intelligent or the strongest but to those most adaptable to change. So buckle up, quit feeling sorry for yourself and get moving, or else…

  31. Wolf Richter says:

    But the fact that they’re making these cheap little clamps in the US at a cost that is competitive with the cost in cheap-labor countries actually makes one of the points of the article: that even cheap easy-to-make items can be made competitively via automation in countries where the cost of labor is high.

    Hence those jobs don’t just disappear from the US. They disappear globally.

    • kitten lopez says:

      “Hence those jobs don’t just disappear from the US. They disappear globally.”

      whoa… it took me three readings and loooong time in the bath tub to FINALLY get what you’re saying. i’m still many steps BEHIND.

      i can’t even wrap my head around all this and what it MEANS because there are SO MANY PEOPLE NOW.

      • EVENT HORIZON says:

        Those specific jobs have disappeared, like wagon makers and horse harnesses, for the most part, but there will be other jobs.

        Who ever thought that 50 years ago, a company that fries hamburgers for you, would have 25,000 locations?

        50 years ago, if you told Sears three would be a chain of 3,000 stores with 2 MILLION employees? They would have laughed at you. Today, Sears is the Walking Dead.

        Or a place that makes Sub Sandwiches, for you, would have 5,000 locations? Or that people will drive up to a window, on the way to work, to buy coffee and donuts?

        Everyone of these places has a manager, assistant manager and owner making good money. It takes numerous area/ district and regional managers to make 25,000 hamburger stands work. They get paid Middle Class wages.

        There are jobs begging even today for someone to do them. Perhaps too many people think they are too good for these jobs? Considering most college degrees are worthless, then perhaps, you have been tricked?

        • Wolf Richter says:

          Have you seen how automation is creeping into fast food? The technology is already on the shelf. Once it’s cheaper to replace labor with machines, it will happen.

  32. mvojy says:

    The looming question is: What jobs will most Americans have in the future?
    Certain industries obviously can’t automate and will always need labor. There is currently a shortage of skilled labor in construction since most students are choosing to take out federal student loans to get a college degree that may be obsolete 20 years from now. We need more students to go to trade schools where there will always be demand for labor.

  33. Tom Kauser says:

    more buggy whip!

  34. Ishkabibble says:

    I want to take a mind trip. I want to compare two worlds – the earth on which we live and another planet that is identical to ours, except that in that solar system there has been a solar event whose radiation has not only instantaneously killed all of the people on that planet, but, amazingly, also slows down the physical deterioration of any of the things that the planet’s deceased inhabitants created.

    Hearing about the calamity on the twin planet, millions of people from our planet, who just happen to be unemployed ex-technicians from various professions (yes, a very competent bunch), jump into spacecraft and fly to that other planet. But before they leave they agree that all of what is on the other planet will be “owned” equally among them and used for the good of all. (Yes, you’re right, that is exactly where I’m going.)

    Just like there is on this planet, there is an internet on the other planet, so the immigrants instantly realize that a so-called representative government will not be necessary …………. on the other planet. In that place there shall be direct democracy. People will hammer out important decisions among themselves using the internet as a means of virtually instantaneous, mass communication. (Ah yes, “human nature” will certainly be tempted in this new Garden of Eden.) There will be only one “nation” on one new world, so human beings will either sink or swim together.

    After the new immigrants arrive on their new planet, using existing transportation systems, they disperse all over their planet so that they can get their new (old) machines up and running; fields plowed and planted; hospitals operating, etc. (Yes, it wasn’t easy. But with the common good in mind, people were successful. Just accept it for the moment.)

    The immigrants soon realize that it takes very few people (far fewer than immigrated) to keep the machines running, food on the table, etc., and, with some more design engineering, even fewer people will be required as time goes on. Not only that, but the products of these machines can be made to a much better quality then they apparently were previously, so these products will last far longer. As a result, it is realized that perhaps some of the huge machines can be operated far less-frequently than they used to be. For example, automobiles soon come to be made much simpler, easier to fix and more reliable. They have a FAR greater useful lifespan than they once had.

    The people enjoy leisure time, developing their artistic abilities, playing games and other non-productive activities.

    Rather than unfairly have the same small number of people constatnly toiling on the machines, the people decide to divide up, or “distribute”, the LABOR that is necessary to operate the machines, plow the fields, construct buildings, roads, etc. That is, EVERYONE has to work on the machines, etc., but for only a short period of time each year. And as the machines get improved and further automated, even less labor is required and, therefore, even more of each individual’s time is “free”.

    The newly-designed machines in this new world come to do almost all of the things that must be done, and the “profit” from the machines – leisure time AND the products of the machines–is equally divided among ALL people.

    Naturally, some of the leisure time is used for training all people in the variety of tasks they will be undertaking – everything from brain surgery to sewage treatment. Apprenticeship and training via video (just like Youtube on planet earth!) are found to be the ideal ways of training people. It is soon discovered that most medical and dental procedures can be either performed by robots or learned in a fraction of the time once thought to be absolutely necessary.

    Through apprenticeship and video “schooling”, the population becomes very intelligent, so they soon realize that by reducing their own population by slow attrition – by having only one or two children – the remaining population has even LESS to do (less water treatment, housing, electricity, food, everything), so because there is even LESS labor to divvy up, their descendants have even more free time to themselves.

    These people’s newfound religion is two-faceted — the Golden Rule and the continually-evolving simplicity, ease-of-use, and, most importantly, high-quality-construction and, therefore, long usable life, of the products they create. They strive to manufacture things ONLY ONCE — things that with simple, inexpensive maintenance, last FOREVER.

    Transportation systems move people to and from the machines and other places where labor is needed, as well as moving people about the planet for other less practical reasons.

    Life is great in the new world.

    Meanwhile, back on Mother Earth, living and working conditions continue to deteriorate and wars still drag on perpetually for no discernible reason — all of this madness seemingly being orchestrated by the invisible hand of an omnipotent god.

  35. Bob M. says:

    A very myopic view of automation. The Luddites of the UK would be proud! So who made the automation equipment, who installed it, programmed in and who maintains it. In the short term, yes there are job losses. In the longer term, more high skilled and high paying jobs are created to replace the previous jobs. Why is that? Simple: massive gains in productivity = higher wages.

    • night-train says:

      Bob M: “Simple: massive gains in productivity = higher wages.” That statement should be true, but has not been so in recent years. Increased gains in productivity have gone largely unrewarded, except for the top execs.

    • VK says:

      For the last 30 years this has not been the case at all. Just a simple google search for wage level vs productivity will falsify this claim. The rewards have all accumulated to the top 20% at the expense of the rest of society.

  36. James Murray says:

    I left two things out of that article because I couldn’t find enough information to defend it.

    1. I suspect that the Chinese were using labor instead of automation. If so, do you think that 600 people lost their jobs in China?

    2. I know that the US import number dropped some when the manufacturing came back to the US. What I couldn’t find out is if that factory makes enough, cheaply enough to be in the export business now.

    • d says:

      “2. I know that the US import number dropped some when the manufacturing came back to the US. What I couldn’t find out is if that factory makes enough, cheaply enough to be in the export business now.”

      That dosent matter,

      The chinese exporter will still need to adjust margins to counter the effects of a lost volume base, unless as usual.

      They are state funded, where the operation is about employment for chinese, and destroying other nations manufacturing capability’s, not fair profitable trade.

  37. Ptb says:

    Is the author related to Charles Murray?

  38. Simona says:

    The Amish will survive.

    • d says:

      The Amish will do much better than just survive.

      Most of them dont have Mortgages or Clan/Church finance against their land either.

      Only fool’s measure Wealth simply in Financial term’s.

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