Manufacturing: The Importance of Accuracy

Jake Blumgart doesn’t like my posts on manufacturing, and comments:

1. What do we generally make these days? A lot more crap than we used to. Which is one of the reasons you see countries like Germany, which held on to its high-end industrial base, doing a brisk export trade with the developing world, particularly China(and having lower unemployment and a bit of an easier recession than us). Which is part of the reason why they have a trade surplus and we have a trade deficit in the hundreds of billions. Both international and national markets are less and less interested in our industrial output.

2. How many of manufacturing jobs are there these days? This is the obvious point, and a lot of people tend to shrug it off. ‘The economy is changing, and some one has to get burned in the process.’ A lot of people also said these manufacturing jobs would be replaced by comparable new jobs–which has turned out to be manifestly false. Thus, a bunch of people who could have been in the middle-class have been reduced to flipping burgers or serving as a security guard for $10 an hour, no benefits. To make matters worse, America’s social safety net is pretty shitty, and a lot of them have fallen right though.

3. How much do the remaining manufacturing jobs pay? Not as much as they used to.

Several responses to this. I think point one is simply mistake. The industrial output figures I like to highlight measure value of goods produced, not raw quantity, so it’s not like we’re just churning out garbage.

As to the rest, there are many valid concerns here, but people with valid manufacturing-related concerns need to raise those concerns and not other different concerns. I keep highlighting the fact that manufacturing output is increasing, rather than decreasing, because the discussion of the subject is dominated by words and images that imply the reverse. But the phenomena we’re actually experiencing, and the hypothetical phenomenon of a long-term trend toward declining industrial output, would be two very different things.

Think about two different problems a logging town might have. One problem is the forest gets ruined by blight—no more lumber, no more jobs. Another problem is that labor-intensive two-man saws might be replaced by more efficient saws—more lumber, but fewer jobs. These are both problems for the town, but they’re different situations and they require different policy responses and it’s important to understand what problem you’re having.