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The US is building factories at a fast rate

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Re: The US is building factories at a fast rate

#181

Post by hotpotamus »

api wrote: post #19
obblekk wrote: post #2

> 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…

Part of why the US working class has been so angry isn't just the economic misery but the decades of being gaslit by politicians pretending that outsourcing to countries with no OSHA, no EPA, no concerns about carbon emissions, no workers rights, no unions, and radically lower wages is going to create jobs in America. It's a clearly absurd proposition on its face. Of course that's going to depress wages and destroy j…

The US is wealthier than ever and unemployment is persistently low. My fairly simple analysis of those two facts leads me to believe it's not a lack of jobs, but inequality that drives the misery.

Re: The US is building factories at a fast rate

#182

Post by dirtyid »

pphysch wrote: post #161
marianatom wrote: post #11

Meanwhile 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…

Despite all these cherry-picked numbers, China's economy will grow by 4-6% this year vs. USA's 0-2%. https://www.barrons.com/articles/us-growth-gdp-china-economy...

It's also fundementally omitting how much PRC has entrenched itself as global factory than ever.

PRC exports to US/west near record highs while trade with global south have exceeded western bloc. The only reason export decline notable is because PRC exports has increased so spectacularly in the past few years (export value grew from 2.5T in 2019 to 3.6T in 2022) that there's nowhere to go but down when global economy underperforms. Net export value is still up ~40% since 2019 - exports stats can be confirmed bilaterally. PRC exports grew as much in last 4 years (~1T) as it did in decade between 2008-2018 (1.4T-2.4T). Meanwhile US increased imports from "friendshore" countries mirrored PRC increased exports to those countries, i.e. it's tarrif engineering and US import dependence on PRC ultimately still increasing.

Re: The US is building factories at a fast rate

#183

Post by mhuffman »

marianatom wrote: post #126
mhuffman wrote: post #99

Earlier quoted context omitted.

> China is no longer the "world's factory". It will stagnate for 10+ years, similar to Japan's lost decades, but with worser birth rate than Japan today. idk, Japan seems like it thought the party would go on forever, whereas China does seem to have clear eyes with it comes to world politics (eg. long-term investment in the rest of Asia and Africa). > We've never seen a large portion (25%+) of a large modern economy…

> China does seem to have clear eyes with it comes to world politics You're hyping up Xi Jing Ping, who is considered an idiot in most elite circles including Putin, too much. One belt and one road is now considered a failure with Italy, the most prominent member, dropping out of it this year. Most of the countries that took on the debt are unable to pay it back, and China has had to forgive a lot of the loans recent…

>You're hyping up Xi Jing Ping, who is considered an idiot in most elite circles including Putin, too much.

I don't really care what Putin says but I do think they are thinking more long-term. Only here and in Europe do people think in terms of election cycles. Don't get me wrong, I am not a Xi fanboy, and I definitely don't want to the US to be like China in general terms, but I just disagree with you. I think they know that the US-centric money flow was capricious and they have been long making plans for when it isn't what it was.

>with respect to NAFTA, US manufacturing only consisted of 15% US economy in 1994 https://www.stlouisfed.org/en/on-the-economy/2017/april/us-m..., whereas Chinese manufacturing consisted 30% of China's economy today.

Now, put those in real numbers and you will see the effect! Also, do you not think 15% of the world's biggest economy taking a fucking as being significant? We had to pivot to service industries after that!

I can tell that you have a hard-held opinion on this and I am not fighting with you, I just think that your original post was not as nuanced as reality.

Re: The US is building factories at a fast rate

#184

Post by mrits »

revskill wrote: post #59
Animats wrote: post #24

Nice. China becomes less of a competitor on costs as wages rise there. Once the manufacturing wage differential gets into the 4:1 range, offshoring is less attractive. In the 2:1 range, offshoring starts to be a lose. That happened with Japan two decades ago.

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Re: The US is building factories at a fast rate

#185

Post by throw9away6 »

nojvek wrote: post #123
no_wizard wrote: post #116

Earlier quoted context omitted.

I had a professor remark once (this is circa 2009) that we should all learn a highly skilled trade around advanced manufacturing because eventually offshoring will reverse itself and by your early 30s you'll be in a prime position to profit immensely off the re-shoring of advanced manufacturing equipment and processes Maybe he was right. I'm in my early 30s now, and I don't regret becoming a software engineer, but al…

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.

Meh Pay is better in programming. Fun fields part peanuts

Re: The US is building factories at a fast rate

#186

Post by throwaway2037 »

FrustratedMonky wrote: post #57
alexose wrote: post #32

Earlier quoted context omitted.

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

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'.

I would add Viet Nam to that list. Lots of low cost / low value goods have moved from China to Viet Nam in the last ten years. Plus, the gov't is pro-business. Communist in name only.

Re: The US is building factories at a fast rate

#187

Post by throwaway2037 »

alexose wrote: post #32
obblekk wrote: post #2

> 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

That is a great chart! My only regret: I wish it went from 2000 to 2023. The gap would be staggering -- maybe 5x.

Re: The US is building factories at a fast rate

#188

Post by sacnoradhq »

activiation wrote: post #114
jakearmitage wrote: post #7

OK, now we need immigration reform to actually get enough people to work on everything.

I worked for a while at a farm processing potatoes ... Let me tell you that they aren't lacking Mexicans (most people didn't speak English and this was in Florida)

I think they're trying to say "an efficient and effective process that treats guest workers less like criminals at the mercy of big ag." There are many interests who benefit from keeping undocumented people undocumented.

Re: The US is building factories at a fast rate

#189

Post by throwaway2037 »

bobthepanda wrote: post #111
wizofaus wrote: post #78

Earlier quoted context omitted.

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?

Japan and Korea have plenty of domestic manufacturing. Europe also has some off shoring into the peripheral countries into its customs union. The issues are generally that in the next largest potential cheap manufacturing sources (South Asia, SE Asia, Africa) they’re either not big enough or have extremely poor logistics and red tape. A big part of the East Asian miracles have been extensive infrastructure and bureau…

    Japan and Korea have plenty of domestic manufacturing.
This is industrial policy, not free markets. Both countries strongly encourage domestic manufacturing (including farming / food production) through a wide range of social pressure ("lifetime employment"), tax breaks, tariffs, and regulations. There is no doubt that a lot of that manuf could be moved to much cheaper countries, which would enrich a few, at the expense of many.

Re: The US is building factories at a fast rate

#190

Post by simonsarris »

jjk166 wrote: post #153

Manufacturing employment is roughly at the same place now that it was in 2020, and still substantially lower than where it would have been had the pre-pandemic trend continued, and even that was nowhere near returning the US to pre-2008 levels. https://fred.stlouisfed.org/series/MANEMP Construction spending is a terrible proxy for manufacturing - both because the size of a building you need isn't pegged to the value…

But also looking at FRED data we see that manufacturing sector productivity has doubled since ~1990, so it's not clear that headcount is the best proxy either. And if we look at industrial production or sector output we're still near (plateauing) all time highs

https://fred.stlouisfed.org/series/IPMAN

https://fred.stlouisfed.org/series/OUTMS

But not everything is a plateau. Fabricated metal reached an all time high post covid: https://fred.stlouisfed.org/series/A32SNO

Same with semis: https://fred.stlouisfed.org/series/IPG3344S

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