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This was a good read, thanks. The high-level takeaway is the same we've been hearing for a while: U.S. manufacturing output is growing in value terms, but employing fewer and fewer people as more of the value is being produced by machines, and less by humans. But the case study elaborates some more specifics of what's going on.
I don't understand why people want to go back to the bad old days of early to mid 20th century labor. I suspect it's baby boomer nostalgia for a past that never actually existed in reality.
I don't think most people want to go back to mid-20th-century labor in particular. It's more a question of what people are going to be gainfully employed doing, if it's not the old things.

For example, one possible result of increased technology in manufacturing could've (in some hypothetical world) been steady employment but greatly increasing productivity, so e.g. the U.S. 2010 manufacturing sector employed the same share of the population as the U.S. 1960 manufacturing sector, but thanks to technology was vastly more productive, churning out lots more stuff per employee, with employees doing more interesting things than 1960s assembly-line drudgework.

That's one of the techno-utopian visions sometimes kicked around: for every job lost on an assembly line, a new job is created as robot technician. But instead the ratio has been more like, for every 3-4 jobs on an assembly line, a new job is created as a robot technician. At least, that's the case within the manufacturing sector; it's possible that the missing equivalent number of jobs are really being created elsewhere, in a more loosely related way, but it's hard to quantify.

If society can get the same productivity with ever fewer people, then it starts making sense to have a Guaranteed Minimum Income.

http://www.xamuel.com/ten-reasons-for-guaranteed-minimum-inc...

The notion of full employment is not necessarily good or realistic. Sooner or later, a hi-tech society is going to have to answer the existential question of "what to do with life?".

Low-tech societies can get away with answering it with "work!" because they truly need everyone to do that.

Point is: if productivity keeps increasing more and more, why is it such a God-given thing that the point of our lives should be to work? We need to start thinking about how to achieve personal fulfillment in a post-scarcity world.

That would work if the richest 1 % weren't accumulating all the wealth instead.
I more or less agree, and it's interesting that while it's now seen as a (very) "left" policy proposal, much of its historic support has been from people who are more associated with free-market economics. Various reasons, but they boil down to a mixture of negative and positive ones.

The negative ones are that it's better than the likely alternatives: Milton Friedman thought it was better and less distorting to just hand people one cash payment than deal with the huge mess of welfare, Section 8 housing, food stamps, unemployment benefits, medicaid, etc., etc. that the U.S. currently has. That's sort of the case here, in that just paying people a basic minimum income is probably less distorting than trying to adopt policies to force full employment (France-style policies that make it hard to fire people, protectionist trade tariffs, etc.). Arguably, it makes people more willing to accept major shakeups caused by markets if there's some minimum floor for what happens to people caught in transitions or left out of shifts; otherwise people are more likely to try to push back against the markets. (Actually that last point is why classic Marxists were against these kinds of things, because they thought it had the effect of sugar-coating the markets' effects, thereby making people less willing to revolt against them.)

Positive reasons include promoting entrepreneurship (provides a safety net making people, especially those not from middle-class-or-better families, more likely to take the risk of jumping from a stable job to start a business), and giving people more freedom to choose their associations, as opposed to feeling they need to cling to their ethnic group, religious group, or other such organization for quasi-welfare (e.g. many non-believing Mormons stay in the church because it provides a safety net). F.A. Hayek described that as a necessary part of moving towards a less tribalist/group-centric society: "The assurance of a certain minimum income for everyone, or a sort of floor below which nobody need fall even when he is unable to provide for himself, appears not only to be a wholly legitimate protection against a risk common to all, but a necessary part of the Great Society in which the individual no longer has specific claims on the members of the particular small group into which he was born."

Well, you used to be able to graduate from high school and get a job that could afford you a house and enough to provide for your family, and a pension you could retire comfortably on. I can certainly see the appeal there. Maybe a lot of the jobs were in factories and weren't so great, but what do the prospects look like now? It's not coming back of course, but I understand why people are nostalgic for that.
High school graduation actually meant something back then too though. Today it is no guarantee of even basic literacy and math skills, which is why the requirement of a college degree, of any sort, is so prevalent for jobs these days. Meanwhile, high school graduation rates have declined in the past few decades.

I think if people were still getting a 1970s era quality of education from K-12 schools the economic outlook for high school graduates would look a lot different.

Great article. I'm from the boonies of Tennessee and have seen the exact same thing.

The biggest change that I've seen is that working hard is no longer enough by itself. A few decades ago anyone in my small town who was willing to work hard could get a respectable factory job that provided a reasonable lifestyle. Anyone who couldn't make it to college would be alright if they were willing to put in the elbow grease. Many of my friends took that route.

Today that's no longer true. Companies today want a few high skill jobs rather than many low skill. Those factory jobs are gone and they're never coming back. It's rough.

>Today that's no longer true. Companies today want a few high skill jobs rather than many low skill.

While that is true, high skill doesn't necessarily mean a 4 year college education. Coming from a manufacturing background (engineer) I can assure you that good machinists are in high demand. Kids shouldn't be given the impression that shop-classes in high school are for "stupid people." Most people don't realize the demand for these kinds of jobs. Even good welders can make good money if the work is put in; the same cannot be said for all factory positions..

What I've read about welding, for example (http://www.nytimes.com/2009/06/24/business/24jobs.html), suggests that there's no good path to break in anymore: welders with 10+ years of experience are in high demand, while novice and intermediate welders aren't, mainly because the "easier" jobs can be done by machine these days. But how are you going to get 10 years of experience if there aren't jobs for welders with 4 years of experience?

And the pay even for the very highly skilled doesn't sound that great; the NY Times article linked above quoted a rate of $22/hr for a highly skilled welder, which is decent, but not particularly great for something that's considered highly skilled and has a 10-year skill ramp (works out to $44k/yr pre-tax, if you work fifty 40-hour weeks).

That article only scratches the surface. My background in manufacturing is specifically for a welding manufacturer. There are kids graduating from high school going right into weld school, then getting jobs dealing with nuclear applications and making $35+ an hour. Background checks are needed, and many of the 35+ year old guys have DUI's, failed drug tests and other offenses given they've had a longer timeframe to acquire them.

A good pipe welder can make much more than that, granted the conditions are treacherous where some of those pipelines go.

And the pay even for the very highly skilled doesn't sound that great;

Not sure what you mean, that puts them at the 70th percentile of personal income in the US. That rather sounds like highly paid professional to me.

In some ways of looking at it yes. And yet we just had this other thread about how software engineers making $100k are just getting by "ok", not even upper-middle-class...
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$100k in NYC or SF is not going to get you much.
Well, it'll get you considerably more than the majority of people living in NYC or SF have. =]
Our culture looks down upon blue-collar jobs such as plumbers, electricians and other trade-skill type jobs. Yet these jobs are becoming harder and harder to fill and pay is ever increasing. Don't believe me? Hire an independent plumber and/or electrician for a few days worth of work and see how much it cost you.

Unfortunately, there is a stigma with those jobs so people borrow hundreds of thousands of dollars for a college education, then go to work making $15/hour while Joe the Plumber goes to a trade school and earns $60-$75k/year right out of school.

This is very regional. Hiring a plumber to fix your plumbing is not how those guys get paid, but they do appreciate the money. The steady work for them is new housing developments, which if you are in Nevada, Florida, Arizona and most of the southern US is at excess capacity.

I have friend who are master electricians doing stage and club lighting, cable and satellite installations, etc. Before 2008 they were making $150k+ annually from the construction market, now its anything to keep the lights on at home.

Did anyone else feel a bit uneasy with the racist undertone? The author seemed to dismiss out of hand that "Chinese or Mexicans" could do any kind of skilled labour. There is a fair amount of high tech work done in Asia these days.
I didn't get a sense of any racist undertone in this article (nor was there any in the Planet Money podcast about this either). Certainly the author could have gone into more detail as to why the company doesn't feel that they can find enough skilled labor in China or Mexico to make it worth their while to move production there, but that's not the point of the article, so why focus on it?
The adversarial tone of international vs. domestic manufacturing was probably due to compassion for the "Maddies" of the US. True, there seemed to be no care for the "Maddies" outside of the US giving it an "us vs. them" feel. Not necessarily racist, but overly patriotic perhaps?

If anything this phrase caused me a furrowing of the brow "the Gildemeisters and their ilk".

The public perception curve for developing Asian countries in America goes something like this:

Ridicule -> Dismissal -> Contempt -> Acceptance -> Reverence

Japan, South Korea, Taiwan, Singapore, Thailand, China, all fall on different points on that progression, Japan being the most far along of course.

JP is well into 'reverence', SK and Taiwan are firmly at the 'acceptance' phase, China is still somewhere between 'dismissal' and 'contempt'. Expect it to be solidly in 'contempt' by 2015-2020.

Whether or not they can shed the "sure they're smart but not creative" label depends on how amenable their popular culture and cuisine is to American tastes. Patents filed, product innovations, or pure research conducted is not taken into consideration.

I didn't feel any kind of racism in this article. There were some points that may have used a little more explanation, but definitely no issue on racism.
This show how psychologists can torture a nerd toward the end: http://www.noob.us/humor/the-office-dwight-faces-nerd-tortur...

When you look back in time, more and more programmers knew assembly. In 1992, I got my 486 and learned the CPU instruction timings. (I used VAX asm at work)

In school we programmed motorola 6800 8-bit CPUs in assembly and studied how to make embedded designs, like general motor car stuff.

On the 6800 you did not have floats, so you did scaled fixed-point arithmetic.

On the 486, the float instructions took 30 cycles and the int 3. Therefore, most programmers over 40 grew-up in a totally different world. Now, floats are about equal and it's practically impossible to judge timings. Trust me -- most of the osdev people have false impressions from the past. James, is smart, though.

It was shocking when I did my compiler and discovered improving my code had no effect because it was all getting converted to RISC and scheduled by the cpu anyway.

God says... C:\LoseThos\www.losethos.com\text\WEALTH.TXT

liberty to sell his whole crop to a corn merchant as fast as he could thresh it out, his whole capital might have returned immediately to the land, and have been employed in buying more cattle, and hiring more servants, in order to improve and cultivate it better. But by being obliged to sell his corn by retail, he was obliged to keep a great part of his capital in his granaries and stack-yard through the year, and could not therefore cultivate so well as with the same capital he might otherwise ha

Towards the end the article talks about multiple factors that are constantly in flux regarding the flow of jobs but how overall they've been moving in the direction of non-American manufacturing jobs. I've seen a few articles recently about this flux moving back in the opposite direction[1][2][3], but this article (for all of its interesting info and stories) doesn't address those signs at all. Hopefully soon we will see an article from somewhere addressing if these anecdotes are negligible or part of a real trend.

[1] http://rockcenter.msnbc.msn.com/_news/2012/01/14/10156162-ma...

[2] http://www.economist.com/node/18682182

[3] http://www.thenewamerican.com/economy/commentary-mainmenu-43...

Brief aside, what is the name for this type of writing? A longish piece in a magazine illustrated with personal stories interspersed with facts about how it relates to the bigger picture and general trends? Editorial?
I'd be tempted to call it Gladwellian.
John McPhee did it long before him, and still does it better.
It's just classic long-form essay writing.
Articles like this make me wonder why more manufacturing isn't robotocised and pulled back to domestic shores. Why are blue jeans destined for Western markets made in China by hordes of human automatons? Couldn't stuff like this be made locally in almost-fully automated factories instead?

China, India, Vietnam, etc. have a significant dependence upon cheap, semi-skilled labour. Surely the future is uncertain for these countries as programmable robots become the norm and there is little reason to outsource most types of manufacturing.

Even after shipping costs humans are cheaper than robots, plain and simple.
Right now perhaps, but not in the future when this technology becomes commodotised, as all technology does.
Transport is subsidized by government, especially through energy subsidy.
Interesting!

Can anyone point to/recommend other articles or books on the topic of machinery & computers replacing human workers? I'm very interested in this subject

Good article. Nothing unexpected for me but a good, calm summary of the matter. I appreciated the distinct lack of "us vs them" jingoism - it comes down to the numbers, nothing more.

One thing that bothered me was the attitude of "Maddie", though, towards her lot in life. I've seen it before and it baffles me:

> “If you don’t know jack about computers and electronics, then you don’t have anything in this life anymore. One day, they’re not going to need people; the machines will take over. People like me, we’re not going to be around forever.”

I just cannot fathom this blithe indifference to her fate, and this assumption that, as someone who doesn't "know jack about computers and electronics" she is basically doomed. Why doesn't she instead feel like she might want to start reading up on these critical topics? The article doesn't paint her as lazy or unwilling to learn. It just doesn't seem to occur to her, for whatever reason, that the option of self-study is open to her. I can't figure it out.

I was irked by her insisting how smart she is at the outset of the article. In my experience, people who think this don't see the need to learn anything new, or to change themselves in any way because they're just fine the way they are. All I can think is, Well, enjoy that smartness on your way to the dustbin of history.
Hm. I did find that bemusing but am reluctant to jump to conclusions, given the format. Who knows what the context was? Perhaps it was said defensively by someone somewhat ashamed of their modest employment? I can certainly imagine a 22yo girl saying "I know I work in a factory, but I'm smart .. really ..."

Same with the claim to be a redneck. Said with genuine pride I would find that pretty offputting (and there are certainly people like that around). But said as a joke it wouldn't be bad at all.

Not trying to disagree. Her later quote, the one I copied, doesn't inspire hope. But reading too much into out-of-context quotes is fraught with dangers...

Psychology is complicated. As another example, a lot of Hackers are probably at least somewhat aware that learning some marketing and self-promotion skills would massively improve their quality of life, yet will make endless excuses as to why they can't/won't.
Some people I think could read up, at least on some aspects, but I don't think it's equally easy for everyone to learn all topics. If we woke up in a world tomorrow where technical skills were not highly in demand, but, say, the two main growth sectors involved writing and music, how many of today's Google employees would be able to successfully retrain as novelists, journalists, violinists, poets, historians, and editors? My guess is some would and some wouldn't; and a number would need significant time to do so, and/or would end up as only mediocre employees in their new occupation.

That's how I feel with computers, anyway, that I've in effect pulled a lucky straw: I've been interested in and good at computers since I was like 8, and it turns out they pay. If the money was elsewhere, I'm not sure how easily I'd be able to switch. Likewise, I'm not sure how easy it'd be for an adult who was never fascinated with and adept at technology to go the other way, and "become a techie" through self-study, purely because they think it's important/lucrative, as opposed to because they have the sort of interest/drive/skill that most techies have.

Or put differently, I don't think everyone is the same or perfectly malleable; not necessarily due to genetics, but at least by the time they reach adulthood people have different skills/proclivities and are more or less adept at learning certain things. Since the universe isn't aligned in some cosmically fair manner, some people's skills/interests align with what's currently in demand, and other people's don't, which puts the people out of alignment in a more difficult place, like me in an age where being court poet, painter, or musician was the main path for middle-class kids to advance, and engineering was seen as a more working-class endeavor.

I won't deny genetic predisposition exists. You can have your 10,000 hours and what not but some people are just better than others at $task. I remember a high school friend of mine who, after hundreds or thousands of hours of guitar practise, still could not play by ear, something I could do at age five. Yes, there are differences.

But I think a great many things can be learned. I actually disagree that all those Google engineers couldn't re-educate, should they have to. They would just have to choose carefully their new vocation.

You have (perhaps inadvertently) given a great example in your list of future Google employee vocations:

> novelists, journalists, violinists, poets, historians, and editors

Think about these careers for a second.

  - novelist: writing skill, internal subject, long term
  - journalist: writing skill, external subject, short term
  - violinist: focus on repetition and incremental improvement
  - poets: writing skill, internal subject, taste
  - historian: external subject,long term
  - editor: writing skill, external subject, taste
Do you see what I'm getting at? They're all so different. And I kind of find myself "choosing" one of them myself (I'm a professional programmer).

I think intelligent people tend to be able to bend their mind to whatever purpose they desire, with enough effort. Sure, a bit of genetic predisposition helps, but that's just tweaking the dials. You can go in the general direction just with intellect and effort.

And I'd wager that the reason you were interested in computers since age 8 was simply because you were exposed to them. If your Dad had been a typesetter for the NYT, could things have turned out differently?

Actually there is a demand for high skilled trades. The problem is most of the not so academically gifted kids want to do useless college degrees instead of learning a trade.

I think what US need is a german style vocational education system

This is fascinating:

Second, Maddie is cheaper than a machine. It would be easy to buy a robotic arm that could take injector bodies and caps from a tray and place them precisely in a laser welder. Yet Standard would have to invest about $100,000 on the arm and a conveyance machine to bring parts to the welder and send them on to the next station. As is common in factories, Standard invests only in machinery that will earn back its cost within two years. For Tony, it’s simple: Maddie makes less in two years than the machine would cost, so her job is safe—for now. If the robotic machines become a little cheaper, or if demand for fuel injectors goes up and Standard starts running three shifts, then investing in those robots might make sense.

I think this is why there are a lot of manufacturing jobs in China, Chinese workers are much cheaper then machines which could also do the same job... for now.

The "for now" is true for all kinds of jobs and kind of unsettling.