891–900 of 1001 posts
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Cost of labor is the issue: china is enslaving people to work.
Doesn't that feel like a massive overstatement? They have worse working conditions for sure. "Enslavement" is absurd if we are speaking about the macro level.
We never stopped manufacturing, we just stopped employing people. > We don’t have the infrastructure to manufacture That's trivially false given we're the second-largest manufacturer in the world. We just don't want to employ people, hence why we can't make an iphone or refine raw materials. The actual issue is that our business culture is antithetical to a healthy society. The idea of employing Americans is anti-bus…
I have worked US manufacturing and manufacturing R&D for most of my career: pharmaceutical, microelectronics, materials, aerospace, etc. The US is awesome at manufacturing when we want to be.
One problem is that "modern MBA/business philosophy" views manufacturing and manufacturing employees as a cost center and there is so much emphasis on maximizing gross margin to increase shareholder value.
So business leaders scrutinize the hell out of anything that increases the cost of their cost centers:
- employee training & development? hell with that.
- Increasing pay to retain good employees in manufacturing? Why? isn't everything mostly automated?
- manufacturing technology development? Not unless you can show a clear and massive net present value on the investment... and, then, the answer is still no for no good reason. I have pitched internal manufacturing development investments where we conservatively estimated ~50% internal rate of return and the projects still didn't get funded.
There is also a belief that outsourcing is easy and business people are often horrible at predicting and assessing the total cost of outsourcing. I have been on teams doing "insource vs. outsource" trade studies and the amount of costs and risks that MBA decision makers don't think about in these situations really surprised me initially... but now I'm use to it.
Anyhow... the US (and Europe for that matter) can absolutely increase manufacturing. It is not "difficult"... but it would be a slow process. I think it is important to differentiate between difficulty and speed.
We never stopped manufacturing, we just stopped employing people. > We don’t have the infrastructure to manufacture That's trivially false given we're the second-largest manufacturer in the world. We just don't want to employ people, hence why we can't make an iphone or refine raw materials. The actual issue is that our business culture is antithetical to a healthy society. The idea of employing Americans is anti-bus…
I'm American and heavily involved in manufacturing for industrial/mining/agricultural customers. 'We just don't want to employ people' is a gross simplification. We do want to employ people, and lack of skilled labor is a serious problem which has hampered business growth for years, The first unspoken problem is that very few young people want to live where many factories are located. I can't blame them. I certainly…
I'm not part of the target population but my guess is that a large factor has to do with people's tendency to go down the path of life that is most similar to the path they've already tread. If you grew up in a 'cultural center' it's less of a paradigm shift to take the crappy job around the corner rather than move somewhere slightly more remote to start a new career even if in the long run it could actually lead to a more decent life.
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> We ran this experiment for decades. It turns out that Americans are not willing to pay the higher prices, which led to our manufacturing consolidating around higher-value items. But did we run that experiment while foreign alternatives were nearly or equally expensive? That's the real test, and whether foolish or not that's what they are trying to do with tariffs. > Lower-productivity jobs mean less income for work…
> > Our poorest states have higher GDPs per capita than many "rich" western EU countries. Not the OP, but poor as used here seems to refer to average quality of life , quality of infrastructure, etc. > Is the result of that a higher median income, or is it a reflection of a higher wealth inequality? Higher wealth inequality leading to stretched public services and infrastructure, which lead to lower quality of life ,…
Healthcare, childcare, education, retirement are all big expensive things the US does incredibly poorly.
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> Business culture is eating its own young it's not eating its own young. It's externalizing the costs. And it's understandable, because the cost of employees are perhaps the largest line item in the budget.
Perhaps it's more accurate to say capitalist culture is eating its own young, due to its fixation on business culture. And I'm saying that as basically a capitalist. Not sure where we go from here.
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When I was studying economics, my macro professor used to belabor the point that post-WW2 US socioeconomics was a highly unique (and special) time-and-place; and, it is a mistake to generalize economic theory from that time-and-place. So... here goes: rather than proclaiming a "housing crisis", maybe we're seeing the end of an exceptional period of "housing affordability". (A similar analysis of Europe and Asia appli…
Maybe if we stopped viewing housing as an investment vehicle, with the expectation that house prices are going to rise forever then you would see affordable housing. https://www.cbsnews.com/news/how-much-will-home-equity-level... The last time that I know of housing losing values was 2008 before that, it was 1991
I think this problem is much, much, much harder than most people think. Almost every single society — except for Japan, AFAICT — is getting hit by this issue, but each in their own, novel way, that covers every possible "obvious" solution.
The VAST majority of what is wrong with our society (political and obviously economic) can be traced to this. It's the expectation that every economic endeavor must show a return on investment - forever. That every entity must strive to optimize the bottom line every day of its existence. Optimizing for growth above all else crushes and consumes everything.
Increasing local manufacturing will only create more opportunities for people to be indentured to a company that literally hates their existence.
A company is forced to build here in the U.S. and people are supposed to rejoice they now have another option for their lives to simply be tolerated and disposable?
We never stopped manufacturing, we just stopped employing people. > We don’t have the infrastructure to manufacture That's trivially false given we're the second-largest manufacturer in the world. We just don't want to employ people, hence why we can't make an iphone or refine raw materials. The actual issue is that our business culture is antithetical to a healthy society. The idea of employing Americans is anti-bus…
100% agree with you! I have worked US manufacturing and manufacturing R&D for most of my career: pharmaceutical, microelectronics, materials, aerospace, etc. The US is awesome at manufacturing when we want to be. One problem is that "modern MBA/business philosophy" views manufacturing and manufacturing employees as a cost center and there is so much emphasis on maximizing gross margin to increase shareholder value. S…
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To get employers to invest in employees, they'd need more of a stake in it. Right now if you invest $200,000 to train someone, they can immediately quit and go work somewhere else and you're out $200k, so they don't do that. A way to fix that would be to e.g. issue student loans for the training and then forgive them over time if the employee continues working there. But that's rather disfavored by the tax code when…
> you would have people screaming about "abusive" companies sticking you with $200k in debt if you quit right after they give you $200k worth of training. Because it would be very easy to abuse. It would be oh-so-easy to give an employee training worth $200k - in the company's estimate - and then force them to stick around for years. "But nobody made them agree to that!" Sure, and nobody makes anyone take on a bad lo…
And to amplify your point just a bit, if the alternative is losing your healthcare and possibly going homeless, what does "agreeing" even mean anymore?