Nafta

[youbet]

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Originally Posted by clifp The reality that Democratic politicians (and protectionist folks like Buchannan) don't talk about is that high paying blue collar manufacturing didn't get outsourced to Mexico, or India, or China. For the most part these jobs simply disappeared. They are gone and are never coming back.

Well...... I supposed we'd have to get some numbers and see. As I said in earlier posts, there were fewer jobs outsourced than some folks like to think. But you're dead wrong in saying the number is zero. 400,000 people qualified for govt programs for extended unemployment compensation and training when it was substantiated that their facility was moved offshore. And I do know I spent my final working years moving the factory I managed here to China, hiring/training a Chinese crew and laying off the employees here. These were good jobs.

[HFWR]

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Originally Posted by youbet Well...... I supposed we'd have to get some numbers and see. As I said in earlier posts, there were fewer jobs outsourced than some folks like to think. But you're dead wrong in saying the number is zero. 400,000 people qualified for govt programs for extended unemployment compensation and training when it was substantiated that their facility was moved offshore. And I do know I spent my final working years moving the factory I managed here to China, hiring/training a Chinese crew and laying off the employees here. These were good jobs.

Since our department was r&d, we weren't eligible for the extended UEB. We didn't "make" anything...

[clifp]

I didn't say zero jobs were lost to outsource, I said most manufacturing jobs seemly disappeared due to productivity.

Here some of the top google stories...

From the possibly biased national association of manufacturers
Where are the manufacturing jobs going?

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Where are the manufacturing jobs going? Since mid-2000, U.S. manufacturing employment has fallen by 3 million. Half of that decline took place during the 2001 recession and the other half has taken place during the 4-year old recovery. Today, U.S. manufacturing output is at an all-time high, yet factory employment is at its lowest level in more than 50 years. What gives? Some claim that jobs are going overseas. So where are manufacturing jobs growing? China, might be a knee jerk reaction. But it would be wrong. Since mid-2000, manufacturing employment in mainland China has fallen by 11%. Then what about our NAFTA partners? Nope. Both Mexican and Canadian factory employment have fallen since 2000, as has manufacturing employment in Japan, Germany , the UK, France, South Korea, the Netherlands, Sweden, Australia, Belgium, Indonesia, Ireland, and Poland. In fact, of the top 28 manufacturing countries in the world (which account for 90 percent of global manufacturing output), just 5 have seen increases in manufacturing employment over the last 5 years: Argentina, Brazil, Spain, Thailand, and Turkey. The fact is that a downturn in manufacturing employment has been a global phenomena over the past half decade. In the case of the U.S., half of the job losses can be attributable to an acceleration in productivity growth, which during the current recovery is growing 72 percent faster than productivity growth during the prior 4 manufacuturing upturns. The other half of the job loss is due the fact that the current recovery has not been as robust as previous ones. This was especially true in 2002 and 2003, when manufacturing output averaged under 2% growth and when over 90% of the post recession job losses in manuacturing took place.

From the pretty reliable Conference Board . China Losing More Manufacturing Jobs Than U.S. But Adding Service Jobs at a Rapid Pace

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China is losing more manufacturing jobs than the United States. For the entire economy between 1995 and 2002, China lost 15 million manufacturing jobs, compared with 2 million in the U.S., The Conference Board reports in a study released today. “As its manufacturing productivity accelerates, China is losing jobs in manufacturing – many more than the United States is – and gaining them in services, a pattern that has been playing out in the developed world for many years,” concludes The Conference Board study. ... China is rapidly losing manufacturing jobs in the same industries where the U.S. and other major countries have seen jobs disappear, such as textiles. Matthew Spiegelman, Economist at The Conference Board and co-author of the study, notes: “The U.S. lost 202,000 textile jobs between 1995 and 2002, a tremendous decline by any measure. But China lost far more jobs in this sector –1.8 million. All told, 26 of China’s 38 major industries registered job losses between 1995 and 2002.” The study points out that while developed countries’ jobs are being offshored to China, exports are only one piece of China’s industrial expansion.

The point being that even if the US was the only country in the world; high paying blue collar manufacturer jobs would have dropped significantly over the last N years. They would have been replaced by capital: including robots, computers and other machines.

Now I suppose we could all become like Sarah Connor and destroyed the machines before they become self aware and wipe us out... But compared to manufacturing jobs being replaced with R2D2, outsourcing is small effect.

In my former industry, semiconductors manufacturing the productivity of a factory workers has improved from when I started in 81 to now, between a few thousand to a few million times, depending if you count chips or transistors. Factories that use to employ many thousands of blue collar workers now employ a few hundred and produce tons more chips.

[chinaco]

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Originally Posted by clifp I didn't say zero jobs were lost to outsource, I said most manufacturing jobs seemly disappeared due to productivity.

Productivity translated is lower wages. Money is the the measure of productivity in this case.

It is a form a wage arbitrage. It will eventually normalize (differential reduces) when China and India's wages increase. But that will probably take 30 or 40 years.

People cannot be efficient enough to overcome the cost difference of wages that are 15-25% of a US wage. Now that companies have figured out how to move manufacturing offshore (and the risk seems low), I would expect it to accelerate. All manufacturing will not leave, but it will be a shadow of its former self.

Unfortunately, the next stop seems to be back-office white collar jobs. IT, Accounting, HR, etc. Hopefully the outsourcing will be domestic.

[youbet]

Quote:

Originally Posted by clifp I didn't say zero jobs were lost to outsource,

Well, you're right. I guess you didn't say "zero jobs were lost to outsource." You said "The reality that Democratic politicians (and protectionist folks like Buchannan) don't talk about is that high paying blue collar manufacturing didn't get outsourced to Mexico, or India, or China."

So, my bad.

For others though, the fact is that some jobs were outsourced. In areas where the impact was concentrated, like Ohio, politicians like Hillary and Barack have been playing to that issue to win votes.

Hillary's handlers did magnificant work. Despite Bill being a big advocate of NAFTA, they made it appear as though Hillary was sympathetic to their plight and won them over...... or prevented them from moving away and over to Barack.

[youbet]

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Originally Posted by chinaco Unfortunately, the next stop seems to be back-office white collar jobs. IT, Accounting, HR, etc. Hopefully the outsourcing will be domestic.

That's what the efficient allocation of labor and capital is all about I guess. You certainly can't argue against it on the basis of competitive advantage. If some code writer in India, or wherever, can be 50% as productive as their competition in the USA but is willing to work for 25% of the wages/benefits, then that is where the work should go.

Both Dem candidates include a bit of protectionism in their platforms. So, we'll see what happens after the Dem convention and the general election.