Maybe Domestic Manufacturing Should Come Back
With few exceptions, the mental state of American teenagers dominated political discourse last week. A recent report shared the ominous statistic that nearly 60% of teenage girls experienced multiple symptoms of depression, while nearly half that number made a suicide plan. The debate soon flared as to the political meaning of these statistics. Some liberals and most conservatives blamed social media, with conservatives using the data to support a proposed ban on social media for kids under the age of 16. Others on the left argued that despair about climate change, public health, and income inequality were more important reasons for teenage depression.
These debates simply add this cohort to the large group of older Americans who are also depressed. It seems as though feelings of hopelessness and inadequacy are dominant in America in this decade. It was not Donald Trump, the height of the pandemic, or the prevalence of low wages that were the true obstacles of American happiness. All of these factors, combined with the opioid epidemic and rampant loneliness and dissatisfaction, have all combined to cause thousands of deaths of despair over the past decade. It seems as though Americans are as sad as they have ever been, and the problem does not seem to be getting any better.
But there may be a silver lining in another parallel news story that has been discussed heavily in recent years. Joe Biden and Congress have taken several steps to ensure the return of domestic manufacturing. After years of promise, the return of factory jobs has the potential to marginally improve the economic and social circumstances of millions of Americans.
The services/manufacturing debate is one that it seemed as though economists had won in the past decade or so. Neoliberals had argued for decades that the hollowing out of American cities from deindustrialization was not a clear evil. They argued that manufacturing jobs were leaving, yes, but they were being replaced by safer service and technology jobs. These new jobs would lead to fewer workplace-related lung and repetitive stress injuries. More and more of America would resemble tech hubs like Silicon Valley or the Research Triangle Park, places where entry-level jobs paid six figures and new services and opportunities were everywhere. Manufacturing could be performed in countries that had a comparative advantage with cheap labor and low transportation costs.
But manufacturing has a number of benefits outside of these tabulations. Factories are more amenable to union growth than service or tech jobs. The factory is a site where workers have discovered tactics and strategies to force owners to listen to their demands. Manufacturing jobs often pay higher wages than service jobs and are less vulnerable to cheaper remote employees. Jobs can often be secured with a short certification process or no degree at all. On-the-job training is more prevalent than with many service jobs, which are often seen as interchangeable and require intimidating levels of experience for well-paid positions.
Domestic manufacturing is also safer than it has ever been. The prevalence of personal protective equipment is at a higher level than earlier periods. The Occupational Safety and Health Administration (OSHA) has helped to drastically reduce the number of injuries that workers face on the job. All of these factors are intensified in the newest industries supported by the semiconductor manufacturing act. These high-tech firms must be kept clean and have relatively few moving parts compared to factories of the past. The chances of injury are much lower than the classic automobile or textile factory.
More importantly, domestic manufacturing may be able to start a reversal in the feelings of disappointment and malaise than are so common today. As Reg Theriault noted in his famed 1995 book on work, How To Tell When You’re Tired, the manufacturing and docking industries were not as soul-crushing as many outside observers assumed. Workers became close friends. They socialized with each other all day long. They strategized and came up with ideas both for greater efficiency and for maximizing their free time. As Theriault writes, factory workers benefit immensely from the ability to slow down their productivity, a possibility lacking in stressful service, independent contractor, and tech jobs:
Taking it easy on the job while someone else covers your work, or working on and off… is an established part of work. It takes some kind of real mental case to do all the work he can all day long. No one expects it. Certainly not management. Managers might want it, but they do not expect it, and workers do not disappoint them.
It is difficult to quantify American happiness at any time, let alone in decades prior to widespread scientific surveys. But the height of unionized American manufacturing was the height of socialization and productive social activity highlighted in Robert Putnam’s Bowling Alone. It was a time when tens of millions of Americans had productive friendships, played cards, joined local organizations, and worked with political groups. Unions were just one of many social groups that helped further this process. Outside of the union hall, countless Americans played cards or went to rallies with friends they made at work on assembly lines.
Ever since deindustrialization, politicians and social leaders have believed that they could graft the positive effects of the factory onto other economic and social groups. But it is possible that they were wrong. Americans might need to go back to earlier employment situations in order to find the boost that their social lives need. The new semiconductor factory may not solve America’s depression problem. But it might help more than a ban of TikTok.
Unless your suggesting the government highly subsidize low productivity manufacturing, then domestic manufacturing is people with advanced degrees running robots, not high school grads getting jobs at Ford.
Maybe instead of that, you should unionize the service industry so that job is as good as an old factory job.Report
Who’s going to pay 50 dollars for a Starbuck’s coffee after you do that?Report
given how many Starbucks have successfully unionized, please show us the representative price increases . . .Report
Apply the same logic to manufacturing, why should a washing machine cost 20,000 in direct and indirect costs because people fetishize the factory floor experience.Report
I was simply taking your comment “Maybe instead of that, you should unionize the service industry so that job is as good as an old factory job” and running with it. What’s a reasonable union wage? 25/HR This gets you @ 52K a year. That’s a decent factory wage, and it’s in line with what BMW is paying production workers in Greenville SC. That wage is NOT sufficient to support yourself in a lot of areas….Northern Virginia, much of Cali, etc. So, while it may not be 50 dollars for a cup of coffee, it damn well may be more like 2 or 3 x the current cost, or even more.
Indeed has Baristas making 7 to 22 dollars per hour in DC. If everyone was moved up to 25 dollars per hour, the marginal costs would be significant. How’s a company to offset that cost increase? Higher productivity, lower non labor costs? Not sure that’s gonna happen without a price increase.Report
There’s a unionized Starbucks right in my neighborhood. I could walk there from my house if I were of a mind to drink Starbucks (as opposed to the superior product available at a closer, local coffeehouse). Coffee there costs no more than at a non-unionized Starbucks elsewhere in the city.
There are also a few fast food places that have unionized here as well, particularly a local chain called Burgerville. Not every Burgerville location is unionized but the two closest to my home are.
The only difference I’ve noticed at these unionized coffee and fast food places is that I am presented with an opportunity to leave a tip for the staff when I pay electronically. Upon inquiry, I find that the tips are pooled. I’ve noticed no differences whatsoever in the prices of the products or the quality of the service.Report
Manufacturing jobs overall appear to have peaked in the US about 1978, and then fallen, though they were already coming back beginning in 2010 (https://www.bls.gov/opub/btn/volume-9/forty-years-of-falling-manufacturing-employment.htm).While a good many liberals like to blame the free trade agreements, the US-Canada Free Trade Agreement (which became NAFTA) wasn’t signed until 1988. Some of the subtrends are fascinating, but it’s unlikely that old school large item manufacturing will ever come back to the US.Report
Gotta go with Brent on this. Onshoring manufacturing may create some jobs but they’ll be overwhelmingly high tech, high skill jobs and modest in numbers. I suppose there’ll be some loaders, movers and forklift drivers too (but don’t knock the latter, forklift driving is a high skill job) but there’ll be nothing like the leijons of manufacturing employees that Eric is happily imagining.
We did, do and will manufacture a lot of stuff- but we don’t use a lot of people to do it anymore.Report
I think this is true but also that there is a strong case for exercising way more discretion in which points of origin we accept. One of our biggest assets as a country is a big rich consumer market and we shouldn’t sell access to it short. For better or worse (mostly worse) it’s also become clear that the cheapest sources of manufacturing aren’t necessarily the best if they serve to empower adversarial countries like China. There are times where it really is worth paying a little extra if it helps friendly countries, or even just small countries that pose no real threat no matter how rich they get.Report
I am 110% on board with “friendshoring”; I’m not at all a free trade absolutist. Trade, particularly with a market like ours, should be used at least partially as an instrument of foreign policy.Report
Any domestic programs to bring manufacturing back to the state should be focused on critical components needed for our industries and those that support the military and near military areas. Given the restrictions on sourcing many parts from China, due to security concerns, I’ve seen it become much harder to source stuff during covid/post covid because there are fewer and fewer “safe” alternatives than China.Report
This is indeed true, and likely the driver for the CHIPS Act.Report
There is no evidence that bringing back manufacturing jobs would reverse the feelings that lead to the rise of Trumpism, more driven by hatred of social change.Report
Also True.Report
I think Keynes was right that for high-income countries, at least larger ones, the benefits of free trade become rather insignificant in most cases and begin to give way to the advantages of “bringing the product and the consumer within the ambit of the same national, economic, and financial organization.”
“I sympathize…with those who would minimize, rather than with those who maximize, economic entanglement among nations. Ideas, knowledge, science, hospitality, travel – these are the things which should of their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible, and above all, let finance be primarily national.” (Keynes, “National Self-Sufficiency”)Report
This is where I bang the drum about automation and AI.
Manufacturing isn’t going to ever again require vast armies of worker bees. The only place where the massive factories employing tens of thousands of people are in places where humans are so cheap and disposable that they are literally cheaper than machines.
Even now most machine shops use software and CCM to craft machine parts, and the human components range from low skill to high, but very few.
It just doesn’t take very many humans to produce a prodigious amount of stuff and never will.Report
Energy costs are going up. Demographics are going down, way down. Fewer young people, more retirees, especially in China. Russia is getting kicked out of the global networks, China might manage to do the same.
We will probably see a return of domestic manufacturing to some degree.Report
My own opinion is that the fundamental question is, “Can the working population produce the goods and services the overall population wants (in a realistic sense) to consume?” Automation can lift a lot of the burden for things. Increasing skillful software helps on the services end. Hardest parts would seem to be hands-on services like staff at nursing and dementia facilities.Report
Yes. However after that we might be looking at a 1950’s style boom because North America’s demographics are that much better than everyone else. The American Market is going to be a big deal.
Russia going full genocidal expansionistic no-rules empire has deeper implications to various systems than that.
You can’t let yourself be addicted to their oil because they might turn it off to make you freeze. You can’t have your people in the country because they might be forced at gunpoint to die on the front line. You can’t have your assets in their country because they will be stolen. You can’t trade with them because any economic benefits they might get will be used to commit war atrocities.
We’ve lost a gas station and the source of a good amount of the world’s minerals that we would have used for the green revolution.Report
Particularly given that modern robotics means that any American manufacturing renaissance will probably not bring massive numbers of jobs along with it (and thus not provide a substantial amount of the psychological benefits spoken of in the OP), it bears a moment’s thought as to why we would want more manufacturing here.
There will be some jobs, of course.
It would boost our GDP.
It would cultivate industrial infrastructure.
It could help our import-export ratio.
It would allow us more control over how the goods are made (specifically thinking about environmental concerns here).
It could be a point of national pride.
All of these things may well be worth it and important. Certainly they all sound good. My point here is that it is important to not see growth in our manufacturing sector as an inherent good, but rather as a means to some other end. It helps us have an intelligent discussion and make intelligent decisions in pursuit of this goal if we understand the benefit we seek.Report
Make supply chains less subject to disruption, be it from Covid, Evil Dictatorships, Pirates, transportation, or whatever.
Risk is a thing as those who were expecting Russia to play nice (Germany) have found out.Report
This is probably the best argument for returning some types of manufacturing to the US.Report
Thank you… and while we’re talking about risk, I expect China is going to make some “crash and burn” decision. Their population is aging crazy rapidly because they already did. They seem to have gone “all power in one person’s hands” like Russia did.
By itself that is a problem because he’s caught in the dictator trap of not hearing anything he dislikes. He’ll drop the ball, hard, and break stuff.Report
I can dig it.Report