About Me

My photo
Los Angeles, California, United States
The blog 'Breaking Bread' is for a civil general discussion, like you might have at the dinner table with guests. The posts 'Economics Without the B.S.' are intended for a general audience that wouldn't have to know the difference between a Phillips Curve, a Laffer Curve, or a Cole Hamels Curve. Vic Volpe was formally educated at Penn State and the University of Scranton, with major studies in History, Economics and Finance, and Business; and, is self-educated since by way of books and on-line university courses. His practical education came from sixty years of work experience in the blue-collar trades as well as a white-collar professional career -- a white-collar professional career in production and R&D. In his professional career and as a long-haul trucker, he has traveled throughout the lower forty-eight. From his professional career alone he has visited many manufacturing plants in the United States, Europe and China. He has lived in major metropolitan areas and very small towns in various parts of the United States. He served three years with the U.S. Army as an enlisted man, much of that time in Germany.

Monday, March 27, 2017

Manufacturing, Trade, and Automation

Manufacturing, Trade, and Automation


 Economics Without The B.S.**: 

[**  Double entendre intended.]

 Manufacturing employment and automation: Did NAFTA and China contribute to the decline in manufacturing jobs? Quick answer: NAFTA - No; China - Yes

If automation is taking manufacturing jobs then the productivity of manufacturing (output per worker, not the output per manufacturing sector) should be increasing as more automation takes over. But productivity peaked around 2003 and has mostly been in a downward trendline.

 During most of the 1990s, under NAFTA, jobs remain steady (around 17 million) while the trendline for productivity has a slight increase. In the late 1990s, after the financial crisis in Asia, the Asian countries decide to become net exporters and it has an effect on the U.S. economy. And in 2001 China gets international trade status with WTO and you see the decline in U.S. manufacturing jobs from approximately 16 million to 14 million jobs up to the Great Recession starting in December 2007 and then another loss of 2 million jobs during the Great Recession (through June 2009); and, most of the trendline for manufacturing productivity since 2001 is flatlined to declining.

https://fred.stlouisfed.org/graph/?g=d9Y5

 Industrial production (manufacturing output) and capacity utilization. Capacity Utilization of 75% to 80% is considered good; the 1960s, at over 90%, is the best peacetime performance in U.S. history.

Industrial Production growth is good each decade, 30% to 50%, from the 1960s to 2000; and, this is with employment steady at around 18 million in the workforce. After 2000 growth flatlines -- except for coming out of the recession of 2001 where it grows at 15% but only gets back to where we were in 2000. And keep in mind that duiring Bush's Administration we had two big tax cuts and the repatriation of U.S. corporate foreign profits back to the U.S. with little to show for the investment in our manufacturing sector.


https://fred.stlouisfed.org/graph/?g=d9ZM
Industrial Production and Manufacturing Jobs:

 https://fred.stlouisfed.org/graph/?g=dafA




Posted by at
Labels: , , , , , , ,

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)