Initial Thoughts and Observations:
The man notes in the video that machinery or automation is driving people out of their jobs in the coal industry, this is something I did not know.
The economic replacement of labor with capital is not unique to any industry or group thereof. Office field and line workers all face the same challenge. I've seen it...Hell, I've been for some firms instrumental in transforming their operations from being labor intensive to being less labor intensive. Without exception, what happens over and over again is the same.
- The firm implements technology which automates various aspects of the organization's operations.
- Workers whose skill set merely mimics that of the implemented technology are obliged to either develop new skills or work elsewhere. The skill their employers demand are analytical and problem solving skills, not physical skill.
The trend is not new. It began in the late 1980s. It has not stopped nor will it. Each of us has a choice to make: (1) bitch about it, or (2) develop the skills that are in demand.
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coal mining....steel mills...
The steel mills all closed down due to cheaper foreign steel (as far as I know that is the reason).
While it's convenient to consider coal mining and manufacturing as being the same types on businesses/industries, they are not. Structurally, as businesses, a hugely significant difference is that the coal industry, for the most part, isn't subject to globalized competition, whereas steel manufacturing is. Ninety percent of the coal produced in a given place, usually a region or nation, is used in that place. Steel, in contrast, is exported as well as sold "locally."
Because of the very different competitive profiles of coal and steel, the dominant factors effecting contractions in those industries are different.
The main driver to these very different profiles is that unlike steel, there is no value to add to coal. Coal is a final good that is either used as-is to produce energy or used as-is as an ingredient in the production of other goods. In contrast, raw steel can has almost no uses as a finished good. Instead, fabricators convert raw steel into usable steel products -- girders, automobile parts, etc.
I don't think anyone can watch any video like this, which can be directly echoed by people in Detroit, or Pittsburgh, or anywhere else manufacturing has left, and not only feel sympathy for these people but for a way of life. I do understand the sense of loss not only of livelihood but of identity as part of the nation.
Sympathy for the people and their sense of loss, yes. As for a "way of life" or a given "identity as a part of the nation," well, for that I have nostalgia, but not sympathy.
Manufacturing has been in decline for 40 years.
Let's be clear here. Manufacturing employment has decreased in the U.S.
Manufacturing itself has not.
- Manufacturers have experienced tremendous growth over the past couple decades, making them more “lean” and helping them become more competitive globally. Output per hour for all workers in the manufacturing sector has increased by more than 2.5 times since 1987. In contrast, productivity is roughly 1.7 times greater for all nonfarm businesses. Note that durable goods manufacturers have seen even greater growth, almost tripling its labor productivity over that time frame.
- Over the next decade, nearly 3½ million manufacturing jobs will likely be needed, and 2 million are expected to go unfilled due to the skills gap.
- Over the past 25 years, U.S.-manufactured goods exports have quadrupled. In 1990, for example, U.S. manufacturers exported $329.5 billion in goods. By 2000, that number had more than doubled to $708.0 billion. In 2014, it reached an all-time high, for the fifth consecutive year, of $1.403 trillion, despite slowing global growth.
- World trade in manufactured goods has more than doubled between 2000 and 2014—from $4.8 trillion to $12.2 trillion.
- Taken alone, manufacturing in the United States would be the ninth-largest economy in the world. With $2.1 trillion in value added from manufacturing in 2014, only eight other nations (including the U.S.) would rank higher in terms of their gross domestic product.
- R&D in the manufacturing sector has risen from $126.2 billion in 2000 to $229.9 billion in 2014. In the most recent data, pharmaceuticals accounted for nearly one-third of all manufacturing R&D, spending $74.9 billion in 2014. Aerospace, chemicals, computers, electronics and motor vehicles and parts were also significant contributors to R&D spending in that year.
So when one wants to lament the "decline of manufacturing," one needs to be very clear about what has disappeared. It is the low-skill manufacturing jobs, not the manufacturers themselves and manufacturing as an industry, that have disappeared. That distinction is essential to understand and it's the a distinction that one will rarely, if ever, hear politicians articulate, let alone highlight.
The fact of the matter is that while the tariffs and protectionist actions that have been proposed of late may inspire some manufacturers to repatriate their facilities, they will do so and merely use capital rather than low-skill labor. Now that may (I do mean "may," not "will") yield a boost in tax revenues, it doesn't resolve the "loss of low-skill manufacturing jobs" problem. What will resolve that problem? Boosting the skill levels of workers so they can perform the more analytical types of jobs (the millions of them noted above) that are in demand.
So why haven't political leaders pushed harder to implement skill/knowledge building programs? Well, the reason is not simple, but it is simple to understand. The reason is that doing so creates a different kind of jobs problem and it also creates a political power problem. Here's what it is:
- The types of workers most needed are people with strong analytical skills and abilities, strong critical thinkers, folks who will routinely invest the time and effort "trust, but verify" and who know how to do so very adroitly and will do so using impartial information sources that provide full disclosure about their methods of and approach to information development.
- It's not easy, it's nigh impossible, to "pull the wool over the eyes" of those kinds of people. Accordingly, a lot of political rhetoric "goes out the door," or "in one ear and out the other." Emotional appeals such as those we routinely encounter today may carry some weight, but they don't sway the day, as it were. Instead, objectivity bolstered by valid and sound analysis wins arguments.
So what "jobs" problem does that create? It creates a jobs problem for every single politician, interest group, lobbyist, etc. that has depended on misinformation, slanted expositions of ideas and facts, in short manipulation, to advance their points of view and policy objectives. Folks whose jobs depend on those approaches to driving policy quite simply themselves will be put out of a job if/when the electorate becomes highly and legitimately analytical. And, no, I'm not saying that every pol is duplicitous that way; I'm saying that a lot of them -- from the federal level down to the community level -- are. So if the country were to create a more intellectually savvy populace overall, the power of those unscrupulous individuals, and that of the individuals and entities in whose "pockets" they sit, goes "bye bye." Those folks -- pols and their puppet masters -- simply are not going to deliberately make that sort of political transformation happen.
