It’s about time. We probably need to go even faster, like face melting faster to remain competitive/relevant. Frankly though, this is just one of the dimensions. There is also the “people will need to work harder” dimension. That will be a harder adjustment for people. Nevertheless this is a good news
The US is building factories at a fast rate
131–140 of 309 posts
Re: The US is building factories at a fast rate
#132This is CHIPS and IRA at work, largely. The government decided we needed more manufacturing, paid people money to do that, and... now we have more factories and manufacturing jobs. People get all balled up over policy decisions like this because of politics, but the truth is that Keynesian economics is pretty simple to understand and it works exactly the way you'd expect it to work.
> This is CHIPS and IRA at work, largely That's what the article says, but the chart in the article casts quite a bit of doubt on that explanation (it's obviously an accelerator). Indeed, two paragraphs later, the article states "Census Bureau data reveals manufacturing construction spending has escalated from January 2020 until April 2023 in every region except New England and the Mid Atlantic." If you assume that p…
First, the rise in spending is 2x. That's a huge effect, and there's nothing in 2019 that would explain it reasonably. And it only leads the bills' enactment by a few months. Isn't the more obvious hypothesis that people started investing speculatively a few months ahead of the bills? I mean, these bills largely amounted to campaign promises. It was abundantly clear after November of 2020 ensured a trifecta government that something along these lines was going to pass.
Second: you're basically making stuff up with that 2019 argument. That's not the way incentive spending works at all. If you have free money on the table as a corporate executive you record that revenue immediately, you don't put it in the bank to "plan". In fact, most bills like this make it largely impossible to "save" the funding anyway, and for exactly this reason: politicians want their results now, now in the next administration.
Re: The US is building factories at a fast rate
#133> The US has added around 800,000 jobs in manufacturing employment over the last two years, employing around 13 million workers It's too early to know, but if it turns out the solution to decades of economic misery for middle class blue collar workers was 1. 50% tariffs on China, and 2. $100B of subsidies to chip makers and green tech... The reversal of Reaganomics we're living through will become permanent for at le…
Another important factor is that China's workers make more money than they used to, especially relative to the West. There's not as much of a cheap-labor-arbitrage opportunity as there was in the early 2000s. Here's a chart illustrating this point: https://i.insider.com/532ccb18eab8eadc39f33da6
It also doesn't hurt that advanced robotics (an area the west has traditionally done well in, sometimes being more advanced) has continued to have breakthroughs.
"lights out" manufacturing[0] can happen with more and more things. The humans in the process can become minimal (thus shifting more costs to fixed capital costs rather than variable costs)
[0]: https://www.roboticstomorrow.com/article/2016/10/is-a-robot-...
Re: The US is building factories at a fast rate
#134Earlier quoted context omitted.
I really envy anyone working in Industrial Robotics. It's such a fascinating field. Automating physical things is so much more rewarding than automating digital things.
Maybe not surprisingly, the real money in this field is in maintenance and ensuring uptime. The robots are cool to develop too but its really hard to get a job doing that directly unless you're a startup with funding from a VC or have an incredibly good resume, but there is a cottage industry of people (businesses or business units usually) that make lots of money maintaining deployed fleets and developing patches /…
Maybe it's different where you live, but here in California you don't need a degree to do industrial robotics. It certainly doesn't hurt, but unless you're in controls people aren't too picky.
You would make more in webdev or ML though.
Re: The US is building factories at a fast rate
#135Meanwhile in China: - exports plunge by 7.5% in May, far more than expected https://www.cnbc.com/2023/06/07/chinas-exports-plunge-by-7po... - profit tumbles 18% in April https://www.reuters.com/world/china/china-industrial-profits... - chip progress stagnating. Oppo chip design unit completely shut down https://techcrunch.com/2023/05/12/oppo-chip-disbands-phone-c... . Japan stops shipping semiconductor equipments to…
8 million babies for a population of 1.2 billion? Woah. Back of the envelope, that's something like half replacement rate.
Not sure where he got his stats from, but 9.56 million sounds about right.
https://news.sina.cn/gn/2023-01-17/detail-imyanfvn6707213.d....
(Figure 3)
2017 - 17.23 million
2018 - 15.23
2019 - 14.65
2020 - 12.00
2021 - 10.62
2022 - 9.56
Note that this is official Chinese gov statistics. Their numbers are known to be untrustworthy.
Re: The US is building factories at a fast rate
#136Earlier quoted context omitted.
Exactly. The factories follow the Cheap Labor. From US to China, then it was China to Thailand/SKorea, then from Thailand to India. Probably don't have chain correct, and it is different for different industries. But there was definitely a progression of 'local salary goes up', 'time to move to next cheapest country'.
Surely though there's still plenty of places in the world that, on the basis of labour costs, it would be vastly cheaper to operate than in the US. On that basis I'm not convinced wage growth in SE Asia is the primary reason the US manufacturing industry is deciding to reshore. Is the same phenomenon occurring in other wealthy countries that haven't put in place taxpayer funded incentives to do so?
They’re deciding to restore because the US population has made it clear on both sides of aisle that they want these companies to be employing Americans to start reversing the economic rot we’ve left outside a small number of tech hubs. It has nothing to do wages or even economics for the most part. It’s policy to rebuild once wealthy areas of America that also happens to be good for the defense sector so.
Re: The US is building factories at a fast rate
#137This isn't necessarily the win that some people think that it is.
Do you like your standard of living? For most, you should when compared. That comes from one type of economy. This is another type, incoming. And there are no guarantees as to what your change in standard will be.
One rhetorical question might be: is your standard of living better or worse than in China, which is replete with factories? Neither does Bangladesh have a factory shortage.
Who owns the factories being built? It will surprise some to know that foreign ownership will be heavy.
One objective trend is foreign pressure to reduce the cost of exported goods, which means foreign buyer downward pressure on wages as exported goods make up larger portions of the economy.
Don't expect wages to be in Federal Reserve Notes. Do expect a continuing rise in corpocracy and feudalism. Do expect large pools of immigrant labor that will serve to minimize wages.
Re: The US is building factories at a fast rate
#138Earlier quoted context omitted.
Exactly. The factories follow the Cheap Labor. From US to China, then it was China to Thailand/SKorea, then from Thailand to India. Probably don't have chain correct, and it is different for different industries. But there was definitely a progression of 'local salary goes up', 'time to move to next cheapest country'.
Surely though there's still plenty of places in the world that, on the basis of labour costs, it would be vastly cheaper to operate than in the US. On that basis I'm not convinced wage growth in SE Asia is the primary reason the US manufacturing industry is deciding to reshore. Is the same phenomenon occurring in other wealthy countries that haven't put in place taxpayer funded incentives to do so?
Folks bring factories back to the US once they scale to the point that automation can be afforded. It has a high buyin, so volume has a threshold where the marginal cost is justfied.
In all those cases, there's little or no job growth. Just a couple administrators and engineers. Nobody on the line, because there is no line, just robots and conveyors.
Re: The US is building factories at a fast rate
#139Earlier quoted context omitted.
>> Yes, that was the point? The original post's point seemed to me to be "Reaganomics was bad for manufacturing jobs", and listed tariffs and subsidies as two things that are good for manufacturing jobs that were a reversal of Reagonomics. Do you agree that was the original point? But Reagan implemented both tariffs and subsidies that were good for manufacturing jobs. So how are tariffs and subsidies a reversal of Re…
My point is this part: "Outside of the more immediately-public-facing stuff like tax cuts, Reagan's legacy is very much a "do what we say, not what we did" situation." A common definition is something like "widespread tax cuts, decreased social spending, increased military spending, and the deregulation of domestic markets" - https://www.investopedia.com/terms/r/reaganomics.asp - and in common parlance it is heavily…
But the tax cuts haven't been reversed. The top marginal rate when Reagan took office was 70%, it has been between 35% and 40% for the last 30 years. So where is the reversal of Reaganism that explains an increase in manufacturing jobs?
Where is the economic statistic that you can point to as being X during the Reagan years that was recently changed to Y, and that you think explains the increase in building factories over the last two years?
Re: The US is building factories at a fast rate
#140Earlier quoted context omitted.
Yeah and that's not the crazy part. There's a 50% drop in marriage rate in 2023 compared to 2022.
Source? I see marriage rates falling by about 50% over the past decade. But this claim seems unlikely, or perhaps just badly skewed by the seasonality of things.
He is probably talking about the "520" Marriage Day. May 20 is a popular national marriage day (due to tradition) and many couples choose to get marry on that day in China.
This year's 520 marriage rate is ~40% of last year's.