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Pundits will debate the wellsprings of Donald Trump's election triumph for years. Right now, cultural explanations are in the lead. Multiple researchers and journalists are stressing the role of "racial resentments" and xenophobia as the deepest sources of Trump's appeal. And such explanations cannot be dismissed.
But the decades-long decline of U.S. manufacturing employment and the highly automated nature of the sector's recent revitalization should also be high on the list of explanations. The former is an unmistakable source of the working class rage that helped get Trump elected. The latter is the main reason Trump won't be able to "make America great again" by bringing back production jobs.
The Rust Belt epicenter of the Trump electoral map says a lot about its emotional origins, but so do the facts of employment and productivity in U.S. manufacturing industries. The collapse of labor-intensive commodity manufacturing in recent decades and the expansion in this decade of super-productive advanced manufacturing have left millions of working-class white people feeling abandoned, irrelevant, and angry.
To see this, one has only to look at the stark trend lines of the production data, which show a massive 30-year decline of employment beginning in 1980. That trend led to the liquidation of more than a third of U.S. manufacturing positions. Employment in the sector plunged from 18.9 million jobs to 12.2 million.
[...] In fact, the total inflation-adjusted output of the U.S. manufacturing sector is now higher than it has ever been. That's true even as the sector's employment is growing only slowly, and remains near the lowest it's been. These diverging lines—which reflect the sector's improved productivity—highlight a huge problem with Trump's promises to help workers by reshoring millions of manufacturing jobs. America is already producing a lot. And in any event, the return of more manufacturing won't bring back many jobs because the labor is increasingly being done by robots.
(Score: 5, Interesting) by Unixnut on Monday November 21 2016, @11:44AM
This of course, would have nothing to do with the massive deregulation of the banking industry in the early 80s, allowing for massive cheap credit to inflate assets beyond the average mans ability to pay, the accumulation of capital by those who had the easiest/first access to credit. Right?
One asset bubble that exploded was the stock markets, and everyone and their kid wanted to be a red-braced stockbroker. Easy money in the financial markets was the ticket, nobody wanted to do an honest days work for little money (relatively). Also this new found liquidity (coupled with the USD being the worlds reserve currency) and the push towards "globalization" resulted in it being cheaper to ship stuff from Asia in exchange for dollars than it was to build it local.
It was not a natural decline in employment. It was a coup by the financial and banking sector, who then proceeded to dismantle and asset strip everything they could. Long term investment was out, quarterly pumping of stock via cheap loans, squeezing employees and stripping/selling off assets (switching to outsourced Asian production) was in.
I am frankly surprised it took 30 years for the masses to get annoyed enough to actually snap and do something unexpected at the ballot box. I guess eventually even Turkeys realise they are just being primed for the slaughter.
Can Trump reverse this? I am not sure. Even if he sets the regulations and laws in motion to bring back manufacturing, I suspect it will take another 30 years for it to recover to a point that the average Joe can consider the "American Dream" applies to him. Trump does not have 30 years, and I am not sure some people will want to wait that long. That is essentially for the next generation.
It is a bit like binging on a credit card for 30 years, and now the bill is due. You can either sacrifice like mad for the next 30 years, or halve your quality of life for 60 years.
There is no easy way out (short of default, give the world the middle finger, and threaten them with Nuclear annihilation if they dare complain or attempt to dump the USD as a reserve currency)
(Score: 1, Flamebait) by Runaway1956 on Monday November 21 2016, @12:33PM
Those bubbles you refer to probably contributed to the increasing loss of jobs. But, I blame the unions.
The steel industry was first. Corporations were actually showing zero profits, and even losses, mostly due to insane pension schemes. The future wasn't looking real good for them. Initially, the corporations attempted to bargain with the unions, seemingly in good faith. The word was, "If you'll take a 2% cut in benefits, we can get on an even keel, and things will be rosy for us for the next 30 years."
Now, you know me - I'm a cynical old bastard, and I don't believe anyone's word at face value. But, facts are facts - US Steel, B&W, Bethlehem, and dozens of others were showing smaller profits. Something needed to change.
The unions refused to bargain in good faith. The man in the street believed that no one in the world could make steel like Americans could make steel, and that no jobs would be lost. They kept believing that until plants were shut down, disassembled, and shipped overseas. Even then, the union people insisted that those plants would only make scrap metal because those foreigners didn't understand steel.
Today - those plants are still operating in Belgium, India, and other places. They aren't coming back. Even if I were stupid enough to believe that Indians are dumb in comparison to Americans - making steel isn't THAT fuckign complicated. You don't need to staff the plant with geniuses to produce good steel. A couple metallurgists, a couple engineers, and a mathematician are all the real brains required in a moderately sized steel plant. Everyone else can have IQ's under 100, and it won't affect the finished product at all.
Of course, that leads to the question - why can't China produce good steel? WTF went wrong there?
(Score: 0) by Anonymous Coward on Monday November 21 2016, @12:57PM
(Of course, that leads to the question - why can't China produce good steel? WTF went wrong there?
They hired Indian engineers.
(Score: 1, Troll) by Runaway1956 on Monday November 21 2016, @01:50PM
They hired Indian engineers who were actually Pakis in disguise.
FTFY
(Score: 0) by Anonymous Coward on Monday November 21 2016, @02:07PM
At least they weren't Guatemalans.
(Score: 2) by LoRdTAW on Monday November 21 2016, @02:24PM
More than likely, China was never really in a position to make good steel. Like you said, you need a good staff of metallurgists, possibly chemists, engineers, some decent people in quality control, and a facilities staff to keep the machines running. The rest of the people are just peons. The US and others had plenty of time, over 100 years to build a steel ecosystem. China had to learn to make steel the hard way. Their ludicrous speed like growth of their manufacturing market saw demand skyrocket. Chinese steel makers could barely keep up with demand. Remember the scrap steel boom of about 8-10 years ago when it was fetching $200-$250 a ton at scrap yards instead of the usual $40-$50?. It was all going to China. Hundreds of thousands of tons, if not millions. I'm sure Chinese steel makers at some point said "fuck it if it holds together after forming, it passes." Besides, in the beginning of China's export boom, quality was absolute trash. People didn't mind so much as long as they could buy something that normally costs $100 for $10-20. I mean, if people are willing to buy a $20 cordless drill which breaks after a few uses and just buy a new one, then why improve?
So in the end it was a lack of knowledge which hampered production which in turn lowered quality BUT it turns out it was just good enough to meet demand. So there was/is no real reason to improve quality as people are still buying.
(Score: 1, Interesting) by Anonymous Coward on Monday November 21 2016, @05:03PM
You are echoing the 1%'s propaganda. The pensions matched typical private-sector pensions for big co's at the time. Company pensions got cheaper over time. And union negotiations involve both sides. Why you blame JUST the union if the agreement is poor?
A better solution would be to get unions in China also, rather than kill unions and have a race to the bottom whereby the rich get richer and the rest get screwed. The middle class was strongest when unions were strongest.
(Score: 2) by HiThere on Monday November 21 2016, @07:57PM
ALL monopolies are bad. Monopolies of labor as well as industrial monopolies as well as utility monopolies as well as transportation monopolies. Every single one is terrible.
Now tell me how a person in no position of power is supposed to arrange to get a decent wage? Companies are relatively few, and will agree to not pay more than they have to. Companies will even hold people prisoner and pay them in fake money (company script) to coerce them into only buying the goods that they choose to offer at the prices that they choose to offer.
So unions are terrible, but they *help* to rebalance a grossly uneven scale. I'd prefer some better solution, like universal basic income (which would also get rid of the need for minimum wage), but that isn't available. So what's a better option?
Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.
(Score: 2) by Runaway1956 on Monday November 21 2016, @08:12PM
*cough* "Company pensions got cheaper over time."
In which reality did you find this little tidbit? Here on the earth that I live on, the pensions were set up very much like a pyramid scheme. Not unlike Social Security. Everyone pays a little, for 20 to 40 years, then everyone takes a lot. All those little bits never added up to the jackpot that was promised to everyone. The medical benefits that accompanied pensions were just as bad. Retirees were promised the sky, but there was no way any corporation would ever be able to pay off on the promises. Maybe, just maybe, the largest corporations - except those are bought and sold, and the union contracts are dropped with the sale.
Of course, all that was wrong with the contracts didn't really matter, because so many of the pension funds were frittered away on bogus investments. The most stable pension fund in the US (for working people) was the rail road pension. That pension still works - primarily because the railroads have laid off 80% or more of it's workforce. Those individuals who were disabled while working for the railroads are as secure as government retirees!
Pyramid schemes look attractive, but they never work.
(Score: 4, Interesting) by RS3 on Monday November 21 2016, @05:58PM
I've felt that way much of my life. But recently I've learned about how truly bad manufacturing jobs and conditions were in the 1800s and 1900s and I understand why unions are 100% necessary. Few employers are truly benevolent.
Regarding their tough bargaining and holding their ground, the unions really had no choice, but ultimately they would lose because the power is with the $ controllers. I'm convinced, based on what I know and have seen of our entire economic system, that those steel plants and jobs were going to go overseas. Much cheaper labor, essentially no EPA, labor laws, etc., are the problem- it's not a level playing field.
The labor unions would do better to propagandize Chinese, Indian, Mexican, etc., workers into forming unions, but those workers would probably be killed, as so many workers were in the USA in the 1800s and 1900s. Carnegie was horrible in that regard.
They certainly can and do produce amazing steel. Very little of the good stuff makes it to the USA due to economics. But I am seeing better and better quality stuff coming from China, and I don't know if that's good or bad.
(Score: 0) by Anonymous Coward on Monday November 21 2016, @04:19PM
Can Trump reverse this? I am not sure. Even if he sets the regulations and laws in motion to bring back manufacturing, I suspect it will take another 30 years for it to recover to a point that the average Joe can consider the "American Dream" applies to him. Trump does not have 30 years, and I am not sure some people will want to wait that long. That is essentially for the next generation.
Can Trump restore the US economy to what it was in the '50s and '60s? is what you're asking.
(Score: 2) by fubari on Monday November 21 2016, @05:23PM
Unixnut: your post is a nice read - thank you. +1 Insightful.
Additional observations:
What asset-stripping didn't hit, arbitrage did (like wage, regulatory, tax).
Then again, new technology (smarter automation and manufacturing tech) seems like it will be a counter-force against arbitrage.
Equilibrium is always in motion.
Seems like a universal income is pretty much unavoidable.
For the interested reader, here is a link to The Lights In The Tunnel [thelightsinthetunnel.com] which is the best read I've found on where our future is going.
Excerpt: