CDZ Is it good for America when manufacturers opt to produce their wares abroad?

[Spare_change]

The direct and indisputable effect of losing manufacturing here in the United States is the loss of the middle class. How on earth can that be seen as a good thing?

Because, if you investigate the 'loss of the middle class', you will see that the greatest migration is from middle to upper class. On the flip side, the entitlement subculture that we have created has hindered migration from low to middle class.

That is counter intuitive at best, total obfuscation at least. Given the facts of wage stagnation, loss of jobs, and rising costs how many people have enjoyed the fairy tale you proffer?

Check the numbers ... ALL the numbers.

Quit whining and get the facts ... ALL the facts.

 

[Staidhup]

In order for a business to survive, make a profit, reward those assuming risk, they must remain competitive, develop a market for goods produced, and willing consumers to purchase. At such time when taxes, regulations, increases the cost of production, results in price escalation consumers look to alternatives at a lower price point. The manufacturing component provides the foundation whereby the middle class can develop and expand. Within the context of the current global world economy the world is flat, open bids are requested, received, contracts are entered into, raw materials and parts are produced, received, assembled, then shipped to the market based on demand which is price driven. Manufacturing and product assembly have become somewhat synonymous to one another due to reaching impact it has on local economies. Is it good for American middle class, no within the context of jobs and lack of upward mobility, yet for the consumer it provides a quality product at a fair price, stretches the purchasing power of the consumer. The unfortunate expense is the reduction in consumption due to contracting consumer base, such that when one of the principle players in the global economy suffers a contraction the world trembles.

 

[Luddly Neddite]

Time an time again, I encounter folks who assert that manufacturing jobs being "shipped" abroad is bad for the U.S., at least to the extent that the manufacturers are American companies. I would rather that American manufacturers produce their goods domestically, but I don't really have a problem with them opting instead to do so abroad. What do you think?

Ask Drumpf why he takes his business to Mexico and China.


Sent from my iPhone using Tapatalk

 

[320 Years of History]

Time an time again, I encounter folks who assert that manufacturing jobs being "shipped" abroad is bad for the U.S., at least to the extent that the manufacturers are American companies. I would rather that American manufacturers produce their goods domestically, but I don't really have a problem with them opting instead to do so abroad. What do you think?

Ask Drumpf why he takes his business to Mexico and China.

I really don't care why he did so, nor does it disturb me that he did. What does disturb me is that Mr. Trump did do so and is now "on about" bringing manufacturing back to the U.S., yet has not seen fit to do exactly that with his own brand of clothing. With regard to Mr. Trump, it's the hypocrisy inherent and patently visible in a man asking for my vote in his quest to become President that bothers me.

For all I care, he could appoint Justin Timberlake to bring back both sexy and manufacturing, but he ought to at least do as much with his own products.

 

[initforme]

$35000 is middle class? That's hilarious. Really tough to make it on that without never spending a dime and not paying some bills. Second if those jobs do come back employers will expect Americans to work for wages similar to overseas and who is going to want to work for that?

 

[320 Years of History]

It appears that what I've noted in this thread isn't even the limit of Mr. Trump's hypocrisy: Trump The Hypocrite: Investing Overseas Fine For Him .

 

[ABikerSailor]

$35000 is middle class? That's hilarious. Really tough to make it on that without never spending a dime and not paying some bills. Second if those jobs do come back employers will expect Americans to work for wages similar to overseas and who is going to want to work for that?

Got news for you..................back in 2002 (the last year I was active duty for the Navy), I only earned about 38,000/yr as an E-6 over 20 years.

Even though I earned what you call so little, I still managed to pay my bills and keep my household running.

Question....................do you hate those that you call "poor" just because they're in the military?

You don't join the military to get rich, you do it because you believe in it.

 

[320 Years of History]

FWIW....

​

For those who are interested, there are scores of income and income related tables from the U.S. Census Bureau here: Historical Income Tables - People - U.S Census Bureau .)

 

[theDoctorisIn]

Time an time again, I encounter folks who assert that manufacturing jobs being "shipped" abroad is bad for the U.S., at least to the extent that the manufacturers are American companies. I would rather that American manufacturers produce their goods domestically, but I don't really have a problem with them opting instead to do so abroad. What do you think?

It depends on what you mean by "good for America".

 

[320 Years of History]

Got news for you..................back in 2002 (the last year I was active duty for the Navy), I only earned about 38,000/yr as an E-6 over 20 years.

Even though I earned what you call so little, I still managed to pay my bills and keep my household running.

Question....................do you hate those that you call "poor" just because they're in the military?

You don't join the military to get rich, you do it because you believe in it.

The few folks I know who joined the military did it to get their college degree paid for. About all they believed in was that the military would indeed follow through on paying their tuition.

 

[320 Years of History]

It depends on what you mean by "good for America".

My suggestion, as goes the poll, is that you select the answer that best describes what you think. If you feel what "good for America" with regard to the answer you selected needs to be explained, or if you just feel compelled to define your interpretation of that phrase regardless of how you answered the poll question, then by all means do so.

As you can see, I answered "yes, or mostly yes," and the reason I did is that in consideration of an assortment of factors -- domestic, foreign and global economics, public policy making, geopolitics and international relations, and so on -- in both the near and long term, I determined the "good for America" aspects outweigh the "bad for America" aspects.

The poll and thread questions doesn't ask folks to enumerate what be their factors considered or the "goods" and "bads" corresponding to those factors, only that they answer honestly. If they opt to share any of that information, I'll gladly discuss it with them provided they present something that seems worthy of having a discussion. I can't say what other members will deem meritorious of their engaging one or more members about their poll answer or posted comments.

 

[FA_Q2]

I would say that in general, no this is not something that is good for the nation in general and I cannot see how you can construe it to be. That certainly does not mean that we should bar such from happening but we should not be openly encouraging it. Every nation must produce in order to retain wealth. The more production we do here in the states the better off we are. We cannot sustain an entire economy on the idea of services alone.

Often I see folks remark about the "loss of the middle class" as though the loss of that class, in and of itself, is such a big deal. IMO, the relevance of the middle class is that it is the economic class of citizens who historically have performed the "front line" work that must be accomplished to achieve productive outcomes. I happen to think that if the very same work gets done by folks who are now declared as being upper middle class, so be it. What is important is that the work get done, not what be the economic class of the people who perform it.

The particular class that produces might be irrelevant BUT the assertion that the middle class is disappearing onto a higher class is an awfully big assertion that I think you cannot show.

The relevance of the middle class is not that they do the ‘frontline work.’ The relevance is that they will be the majority in any healthy and free economy. We cannot all be wealthy in a capitalist economy – that is a fact as the prices of products will adjust to the ability of those to pay for them. Without a strong middle class you will end up with a few wealthy and a lot of poor. Even worse, the problem tends to make the situation even worse – fewer that can buy created products -> lower demand -> fewer workers -> fewer that can buy created products.

Time an time again, I encounter folks who assert that manufacturing jobs being "shipped" abroad is bad for the U.S., at least to the extent that the manufacturers are American companies. I would rather that American manufacturers produce their goods domestically, but I don't really have a problem with them opting instead to do so abroad. What do you think?

Ask Drumpf why he takes his business to Mexico and China.

I really don't care why he did so, nor does it disturb me that he did. What does disturb me is that Mr. Trump did do so and is now "on about" bringing manufacturing back to the U.S., yet has not seen fit to do exactly that with his own brand of clothing. With regard to Mr. Trump, it's the hypocrisy inherent and patently visible in a man asking for my vote in his quest to become President that bothers me.

For all I care, he could appoint Justin Timberlake to bring back both sexy and manufacturing, but he ought to at least do as much with his own products.

Why? You assume that a business has some moral obligation or code to follow. That is false – it has a singular purpose and that is to produce a profit (and stay solvent). Because one person may believe that manufacturing should be encouraged here in the US does not mean that they should ignore the CURRENT policies and situations. He is under no obligation to move his companies over here and see them go out of business just because he pushes policy that makes that proposition POSSIBLE.

Right now, there are many things that simply are not profitable here and starting a business venture would be counterproductive. What we need to do is create a climate that does the opposite – a climate that encourages businesses to produce products with American workers rather than Chinese ones.

 

[hadit]

Time an time again, I encounter folks who assert that manufacturing jobs being "shipped" abroad is bad for the U.S., at least to the extent that the manufacturers are American companies. I would rather that American manufacturers produce their goods domestically, but I don't really have a problem with them opting instead to do so abroad. What do you think?

I think the headcount per million dollars manufactured keeps on dropping. So, anyone who thinks insourcing will produce net jobs is not thinking.

Automation has also played a major role in the decline in manufacturing jobs here in the US. In the 1970's, you had, for one example, hordes of workers on the auto assembly lines. Today, the same quality and productivity can be done by a handful of people and a lot of robots.

 

[320 Years of History]

...

The particular class that produces might be irrelevant BUT the assertion that the middle class is disappearing onto a higher class is an awfully big assertion that I think you cannot show.

The relevance of the middle class is not that they do the ‘frontline work.’ The relevance is that they will be the majority in any healthy and free economy. We cannot all be wealthy in a capitalist economy – that is a fact as the prices of products will adjust to the ability of those to pay for them. Without a strong middle class you will end up with a few wealthy and a lot of poor. Even worse, the problem tends to make the situation even worse – fewer that can buy created products -> lower demand -> fewer workers -> fewer that can buy created products.

Red:
Well, "I" can't, but that is exactly what Pew's December 2015 research indicates. (I referenced the same data back at post #17.)

​

You can see just as well as I can what the images above show. In the report, Pew expressly makes the two following remarks in discussing what the charts show:

• While the share of U.S. adults living in both upper- and lower-income households rose alongside the declining share in the middle from 1971 to 2015, the share in the upper-income tier grew more.
• Over the same period, however, the nation’s aggregate household income has substantially shifted from middle-income to upper-income households, driven by the growing size of the upper-income tier and more rapid gains in income at the top.

I realize that the text on the graphs is somewhat confusing, along with both images being grouped together, may be somewhat confusing, and certainly not definitive, for the top chart depicts (at a high level) headcount apportionments of who is and is not lower, middle and upper income. The lower chart shows what share of income accrues to members of each income group. The question then is this:

• Seeing as it's clear that during the noted time period, the relative size of the middle class shrank, and the share of income going to upper income households grew, did the members of the middle class move to the upper income group or the lower income group?

Well, that's exactly the question the report answers. They do so with the following chart that shows us where those formerly middle class people went, and where they went is to the ranks of upper income.

​

Pew discuss the chart above:

• The share of American adults living in middle-income households has fallen from 61% in 1971 to 50% in 2015.
• The share living in the upper-income tier rose from 14% to 21% over the same period.
• Meanwhile, the share in the lower-income tier increased from 25% to 29%.
• Notably, the 7 percentage point increase in the share at the top is nearly double the 4 percentage point increase at the bottom.

So while I personally can't show that the middle class' shrinkage is attributable to formerly middle class folks becoming upper income, Pew clearly has shown exactly that. Sure, some of the middle class population became lower income, but more of them became upper income.

Having established that the larger share of formerly middle class folks became upper income than became lower income, the next thing one might want to know is which (formerly) middle class workers moved into the upper income group and which of them moved into the lower income group?

Pew answers that question in another report.with regard to industries. (click on the chart pic below to access the article and chart on Pew's site.) Right in line with the informatino above, we see that the drop in middle class workers headcount (as a percentage of the population overall) is accounted for by a much larger increase in upper income workers than that of lower income workers.

​

Looking at the information above, one has to next ask: is "the work" still being performed? Well, obviously people are still working, the unemployment rate isn't dramatically different enough now from what it was in 1971, and none of the departure from the the middle class is unaccounted for, which indicates that a meaningful overall lost of jobs is what happened. So, yes, "the work" is still happening.

Blue:
Taken together, the information from the two Pew reports referenced above shows that while the number of folks who can be labelled "middle class" has decreased, but that's not a bad thing because more of them became upper income than became lower income. Moreover, since net unemployment is comparable over time, though slightly higher at the end of 2014 than it was in 1971, the decline in the size of the middle class isn't explainable purely by job loss, particularly given that looking at the difference in 1970s unemployment among the populace is more than made up for by the portion of the populace that has moved from being middle class to being upper income.

So, if the middle have gotten richer and the work is still happening, what must have been the relevance of the middle class? Only that in the past they performed the lion's share of the actual work. Now, they still do, but a larger share of the overall quantity of work to be done is performed by folks who are upper income. I don't have a problem with that. Why should I? What's going to happen other that at some point enough lower-upper income folks will necessarily have to be deemed middle class once again? And what will that really indicate? It'll indicate that the median income figure has risen, and then "poof," the middle class will have all but instantly grown. (Of course, it won't be instant, but you surely know what I mean.)

And you know what? The minute that happens, whoever is President, and whatever their party, will equally instantly be "on about" how they resurrected/grew the middle class. Indeed, given what I found in the Pew reports, along with the fact that the next census will be in 2020, assuming the trends we see now continue -- that is, little or nothing s/he does meaningfully improves or worsens things -- whoever is the next President will get to make that claim, and make it they will.

Purple:
In some model or world, yes, one can, but that's clearly not what's been happening in our world. I'm not suggesting that what you wrote in purple text isn't consistent with "the theory." Heck, but for having looked for evidence that theory has been panning out or not, I would have thought the same thing, and the only thing that made me look was the onus I felt to get more informed that I already was before opening this thread.

Green:
With regard to the pattern of events shown above, that is clearly not what's happening. Were the pattern one of more middle class folks becoming lower income, I'd concur that the sequence you described is what's wrong the the observed decline in the size of the middle class.

If one wants to ask "could the shrinkage of the middle class at some point result from more folks becoming lower income?", I'd say sure it could happen. Given where things stand right now, and the trend that's been happening over the past 40 years, that could still happen because there are still enough folks in the middle class for the trend to shift without affecting the quantity of folks in the upper income class.

Is 40 years long enough to call something a "trend" (as go economics)? Yes. Is it so long that the trend cannot change? No, but where are the indicators that the directional thrust of a 40 year trend is or will certainly (most likely), dramatically, and quickly change? I don't see any.

(I know you, FA_Q2 , aren't generally given to doing so, but for the benefit of the "peanut gallery" members who are, don't reply to me with no credible facts and sources, or a bunch of biased sources.)

Why? You assume that a business has some moral obligation or code to follow. That is false – it has a singular purpose and that is to produce a profit (and stay solvent). Because one person may believe that manufacturing should be encouraged here in the US does not mean that they should ignore the CURRENT policies and situations. He is under no obligation to move his companies over here and see them go out of business just because he pushes policy that makes that proposition POSSIBLE.

Right now, there are many things that simply are not profitable here and starting a business venture would be counterproductive. What we need to do is create a climate that does the opposite – a climate that encourages businesses to produce products with American workers rather than Chinese ones.

Brown:
Actually, I assume individuals, not businesses, have that onus. I'm not annoyed merely because Mr. Trump's manufacturing happens in Mexico and China. My outrage with Mr. Trump is his "it's okay for him to offshore production, but not for others" attitude.

• Apple:
  http://gizmodo.com/trump-says-he-will-force-apple-to-manufacture-in-the-us-1753626111
  Trump promises he'll force Apple to manufacture in the US - CNET
• Car manufacturers; Ford:
  http://www.detroitnews.com/story/ne...ump-press-ford-cancel-mexican-plant/28816173/
  Trump: Put a Tariff On Companies Who Make Cars In China, Mexico - Breitbart

What's especially interesting from the Breitbart article is that what Mr. Trump is doing when he speaks of what is presumably the national debt (the $18 trillion figure) in the context of manufacturing goods overseas, is conflating the national debt with the trade imbalance. I certainly expect a U.S. Presidential candidate to (1) know the difference between the two and (2) not confuse voters by referencing the deficit while speaking about a matter that contributes to the trade imbalance. Yet that's exactly what he did when he said,

"We owe $18 trillion. It’s going to be — very soon going to be $20 trillion that we owe, okay? We have to start creating jobs. We have to start creating wealth. Look, we all go to good schools. I go to great schools. You go to great [schools.] You don’t have to be even a smart — you don’t have to be the great student to know, when Ford builds this massive plant to build cars, and then they bring them back into our country, no tax."​

Re: the bold italicized text just above, apparently one must be a better study of economics than was Mr. Trump to know that the trade deficit does not contribute to the national debt. I don't know what Mr. Trump did in the good school he went to, but learn economics clearly wasn't it. Perhaps he copied answers from the person seated next to him? I don't know, but I wouldn't put it past him to have done so. Perhaps he just memorized "stuff" for the test, but didn't really learn it? Lots of folks do that as well.

 

[320 Years of History]

Time an time again, I encounter folks who assert that manufacturing jobs being "shipped" abroad is bad for the U.S., at least to the extent that the manufacturers are American companies. I would rather that American manufacturers produce their goods domestically, but I don't really have a problem with them opting instead to do so abroad. What do you think?

I think the headcount per million dollars manufactured keeps on dropping. So, anyone who thinks insourcing will produce net jobs is not thinking.

Automation has also played a major role in the decline in manufacturing jobs here in the US. In the 1970's, you had, for one example, hordes of workers on the auto assembly lines. Today, the same quality and productivity can be done by a handful of people and a lot of robots.

Yes, that's true. I recall reading somewhere what share of manufacturing job loss can be attributed to technology gains, automation, but I don't recall the figure. I recall having posted about it (and providing source links) somewhere on this site, but I'll be damned if I know what post or thread it was. Sorry.

 

[320 Years of History]

Time an time again, I encounter folks who assert that manufacturing jobs being "shipped" abroad is bad for the U.S., at least to the extent that the manufacturers are American companies. I would rather that American manufacturers produce their goods domestically, but I don't really have a problem with them opting instead to do so abroad. What do you think?

I think the headcount per million dollars manufactured keeps on dropping. So, anyone who thinks insourcing will produce net jobs is not thinking.

Automation has also played a major role in the decline in manufacturing jobs here in the US. In the 1970's, you had, for one example, hordes of workers on the auto assembly lines. Today, the same quality and productivity can be done by a handful of people and a lot of robots.

Well, I just found it...it was in this thread. LOL Here's the source document to which I referred: http://digital.sabanciuniv.edu/elitfulltext/3011800000093 .

 

[TNHarley]

I don't see how anyone could say that artificially made - minimum wage jobs, stocking Chinese junk is better than us making our own.
I don't see how someone going to college has to settle on flipping burgers for 15 bucks an hour is a good thing.
I think that anyone that sees the decline fo the middle class and our jobs as a good thing, is either ignorant or selfish and refuses to see the big picture.

 

[william the wie]

I don't see how anyone could say that artificially made - minimum wage jobs, stocking Chinese junk is better than us making our own.
I don't see how someone going to college has to settle on flipping burgers for 15 bucks an hour is a good thing.
I think that anyone that sees the decline fo the middle class and our jobs as a good thing, is either ignorant or selfish and refuses to see the big picture.

The problem is that most college degrees are worthless and have been for a long time, they are also grossly overpriced.

 

[TNHarley]

I don't see how anyone could say that artificially made - minimum wage jobs, stocking Chinese junk is better than us making our own.
I don't see how someone going to college has to settle on flipping burgers for 15 bucks an hour is a good thing.
I think that anyone that sees the decline fo the middle class and our jobs as a good thing, is either ignorant or selfish and refuses to see the big picture.

The problem is that most college degrees are worthless and have been for a long time, they are also grossly overpriced.

I wont argue with that!

 

[320 Years of History]

I don't see how anyone could say that artificially made - minimum wage jobs, stocking Chinese junk is better than us making our own.
I don't see how someone going to college has to settle on flipping burgers for 15 bucks an hour is a good thing.
I think that anyone that sees the decline fo the middle class and our jobs as a good thing, is either ignorant or selfish and refuses to see the big picture.

I don't believe anyone has argued the points you identified above. I'm certainly not. For example, in post #34, I don't argue that the decrease in the size of the middle class is a good thing. I argue that the reduction in the size of the middle class that we've observed over the past 40 years, in and of itself, is neutral thing, and I show that what is a good thing is that the observed decline is attributable to more of the formerly middle class becoming upper income than their becoming lower income. Moreover, I readily and clearly state in post #34 that were the decline in the size of the middle class accounted for by more of them becoming lower income than becoming upper income, it would indeed be a bad thing.