Friday, April 13, 2018

Confusion About Overseas Manufacturing Jobs

I see there is some confusion in the comments at the post, Think Twice About Bringing Back U.S. Manufacturing Jobs.

Comments include:
I work in manufacturing too. While I agree with AJO that what Robert says is true, it doesn't have to be and where I work we are proving that. We automate the mind numbing and labor intensive tasks because we value people's minds instead of their backs.
A decision to automate has nothing to do with "valuing a people's minds instead of their backs." It is simply a cost-benefit analysis. If it costs more to automate than to use labor, labor will be used and vice versa.

Another commenter adds:
The flaw in the analysis is assuming that all the positions in manufacturing are manual labor. They are not. From manufacturing engineering to accounting to sales there are countless roles that are not physical labor jobs. Then there are those that aren't terribly physically demanding like machinists. There are numerous men over 65 still working in manufacturing in various roles.

Furthermore modern factories in general do not take the physical toll they once did in developed nations. A great deal of effort is made such that it doesn't.
This fails to understand that if a manufacturing job is not physically taxing, it is not likely to leave the United States. However, physically taxing manufacturing jobs do leave the US, where the workers have a comparative advantage in performing such "mind numbing" tasks. These are the tasks that Robert Higgs was discussing.

-Robert Wenzel  


  1. It fails to understand no such thing. That the jobs can and have become less physically demanding is a point being made. What was physically tasking in the past, Higg's well dated experience, is often no longer so. Capital equipment, ergonomic advancements, and so forth. Recent case in point, have you seen Ford's exoskeleton? Modern factories operated by global corporations in places like China and Mexico implement nearly all the same equipment and methods.

    Furthermore it is a false notion that only the physically tasking and mind numbing jobs get relocated. There is a necessity and desirability of proximity. Which means if you move a factory for that reasoning many of the other positions go with it. You don't need a tool and die department in the USA if you're manufacturing in China. You don't need manufacturing engineers in the USA if you're manufacturing in China. Eventually this continues to spill over into product development and various business functions. Maybe even economists.

    I feel like Thornton Mellon here.

  2. Automation is further evidence the US needs a zero immigration policy. Especially from turd world countries with the low IQ trash most of you who call me 'da rasis' just love. Hopefully we can kick out all the illegal ones followed by a lot of legal ones. Win win for real Americans.

  3. I am in complete agreement with Jimmy, it is nice to see there is at least one person on earth that agrees with me on this subject. Thanks to people like Robert Wenzel, Bob Murphy, Tom Woods, Robert Higgs, Lew Rockwell, and may others I am a Austro-Rothbardian. I am also a top level manager at a small manufacturer (on the upper bounds of the "small" definition). In my role I play a significant part in the decision making of the company so I can make these statements with certainty.

    In a perfect economic model, yes, the decision to automate is simply a cost-benefit analysis. In the real world the decision is made because we cannot find enough workers and the workers we do find need to focus on doing the tasks that we cannot or do not want to automate.

    I would love to live in a world where governments did not disincentivize people to work (or better yet, where there was no governments), where my fellow manufacturers made their work environments attractive to workers, and where people cared to actually listen to those of us that are telling the truth that manufacturing is not what it used to be, at least for some of us, and has the potential to be that way for all of us. Since I don't see that changing anytime soon we are forced to automate.

    Now that we have seen the benefits of automation I feel that my company would still automate even if more workers were available and minimum wage laws were abolished. It isn't a simple cost-benefit analysis. Look at Tom Wood's example of his father driving a forklift or the spoons-versus-shovels analogy (I know that is usually credited to Friedman, whom I don't always agree with, but this analogy is spot on). Why should we have to do something inefficiently because the simple cost-benefit analysis says that I can do it more cheaply with people versus robots? I would rather do more with robots and people together, which is still a cost analysis, but in my opinion, a far more complex one, or at least one most people fail to recognize.

    My original point (in my first post) was that if people wanted to automate we could manufacture even more than the (record) amount we are outputting now, giving more people jobs, and that the jobs would be well-paying enjoyable jobs. Unfortunately many of my fellow manufacturers, the dis-education/indoctrination system, and the general public fail to see this. Automation is not taking our jobs, it is allowing us to do more things that we want to do and less of what we do not. I, and others like me, are not making automation decisions for the reasons that Robert tells us that we are. Robert, please don't tell me why I make the decisions I make. Thanks to people like you I feel I have a better grasp on what is going on in the world than I once did and can make hear-and-now (real world) decisions based on Austro-economic theory.