The average hourly wage paid to a key group of American workers has fallen from last year when accounting for inflation, as an economy that appears strong by several measures continues to fail to create bigger paychecks, the federal government said Tuesday.
For workers in “production and nonsupervisory” positions, the value of the average paycheck has declined in the past year. For those workers, average “real wages” — a measure of pay that takes inflation into account — fell from $22.62 in May 2017 to $22.59 in May 2018, the Bureau of Labor Statistics said.
This pool of workers includes those in manufacturing and construction jobs, as well as all “nonsupervisory” workers in service industries such health care or fast food. The group accounts for about four-fifths of the privately employed workers in America, according to BLS.
Without adjusting for inflation, these “nonsupervisory” workers saw their average hourly earnings jump 2.8 percent from last year. But that was not enough to keep pace with the 2.9 percent increase in inflation, which economists attributed to rising gas prices.
“This is very likely because of the spike in oil prices eating into inflation-adjusted earnings,” said Allen Sinai, chief global economist and strategist at Decision Economics. “We pay for energy-related costs out of our wages, out of our compensation. And it’s making a real impact.”
The fall in those wages has alarmed some economists, who say paychecks should be getting fatter at a time when unemployment is low and businesses are hiring.
“This is odd and remarkable,” said Steven Kyle, an economist at Cornell University. “You would not normally see this kind of thing unless there were some kind of external shock, like a bad hurricane season, but we haven’t had that.”
The falling wages promise to exacerbate historic levels of U.S. inequality. Within the labor force, it means workers who were already making less are falling further behind. And if private laborers as a whole are seeing their earnings flatten while the economy as a whole grows at an annual rate of more than 2 percent, that means the gains are going almost exclusively to people already at the top of the economic ladder, economists say.
“The extra growth we are seeing in the economy is going somewhere: to capital owners and people at the top of the income distribution,” said Heidi Shierholz, director of policy at the Economic Policy Institute and a former chief economist at the Labor Department, noting workers’ share of corporate income remained relatively low as of January. “And what we’ve seen is in recent period a much higher share of total income earned going to owners of capital.”
Stephen Moore, a conservative economist at the Heritage Foundation and campaign adviser to President Trump, said the figures were troubling. But he added that the drop in real wages could be a reflection of the economy adding low-end jobs, rather than declining values further up the chain. If so, he said, that would be a sign of economic vitality, as the economy pulled in unemployed workers.
But other experts doubted that argument. “For that to be true, you’d have to see that the jobs coming back are particularly low-wage jobs,” said Elise Gould, an economist at the Economic Policy Institute, a left-leaning think tank. “There was some evidence of that initially in the recovery, but I don’t think the evidence supports the idea.”
[U.S. economy extends its hiring spree, with a better than expected 223,000 new jobs in May]
But why is wage growth so tepid?
This problem is not new: Slow wage growth bedeviled the Obama administration, as well.
Economists broadly disagree about the cause of persistently weak wage growth, offering a variety of possible explanations.
Ernie Tedeschi, a former treasury official under President Barack Obama, said the unemployment rate may create a misleadingly positive impression of the health of the jobs market, given how many Americans dropped out of the labor force during the Great Recession.
Weaker union rights for workers may also be cutting into their ability to force pay increases from their bosses, said Jared Bernstein, who served as an economic adviser to Vice President Joe Biden.
Trump officials pointed to what they called a strong growth in private business investment in the first quarter of 2018, after the tax law’s passage, and expressed optimism that the law would translate into higher wages for workers in the near future. They also dismissed the allegation that the data disproved their claim that the tax law would raise the average worker’s wage by $4,000.
“The law is just six months old,” said DJ Nordquist, chief of staff for Trump’s Council of Economic Advisers, in an email. “Our estimates [of the tax law’s benefits] were for ‘steady state’ — when the full effects of the law spread throughout the economy, which will take years, as we always said it would.”
But to Democrats, the tepid wage growth helps bolster their claim that the Republican tax law was overwhelmingly geared toward the wealthy and that a more direct role for the federal government is needed to help workers.
“Today, while the cost of health care, prescription drugs, gasoline and housing soar, the average worker, according to the Bureau of Labor Statistics, is now making slightly less than he or she made one year ago after adjusting for inflation,” Sen. Bernie Sanders (I-Vt.) said in an email to The Washington Post, arguing for a higher minimum wage and a single-payer health-care plan.
Much of the wage stagnation is due to pure, unadulterated GREED by those at the top.
This wage stagnation makes a good case for “indexing” wages to a percentage of what the CEO or owner makes. I realize that, in capitalist circles, this is seen as outright heresy and is considered a “slide toward socialism”, but, as the wage gap grows, many people will see indexing as a viable option.
When workers see their industries and companies plead poverty while “those at the top” receive exorbitant wage and benefit packages, while workers are expected to make wage and benefit “sacrifices”, this only “adds fuel to the fire” and makes indexing an attractive concept.
Henry Ford had the right idea and CREATED a market which had not existed when he paid his employees $5.00 per day when the average wage of the day was around $1.25 per day.
Of course, the wall street types and the banksters howled that Ford’s wage rates would destroy capitalism.
Guess what?? The OPPOSITE happened. Henry Ford knew one of the basic tenets of a truly free, capitalistic society, that a well-paid work force would be able to participate and contribute to a strong economy, unlike what is taught in business schools today–that wages must be kept to a bare minimum and that the stockholder is king.
Our “free trade” politicians have assisted the greedy wall street types and banksters in depressing wages on the promise of cheap foreign labor and products.
A good example of this is the negative criticism that Costco receives for paying its employees well above market wages. These same wall street types praise Wal-Mart for paying its employees barely subsistence wages while assisting them in filling out their “public assistance” (welfare) forms.
Any sane person KNOWS that in order for capitalism to work, employees need to make an adequate wage. Unfortunately, this premise does not exist in today’s business climate.
Henry Ford openly criticized those of the “tribe” for manipulating wall street and banksters to their own advantage, and was roundly (and unjustly) criticized for pointing out the TRUTH. Catholic priest, Father Coughlin did the same thing and was punished by the Catholic church, despite his popularity and exposing the TRUTH of the American economy and the outsider internationalists that ran it . . . and STILL run it.
Our “race to the bottom” will not be without consequences. A great “realignment is necessary (and is coming) . .
I posted a Wip Wondering some time back asking which is worse, envy or greed.
Anchyrst : well stated , 40% of Wal Marts profit is from EBT cards and the yearly cost to taxpayers in welfare benefits to Wal Mart employees is over $6 BILLON PER YEAR !
It was the high paid union working persons tax base that supported American society from street lights and schools to even little league teams . The small business people serviced the general needs of the industry working people whose jobs supported them .
After hollowing out American manufacturing and tossing all the working people under the bus they once built and maintained we see the results .
Bankrupt counties cities and towns and a $20 plus dollar per hour job is fine for trainees just starting out . Sadly many will comment that things will improve but offer no proof , I offer 40 years of economic facts and final results not some political fart in the wind “MAKE AMERICA GREAT AGAIN” . Still no real answer with what and by who and at what pay and benefit package . The responses are typically nonsensecal babble from acedemics that leave me with the final question . Has any of these babblers ever really done an honest day’s work ? I think not !
$20/hr=$41,000/yr starting pay? That would be double most people’s pay in this part of the South and you’re complaining!
Good read but the fact is that real unemployment is NOT low, just masked by people who aren’t counted in the official figures. And adding extremely low wage jobs, not even in the millions, is not a ‘win’ for anyone.
Another thing people don’t realize is that the price of energy has downstream effects on all consumables. From harvesting all the way up to the grocery store. Same for non consumables. Every step along the way of providing the commodity, adds energy inflation to the formula. The consumer gets to pay all the steps along the way, to purchasing the product, not to mention the gas to get to the store to buy them!
That’s energy inflation compounding….
Actually buying power for a worker’s wages has been declining since 1973.
Falling wages mean more homelessness. More homelessness means more EBT cards. If 40% of Walmart’s sales is from EBT cards that sure seems like corporate welfare using the poor to transfer the money. I wonder how many corporations are reaping the benefits of the welfare system.
What we seem to have is a corporate welfare system that use the poor to make the transfer. So as the poor increase in numbers the corporations grow in size. Not a bad outcome when one considers that the congress really represent the corporate person and not the people.
Workers wages have fallen because they are overpaid at current levels relative to the competition. It is a global economy, and the high wages earned since the 1950s are not sustainable given the wages currently paid in nations that are in direct competition to US workers. This competition is putting downward pressure on US wages. Further, wages in manufacturing will not increase given the steady automation of jobs, resulting in fewer workers required at the same time as output increases.
I have said this for some time – middle class incomes will fall until parity is reached with income levels elsewhere in the global economy. I have estimated once middle class wages/standard of living drops to 2/3s of its former position, it will stabilize. There is still a long way for real wages to fall before it hits that level. The unique circumstances that arose after WW2 that allowed the US to have a high standard of middle class lifestyle no longer exists. Combine those factors with the readily available welfare benefits distributed around, which kills incentive, and you get plummeting wages.
This trend will continue.
Llpoh that ww2 argument has only government instilled inequities places upon working people for the benefit of a small percentage of investor class that bought the American government and buried the American citizens with wealth transference and debt rather than support and protection the American structure built up for average working people . The results are obvious as are the lies regarding a global economy ! That’s just government and corporate bull shit to convince people they were overpaid as the wealth produced from their productivity was leached out by paracitic practices done so much and often to appear normal and even fair !
You have bought into the BIG LIE as have many .
What was left in the crony capitalist state is debt and failing infrastructure and the blame has been strategically dumped on the victims as the 1% and the government minions make off with the spoils
Boat – my comments are based on 40 years running businesses throughout the world. The fact is, Americans have lived beyond their means for a long time. They benefitted by being the only developed nation that was untouched by WW2 with respect to their infrastructure and means of production, and developed a middle class while the others had to rebuild from scratch.
You are looking for someone to blame. No one is to blame, other than the Americans themselves that could not see that a culture of debt and living beyond their means, combined with declining educational superiority, welfare, falling work ethic, and deteriorating family values was an unsustainable way of living.
It is a global economy. Capital and human resources flow. The US middle class is no longer worth the wages they receive relative to their competition. Hence, falling wages. And it will continue.
Sure, some are doing well. It is what happens when the world is full of suckers. Suckers are like sheep – they get sheared.
Here is an idea – how about people dedicate themselves to becoming the 1%? If I can do it, and if mine can do it, then I assure you a great many can. Hard work, goals, education, thrift, family, staying out of debt are still viable pathways to a higher standard of living. It beats the hell out of being a sheep and bleating about how the world is so unfair.
94 MILLON Americans are losers and 1% were born on third base and strut around like they hit a home run .
Plenty of us did well and have no grudge against life however far to many have been literally thrown under the bus regardless of what happened to us those left behind weigh a heavy cost on our society that is the problem
Not really. Tariffs will level the playing field considerably. Look at what our drop in taxes is doing to Canada. They pay first world wage, but their economic model is based on assembling Asian parts and then shipping across the border to sell here. They lose the ability to sell Asian stuff in the United States tarriff free ( and they are about to), they suddenly become very non competitive. Their carbon taxes and high income tax rates become anchors around their necks. Trudeau is an idiot
Plenty of good points made. I would add that it has become difficult to measure wage loss and inflation by design. Packages are smaller, brand names are lower in quality, so many things are subsidized, ad nauseum.
Subwo mentioned 1973. I knew plenty of men were able to make ends meet on 250.00 per week with the wife not working out in Suffolk county NY, a fairly high priced county. Tradesmen, Police and Firemen all had split level ranches with 2 cars and a boat in the driveway.
One did not have to be a CPA to figure the cost of living. I’m still not sure if those days were good or bad, I’m just saying we all knew which end was up.
The police and firemen are still doing well. As it is now anyone who does not work in government is a sucker and loser. Go to TSA:overtime, absolute job security for ever and if you are so inclined a few free feels from time to time. Sure beats COSTCO.
A bunch of contributing factors are at work. Monetary machination by all the Central Banks, more real price competition (offshoring in the US) made possible by huge advances in tracking and logistics. Huge increases in commodified production and shippind, and a lot of nasty cooperation between some (I do not know which) members of the global ruling elite. Add to that some of the amazing progress made on tech-managed propaganda, and the stage is set.
In the US, a significant factor is competitive pressure from immigrants legal and illegal. The legal immigrants (H1-B, and the like) hold down wages at the middle/upper range like coders and nurses. The illegal immigrants pressure everyone from the middle on down, managers, tradesmen, and laborers alike. Real pressure, and no one makes any effort to quantify and report on it.
Add in US consumer debt slavery, and the obvious intention to bankrupt many of the States and local government units through purposefully insane tax and spending policies, and we see wages which have fallen for a long time, and are nowhere near the bottom.
This will not end well.
Get. A. Government. Job.
My daughter is going to enlist. Hopefully the Air Force. Good times ahead.
Those salaries paid by insurence payments and tax payer funded paychecks are the few secure wage offers for average people the rest are mostly indentured servant wages making some one wealthier thru abusive labor practice as they grind thru people and always the same bull shit from far to many employers “I can’t find anybody that wants to work” translation : nobody will put up with shitty pay and working conditions while I rape them of their time and effort and bull shit them continoully about how good things will get for them after I finish using them like a Dixie cup !
“Workers wages have fallen because they are overpaid at current levels relative to the competition.”
The competition is only with low quality products. High quality products require skilled workers to produce; not robots or non-skilled workers, and to this end my vision tells me we will go back to that period where high quality will be demanded.
Yes, globalism and monopolies have ruined the wage of the skilled worker. As a result we have far less skilled labor in the trades and the work force. There is lot’s of frustration in the world of business because of incompetence and lack of all types of skills. There is little intentional thinking and directed attention across the entire specter of the economy.
There are presently lot’s of warranty claims being filed due to crappy products and workmanship. This is having a bad effect on the bottom line of many businesses and the large corporations putting out bad products and services.
I am looking forward to the high tariffs on foreign products and the eventual breakup of these large corporate monopolies. There is no reason why a man is not paid a fair price for his skills in the labor market except for greed by investors and monopolies protected by the government.
If it is true that competition from foreign manufacturers using cheap labor is bring down working class wages in this country then why are those same products costing us so much? This is why tariffs are needed to equal the playing field. This is about greed by those middlemen who are selling us those products.
Why should the standard of living go down in america because of those large corporations in this country not protecting their labor force and the quality of their products? It is because of greed caused by protecting these amoral monopolies run by amoral corporate flimflams that only care about service to self?
America became a great economic power because of men who were the son’s of immigrants that came here from Europe and had the drive to create the companies from their own sweat that are now owned as brands of these mega corporations who now are ruining the reputation of these brands as quality products.
Many companies that were created by american engineers in the 1950s, 1960s and 1970s have also been bought out by these mega corporations and are now brands that are also being ruined.
America did fine before all these imports. The imports are a big problem for our labor force. Before the competition created by all these imports american products were about quality.
I don’t buy the premise that wages must go down because of foreign cheap labor low quality products being dumped on us by greedy men whose motto is “service to self.” I hope President Trump follows through on his stiff tariffs. This is service to america.
Money in the pockets of our working force can purchase affordable housing which is solely needed in this country. New towns need to be raised where the housing needs of average people can be met. New factories putting out durable goods needed by these communities can be built in these new towns employing the people there.
It is in man’s nature to work. There is a certain satisfaction in producing quality products. If you don’t pay a fair wage and you don’t care about your labor force then what else can one expect but a poor labor force producing poor quality products. And who is the blame for this? In the case of the mega corporations could it be the CEO and his highly paid corporate baggage that have ivy league education in business management but sorely lack manufacturing experience. Many of the mega corporations are going down; mark these words, but they are so clever in accounting magic their investors or boards of directors don’t see the writing on the wall yet.
America has gone though a dark period in manufacturing but this period will pass. Educated idiots with an attitude of service to self have navigated this dark period but this is all coming to an end. It has to for America to become great again.
Viva la tariffs.
Tbird – you have zero idea what you are talking about. Zero. High quality products are automated as far as possible. Automation produces far higher quality than do humans. Robots are accurate and repeatable.
In any event, skilled labor is dying out as a result of automation. Manufacturing is a dying employer, and will continue to automate. Skilled construction trades will be automated slowly but surely. Truck drivers will be automated away.accountants and lawyers, too. The list is damn near endless.
You spout a bunch of truthisms. You got any proof for those things? Saying something is so does not make it so. Quality is far higher today than it has ever been – given its price point, which is far lower than previously. The exception being that if a product has too many electronic functions there can be issues given the hsear number of possible failures. But generally, products are better than ever before. Because humans have been steadily taken out of the equation.
By the way, I am all for a level playing field. But be careful what you wish for re tariffs. The US exports a trillion dollars a year in gods, more or less. And many of those goods are high tech. You really want to stop importing crap and stop exporting high tech? Sounds like a losing equation to me, if that happens. Think things are bad now, if high tech exports take a big hit, it will leave a mark.
It’s about 500% worse than said because inflation is about 10%, not 2%. One reason US companies costs are high is all the high Social Taxes they must pay: federal and state income taxes, Social Security, Medicare, Medicaid, unemployment, workers compensation, health and dental, liability insurance, property insurance, high property taxes, utility taxes, environmental requirements, etc.
@Lipoh: Where are you coming from? If you are talking about precision machine parts like for jet engines I won’t disagree with you. But for all other products in durable goods and the like I will have to disagree with you. Automation produces quantity not quality. In many production lines like in steel and copper wire extrusion, plastic pipe extrusion and so on automation has to be watched by human eyes.
Look at all the GM cars in the scrapyards; made by automation. Robots are accurate and repeatable but do you see them being used for quality control? Do you know of them producing Rolex watches, fine china, 200,000 cars?
Yes, skilled labor has/is dying out as a result of automation but so has quality.
“Skilled construction trades will be automated slowly but surely. Truck drivers will be automated away, accountants and lawyers, too.”
I think you have too much faith in the lie of total automation. Some of the skilled trades are already seeing automation; like the welding trade, but for the most part no robot is going to replace the skilled trades. Robots do not have the thinking or creative skills that a human has when dealing with immediate changes involved with ongoing work. As for lawyers and judges sure they can be automated because administrative laws as amoral as they are, seem to be cut and dry dealing with facts; not values. But I don’t think accountants; good ones that is, can be replaced by a robot.
Ever notice that all cars look the same these days no mater what make they are? Automation. Quantity on the production lines. No time for the human touch that produces quality. Is that why there is so many recalls? Perhaps it is that expensive robots are limited in their dexterity to new positions that is the reason there is no more creativity in car designs?
“You spout a bunch of truthisms, you got any proof for those things?”
Only in my own experience in the belly of the beast. Like you I have been in manufacturing production off and on for over 40 years in a technical capacity, and have worked in many production facilities that produce steel, fertilizer, fiberglass, water pumping stations of all sizes, brass, wire, electrical products, glass, rubber, and more. So my experiences and observations have been direct at all levels of engineering, procurement, fabrication, assembly, and quality control.
And no Quality is not far higher today than it has ever been. You are so wrong about that. And about the price too. And Quality has gone down because skilled craftsmen have been taken out of the equation.
Products are not better than before. Durable goods used to last for years. Today one is lucky if something lasts a year without breaking down. Extended warranties are offered everywhere for products purchased; at the cost of the consumer. So how has quality gone up?
Drive by your local dump and see how high the mountain has grown with broken goods. Check out the boneyard of businesses that are in the trade of doing repairs and observe all the broken items. People have garages for of broken items that need to be discarded. Scrapyards are full of newer car wrecked and totaled out because unlike the older cars of our time they cannot even survive a slow speed wreck.
We are consumers of throw away products because the quality is so low that they can’t even be repaired. Or if the item can be repaired it costs as much as a new item. This is what automation has done to us.
So you really think that products are higher quality today? I don’t know where you have been. Perhaps you are an elite that has always bought high end products which are around but is not affordable for the common man. But you would not know if you only frequent high end retailers.
In conclusion I don’t think we will ever stop exporting our high tech products. Many countries already put tariffs on our products coming into their country. The only thing President Trump seems to be doing is putting tariffs on the junk we are importing. We should not compare our laborers with China because this country was built on a higher standard of living. So wages should reflect that higher standard. Making billionaires is not what this country is about; making millionaires is.
We need to restore vocational education in our high schools and put out more skilled labor for the market.
You may see the day Llpoh when skilled workers have their place on the production line with decent wages. Our society does not have people with all the same IQ. Neither does the world. We have to realize this when it comes to employment. It used to be the job of the federal reserve to make sure this country has full employment. This also means a livable wage. This is a developed country. There is no reason why anyone that has a job can’t afford to have a roof over their head with the wage they make.
Working is honorable. If a man is unable to have a shelter over his head with his working wage something is wrong. Even in the poorest of countries where people are dirt poor they have a roof over their hear. How come not here?
Tbird – I do not know what roles you have been working in exactly. But I assure you robots are far, far more accurate than humans. they weld better, they assemble better, they grind, cut, polish etc. better. They are very very accurate, and they are repeatable in that accuracy.
You mention cars – cars are of a far higher quality today than ever before. It is no comparison. You are possibly using the term quality instead of less durable. Cars are lighter, perhaps less durable – but of far higher quality. I have not had an issue with a car in a very long time. In the 70s it was a weekly if not daily issue. Same goes for whitegoods.
Products are made to a price point. Durability is sacrificed for cost. however quality is still high. Things work when purchased. They may not last, owing to the cost factor impacting durability.
You say above: “We should not compare our laborers with China because this country was built on a higher standard of living. So wages should reflect that higher standard. Making billionaires is not what this country is about; making millionaires is.”
Seriously, what a load of crap. You think the US started out with a high standard of living? Bullfuckingshit. Until WW1 it was almost 1/2 agrarian, and most of the rest were poor factory workers and such. The richest people ever relative to their time was in that period – JP Morgan, Getty, Carnegie, etc., were far richer than many we see today. Only three or four of the richest Americans ever out of the top thirteen are alive today:
https://www.businessinsider.com.au/richest-americans-ever-2011-4#1-john-d-rockefeller-13
Where do you get the stuff you spout? It is easily refuted. The US has always been a creator of billionaires. And millionaires. There is currently estimated to be 10 – 15 million millionaires in the US – or almost one in every twenty people. The number increased by almost 700,000 last year alone. Opportunity has never been better to become a millionaire. These times are a godsend for those wanting to get ahead, because the competition is so damn weak.
The US made its standard of living by outproducing its competition, especially after WW2, when other nations were in ruins. It was able to attain and maintain that standard because it was far more productive. Production built the standard of living, not the other way around, as you seem to think. Wages need to reflect output, not reflect “standard of living”, as you claim. If the US produces more, relative to China say, it will earn more and have a higher standard of living. The US produces more, but it does not produce enough more to support the differential that currently exists. And so wages and standard of living will fall. Buyers of labor have cheaper options, be it consumers or be it companies. And as such, they will continue to ea away at the current wage structures and standards of living.
Today, the US no longer outproduces its competition so as to actually earn the higher standard of living that Americans have come to expect. As a result it must reduce its expectations. Because wages will fall.
I recommend that people take the steps necessary to take advantage of the multitudes of sheeple out there, so as to rise to the top. Work hard, value family, get an education, stay out of debt. Wealth is obtained by competing, not via expectation of a standard of living. Most of the US can no longer compete. It offers enormous opportunity for those that are prepared and willing to do so.
Tbird..
Well said. Automation apparently couldn’t produce the high quality rocket engines we just received from Russia.
Llpoh – what areas of manufacturing are you talking about – aerospace? Let’s get on the same page so we can understand each other.
When it comes to durability of the drive train automobiles have come a long way provided they are serviced regularly, however safety wise they are death traps. And we will not see them 50 years from now in parades of antique cars. They don’t have the durability for that. They are manufactured on the cheap with a lot of plastic parts.
I am talking about the manufacture of durable goods like pumps, electric motors, compressors, appliances of all types, air conditioning/refrigeration units, and many products industrial, commercial, and residential.
Manufacturing is not just about the production of machine parts but also the assembly of many parts into large systems that require skilled labor like welders, electricians, plumbers, pipe fitters, painters all working in fabrication of an entire structure of systems working together in a one piece assembly that gets trucked to a jobsite and installed. What robots can do that?
“Products are made to a price point. Durability is sacrificed for cost”
Now I am getting the picture. You are a bean counter. I have seen this mentality in action many times. Many times I have seen where the bean counter makes the decision to purchase a cheaper part only to find that the failure of that part cost the customer a lot of money in repairs.
Our society today is run by bean counters including the manufacturing sector and their decisions many times cost in production delays causing end users to delay projects and suffer construction delay fines. There is a lot of frustration in the construction industry because of product delays.
“The US made its standard of living by outproducing its competition”
This is bull. We had no competition from foreign sources except Japanese manufacturing of inferior products until globalization and the intentional buildup of Chinese 10 cent an hour slave labor manufacturing. After WW2 our wartime manufacturing capacity was turned over to public use for our own consumption. American engineers started manufacturing companies producing durable goods for our own use. We had our own mining that produced our own supply of metals so we were pretty much self sufficient. Our high schools had vocational education so by the time one graduated from high school they walked right in to good manufacturing jobs. Yes our standard of living went up and the average Joe could put a down payment on a house and an automobile.
But then something happened in Washington DC that turned the tide. Our politicians sold us out into the global markets and sent our jobs overseas in service to the multinational corporations. Just like they sold us out by creating administrative laws to circumscribe the constitution and facilitate the needs of the corporations in contract law that is not suited for the governance of the people. And then came the slew of carpet bagger lawyers to fleece the people.
The whole direction of the country went from the vocations to flooding the colleges with people not suited for it. The high school vocational system was scraped because the plan was to ship our jobs overseas.
Most people are not interested in becoming billionaires or even millionaires. They are satisfied with a simple life of activity in the many associations that tweak their interest.
You definitely seem to be a globalist, I am not, so I don’t share your views. You seem to think people have to compete with the world. I don’t. America is self sufficient why should it compete with the world. If these mega corporations were cut down in size as they should be there would be plenty of good paying jobs for everyone because the wealth created by production would stay in the communities like it happened before globalization. The wealth of the country would not be sitting in offshore banks in the bank accounts of these mega corporations.
“Wealth is obtained by competing”
Yes, but among ourselves, not the world. We have been shut out of that by the monopolies. Break these global corporations apart and watch the competition come back in this country.
People need to work. You put the blame in the wrong place my friend for why people don’t have a decent paying job. People have become tired of being used to make billionaires and having to conform to corporate policies. Bring back free trade and eliminate government regulations that serve the interest of monopolies and you will see a revival of wealth creation among the people.
Tbird..
We even shipped our factory equipment and tools to low wage countries. Just the buildings are left.
In most cases to countries with slave and child labor mentalities or socialized medical care retirement and even quality of life breaks and vacations but Americans were overpaid BULL SHIT !
TBird – you say:
“however safety wise they are death traps”. Car are safer than they have ever been, and it is not even close. You are correct re we will not see them in fifty years, for a lot of reasons. They are not built for that time frame. They are built for a specific cost, and they are built to current legislation.
“manufacture of durable goods like pumps, electric motors, compressors, appliances of all types, air conditioning/refrigeration units, and many products industrial, commercial, and residential.” What part of being built to the price point that consumers demand do you not understand? Consumers drive the durability issue.
“Now I am getting the picture. You are a bean counter.” I am a manufacturer, and have been for forty years. And I am very successful at it. You seem to lack the understanding that manufacturing is not for its own sake – it is to meet market demand. If I make a 100 year dishwasher – and I could – it would have no market. It would be priced out of the marketplace. Mfg does not create a market, it meets the market demand. If people wanted 100 year dishwashers, it would have them galore. The market wants cheap 7 year dishwashers, and so that is what is provided.
The US ran a trade surplus from WW2 up until around 1975, when the quality and inefficiency issues began to bite. US cars were shitheaps in 1975, due to a closed market. US steel manufacturers were extraordinarily inefficient due to a closed market. Global competition began to kick US ass.
How many jobs were shipped overseas? How could jobs be shipped overseas given that US manufacturing GDP has remained relatively unchanged? In round figures, almost half of all jobs were mfg in 1950. Today that would mean 80 million manufacturing jobs. But there are only around 10 million mfg jobs in the US today. Do you think 70 million jobs were shipped overseas? No. That did not happen. Mfg became much more efficient. Perhaps 2 million jobs went. Hell, let’s reach way out and say 4 million went. So mfg would have plummeted, even without any jobs lost overseas, from 80 million jobs down to 14 million. The jobs were not lost overseas – they were lost to automation. Mfg jobs are going to dry up even further. Tariffs or not, mfg is toast.
“America is self sufficient”. Umm, no it is not. Rare earths, etc, are needed. The US consumes 25% of the world’s resources. You do not believe that if it withdraws from world trade it can continue to do that, do you?
If the US cannot compete globally, then it will lose ground. Sticking its head in the sand is no way to go.
“Bring back free trade and eliminate government regulations that serve the interest of monopolies and you will see a revival of wealth creation among the people.” I agree with this, if it is combined with a slashing of the welfare state. The welfare state is a cancer that is preventing the US from competing as well as it should.
TBird – perhaps we are not so far different in our beliefs. But I do this mfg stuff for a living. And I know mfg is going the way of the buggy whip as far as being a major source of jobs. I also know how good manufacturing has become at producing quality items, which is different from producing durable items. For a good example, do a search on engine plant manufacture, and you will find videos of how engines can be made today – entire engines manufactured almost untouched by human hands.
Llpoh, that comment above is a shining example of why I usually read comments you’ve posted.
I don’t always agree with you, but by and large, you have first hand experience, success, and knowledge that I can see and relate to, in my own fields of mfg. work and experience. I respect your take on things, as you have a direct way of evaluating; usually with cold, hard truths.
I do think skilled trades is not a bad way to go, for young adults seeking opportunities for careers.
Some people are much better at working with things than large groups of people / customers.
i.e., skilled trades for the construction industry, vs. the manufacturing segment.
In what little area of Mfg that may thrive, perhaps a skill at learning automation / troubleshooting of the robotics aspect would be a great opportunity.
But, they’d better be at the top of their chosen field, to ensure they always have work.
Low skilled tradesmen are typically left behind, deservedly, for shoddy work ethic / performance.
Real world. Reality bites.
But the current demand for electricians, welders, pipe fitters, sheet metal workers, who make master or journeyman status will not fill quickly, as most young people want the clean, easy, sit-on-their-ass in front of a PC job that pays 6 figures.
Electrical and Mechanical Engineers of high caliber should do well.
Other promising fields of work is a subject for another day.
I’ve enjoyed the give and take between you and T-bird in this thread.
-It’s been a good one, to expose to a young man or woman in high school or considering a university or a trade school, wondering how to proceed in a very uncertain future.
Robots do not support local small businesses that support communities that support little leagues or pay property taxes and local taxes that support schools police forces fire departments . Working people with wages that offer a modest lifestyle did support all that . Note the continuous cry regarding lack of funding for all the public services . The debt bubble gamers started this progressive problem 40 to 50 years ago and now the results are in .
Some do fantastic with illegals cutting the lawn , replacing the roof and sidewalk as American society circles the drain .
Remember Llpoh our children inherent the mess left behind and an angry class that the real overpaid minions cannot and will not protect us or our children from can and will eventually rise up and then it will be “GAME OVER”!
We are close to that now the spark that will start a national forest fire is unforeseen but it’s out there smoldering !
I want to point out some things that have occurred in my lifetime.
Here are a few items that used to be made in the USA. The items that still are made in the USA tend to be out of monetary reach of the average individual.
Televisions
Radios
Computers
Cars (for the most part, they may be assembled here but the big dollar parts aren’t made in the USA).
Replacement parts for cars sold in after market part supplier locations
Tires
Steel
Clothes
Shoes
Furniture
Maritime shipping vessels
Airplanes (most parts made overseas)
Guitars
Dishwashing machines
Clothes washing machines
Clothes dryers
Telephones of all types
Refrigerators (my Kenmore fridge was assembled in the US from parts made in China.)
Air conditioners
Cameras (still and video)
Fans (ceiling and otherwise)
Heavy equipment (earth moving and such)
Bicycles
Motorcycles
What is the Hell is the US still making that requires automating? I am sure that a few electronics are probably still built in the US albeit from parts made overseas. I also known foreign companies build cars here to avoid tariffs. It is true their plants are very heavily automated. They have to be. The educational level of the people where the plants are generally located (MS, AL, TN and such) can’t support a non-automated environment workplace. I say this and I live in Tennessee. Memphis has courted many manufacturers. The reason they didn’t chose Memphis boiled down to the work force being basically untrainable. I saw this first hand at my last job. When I first started 6 years ago, the level of instruction to staff on the production line amounted to a reading comprehension on an eighth grade level. This on a production line dealing with computer hardware and software installation. Before I left in September of last year, I was writing instructions for production work on a 4th grade level. I had to presume the new hires didn’t have even fundamental computer skills to the point of instruction them on how to turn the system on step by step.
I agreed with posters here. There aren’t very many good manufacturing jobs in the US. They all left the US. Automation can only account for a certain percentage of the losses.
LLpoh is right about the advantage USA had for about 20 years after WW II. However, things have turned around 100% since about 1970. Unfair free trade, environmental regulations, unfair barriers to trade and one way tariffs are making economic globalization effects worse. Being a free trade nation in a protectionist world is stupid. It’s like taking a knife to a gunfight.
Overthecliff