Reviving American Manufacturing

Contrary to myth, the USA is still a major manufacturing power. But the factory has changed radically.

Contrary to myth, the USA is still a major manufacturing power. But the factory has changed radically, with the need for unskilled workers all but vanishing.

Last month’s Atlantic has a long feature highlighting the case of Standard Motor Products and two of the workers in its Greenville, South Carolina plant.

I had come to Greenville to better understand what, exactly, is happening to manufacturing in the United States, and what the future holds for people like Maddie—people who still make physical things for a living and, more broadly, people (as many as 40 million adults in the U.S.) who lack higher education, but are striving for a middle-class life. We do still make things here, even though many people don’t believe me when I tell them that. Depending on which stats you believe, the United States is either the No. 1 or No. 2 manufacturer in the world (China may have surpassed us in the past year or two). Whatever the country’s current rank, its manufacturing output continues to grow strongly; in the past decade alone, output from American factories, adjusted for inflation, has risen by a third.

Yet the success of American manufacturers has come at a cost. Factories have replaced millions of workers with machines.

That much, I knew. I was also vaguely aware of this: “far fewer people, far more high-tech machines, and entirely different demands on the workers who remain.” That is, I understood that American manufacturing was more machine-based and high tech; I didn’t understand how much the jobs of those people who remained had changed.

Why is anything made in the United States? Why would any manufacturing company pay American wages when it could hire someone in China or Mexico much more cheaply?

I came to understand this much better when I learned how Standard makes fuel injectors, the part that Maddie works on. Like so many parts of the modern car engine, the fuel injector seems mundane until you sit down with an engineer who can explain how amazing it truly is.

[A longish discussion about how complicated modern automotive fuel injectors are.]

Luke Hutchins is one of Standard’s newest skilled machinists. He is somewhat shy and talks quietly, but when you listen closely, you realize he’s constantly making wry, self-deprecating observations. He’s 27, skinny in his dark-blue jacket and jeans. When he was in his teens, his parents told him, for reasons he doesn’t remember, that he should become a dentist. He spent a semester and a half studying biology and chemistry in a four-year college and decided it wasn’t for him; he didn’t particularly care for teeth, and he wanted to do something that would earn him money right away. He transferred to Spartanburg Community College hoping to study radiography, like his mother, but that class was full. A friend of a friend told him that you could make more than $30 an hour if you knew how to run factory machines, so he enrolled in the Machine Tool Technology program.

At Spartanburg, he studied math—a lot of math. “I’m very good at math,” he says. “I’m not going to lie to you. I got formulas written down in my head.” He studied algebra, trigonometry, and calculus. “If you know calculus, you definitely can be a machine operator or programmer.” He was quite good at the programming language commonly used in manufacturing machines all over the country, and had a facility for three-dimensional visualization—seeing, in your mind, what’s happening inside the machine—a skill, probably innate, that is required for any great operator. It was a two-year program, but Luke was the only student with no factory experience or vocational school, so he spent two summers taking extra classes to catch up.

[…]

In many ways, Luke personifies the dramatic shift in the U.S. industrial labor market. Before the rise of computer-run machines, factories needed people at every step of production, from the most routine to the most complex. The Gildemeister, for example, automatically performs a series of operations that previously would have required several machines—each with its own operator. It’s relatively easy to train a newcomer to run a simple, single-step machine. Newcomers with no training could start out working the simplest and then gradually learn others. Eventually, with that on-the-job training, some workers could become higher-paid supervisors, overseeing the entire operation. This kind of knowledge could be acquired only on the job; few people went to school to learn how to work in a factory.

Today, the Gildemeisters and their ilk eliminate the need for many of those machines and, therefore, the workers who ran them. Skilled workers now are required only to do what computers can’t do (at least not yet): use their human judgment. This change is evident in the layout of a factory. In the pre-computer age, machines were laid out in long rows, each machine tended constantly by one worker who was considered skilled if he knew the temperament of his one, ornery ward. There was a quality-assurance department, typically in a lab off the factory floor, whose workers occasionally checked to make sure the machinists were doing things right. At Standard, today, as at most U.S. factories, machines are laid out in cells. One skilled operator, like Luke, oversees several machines, performing on-the-spot quality checks and making appropriate adjustments as needed.

The combination of skilled labor and complex machines gives American factories a big advantage in manufacturing not only precision products, but also those that are made in small batches, as is the case with many fuel injectors. Luke can quickly alter the program in a Gildemeister’s computer to switch from making one kind of injector to another. Standard makes injectors and other parts for thousands of different makes and models of car, fabricating and shipping in small batches; Luke sometimes needs to switch the type of product he’s making several times in a shift. Factories in China, by contrast, tend to focus on long runs of single products, with far less frequent changeovers.

It’s no surprise, then, that Standard makes injectors in the U.S. and employs high-skilled workers, like Luke. It seems fairly likely that Luke will have a job for a long time, and will continue to make a decent wage. People with advanced skills like Luke are more important than ever to American manufacturing.

But why does Maddie have a job? In fact, more than half of the workers on the factory floor in Greenville are, like Maddie, classified as unskilled. On average, they make about 10 times as much as their Chinese counterparts. What accounts for that?

[…]

“Unskilled worker,” [factory manager Tony Scalzitti] narrates, “can train in a short amount of time. The machine controls the quality of the part.”

“High-skill worker,” on the other hand, “can set up machines and make a variety of small adjustments; they use their judgment to assure product quality.”

To show me the difference between the two, Tony takes me from Luke’s station through an air lock and into Standard’s bright-white clean room—about a quarter the size of the dirtier, louder factory floor—where dozens of people in booties, hairnets, and smocks, most of them women, stand at a series of workstations.

[…]

Take Maddie’s station. She runs the laser welding machine, which sounds difficult and dangerous, but is neither. The laser welder is tiny, more like a cigarette lighter than like something you might aim at a Klingon. Maddie receives a tray of sealed injector interiors, and her job is to weld on a cap. The machine looks a little like a microscope; she puts the injector body in a hole in the base, and the cap in a clamp where the microscope lens would be. The entire machine—like most machines in the clean room—sits inside a large metal-and-plexiglass box with sensors to make sure that Maddie removes her hands from the machine before it runs. Once Maddie inserts the two parts and removes her hands, a protective screen comes down, and a computer program tells the machine to bring the cap and body together, fire its tiny beam, and rotate the part to create a perfect seal. The process takes a few seconds. Maddie then retrieves the part and puts it into another simple machine, which runs a test to make sure the weld created a full seal. If Maddie sees a green light, the part is sent on to the next station; if she sees a red or yellow light, the part failed and Maddie calls one of the skilled techs, who will troubleshoot and, if necessary, fix the welding machine

The last time I visited the factory, Maddie was training a new worker. Teaching her to operate the machine took just under two minutes. Maddie then spent about 25 minutes showing her the various instructions Standard engineers have prepared to make certain that the machine operator doesn’t need to use her own judgment. “Always check your sheets,” Maddie says.

By the end of the day, the trainee will be as proficient at the laser welder as Maddie. This is why all assembly workers have roughly the same pay grade—known as Level 1—and are seen by management as largely interchangeable and fairly easy to replace. A Level 1 worker makes about $13 an hour, which is a little more than the average wage in this part of the country. The next category, Level 2, is defined by Standard as a worker who knows the machines well enough to set up the equipment and adjust it when things go wrong. The skilled machinists like Luke are Level 2s, and make about 50 percent more than Maddie does.

For Maddie to achieve her dreams—to own her own home, to take her family on vacation to the coast, to have enough saved up so her children can go to college—she’d need to become one of the advanced Level 2s. A decade ago, a smart, hard-working Level 1 might have persuaded management to provide on-the-job training in Level-2 skills. But these days, the gap between a Level 1 and a 2 is so wide that it doesn’t make financial sense for Standard to spend years training someone who might not be able to pick up the skills or might take that training to a competing factory.

It feels cruel to point out all the Level-2 concepts Maddie doesn’t know, although Maddie is quite open about these shortcomings. She doesn’t know the computer-programming language that runs the machines she operates; in fact, she was surprised to learn they are run by a specialized computer language. She doesn’t know trigonometry or calculus, and she’s never studied the properties of cutting tools or metals. She doesn’t know how to maintain a tolerance of 0.25 microns, or what tolerance means in this context, or what a micron is.

As generous as that excerpt is, the story is much, much longer and worth reading.

But the cases of Luke and Maddie really stuck out. Maddie, writer Adam Davidson acknowledges, is quite bright. She’s hard working and friendly. She graduated high school with honors and expected to go on to college and get a good job. Alas, she got pregnant as a high school senior. You know the rest: “The father and Maddie didn’t stay together after the birth, and Maddie couldn’t afford to pay for day care while she went to college, so she gave up on school and eventually got the best sort of job available to high-school graduates in the Greenville area: factory work.”

As a result, she’s in a job that, quite literally, a reasonably intelligent person can learn to do as well as it can be done in one eight hour shift. And the gap between her Level 1 job and Luke’s Level 2 job is so vast that it’s hard to imagine her ever bridging it. Oh: it will eventually be cheaper to have a robot do her job. And she knows it.

Tony explains that Maddie has a job for two reasons. First, when it comes to making fuel injectors, the company saves money and minimizes product damage by having both the precision and non-precision work done in the same place. Even if Mexican or Chinese workers could do Maddie’s job more cheaply, shipping fragile, half-finished parts to another country for processing would make no sense. 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.

“What worries people in factories is electronics, robots,” she tells 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.”

This isn’t a matter of Tony and the high muckety-mucks at Standard screwing over their workers to keep a little extra for themselves. It’s just the brutal realities of a very competitive industry–supplying aftermarket car parts. If Standard doesn’t stay as efficient as possible, someone else will start undercutting their prices and put them out of business.

What’s even more interesting to me than the Maddies of the world–which, again, I at least understood as a vague reality–are the Lukes. He’s probably in the 95th percentile in mathematical smarts, has invested several years in acquiring skills, and will never stop having to acquire more highly complex knowledge. And he enjoys that fact, finding it challenging and rewarding. But despite all that, his job still sounds incredibly tedious and repetitive.

Every five minutes or so, Luke takes a finished part to the testing station—a small table with a dozen sets of calipers and other precision testing tools—to make sure the machine is cutting “on spec,” or matching the requirements of the run. Standard’s rules call for a random part check at least once an hour. “I don’t wait the whole hour before I check another part,” Luke says. “That’s stupid. You could be running scrap for the whole hour.”

Luke says that on a typical shift, he has to adjust the machine about 20 times to keep it on spec.

Because he’s conscientious, he’s actually working much harder than he’s expected to. Even so, he’s basically just measuring things. And making 20 minute adjustments over a 12-hour period. He works three of those a week, 6 pm to 6 am Friday, Saturday, and Sunday. At $20 an hour.

For the United States to rebuild a large, manufacturing based middle class, we’ll need a whole lot of Lukes. In all honestly, I don’t know how we’ll find or create them. Even if, say, a quarter of us are capable of becoming proficient in calculus–and I’d say that’s wildly high–what percentage of those with that capacity will have Luke’s tolerance for tedium and be self-driven to keep learning? Further, even if we could make a few dozen million more Lukes would we be able to create enough jobs for them? And why won’t the Indians and Chinese be able to create them faster and cheaper?

Manufacturing collage by Shutterstock.

FILED UNDER: *FEATURED, Economics and Business
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. superdestroyer says:

    You are too close to being a “thought criminal” with this post.

    In modern PC America one must believe that everyone is capable of learning calculus is we just spent more money on education, if we had a bigger safety net, and we were a fairer society.

    Stating that not everyone can learn calculus (or molecular biology or thermodynamics) is not allowed anymore and governments at all levels have to be based upon the assumption that everyone will learn calculus is enough resources are spent on the issue.

    Of course, it is really hard to believe that the government believes that the U.S. can have a robust high tech manufacturing base when the same government states as official policy that the U.S. is not competent enough to build a pipeline, power plant, transmission line, drilling platform, waste disposal facility, or even a high-speed train.

  2. Good to see this getting wider exposure. Adam Davidson is a Planet Money contributor and did an audio version of his travels … here. I climbed a hill in the park behind my house and listened to that one … it’s a nice way to digest such stories.

    This is probably also why I saw the Pepsi story in a pattern rather than as an isolated “greed” story. No easy answers though …

  3. @superdestroyer:

    Well, I say in my comment “no easy answers.” You did find an easy way, with paranoia and general crazy.

    Heh. Funny to see “PC America” invoked and invented in one fell swoop. There aren’t actually people who believe “everyone is capable of learning calculus [if] we just spent more money on education.” You just make them up as a preferred reality.

    No, the real and harder question is what you do with a cohort who is busy texting in math class, when they do hit the jobs market and the “machine competition.”

  4. Brummagem Joe says:

    Manufacturing in the US is still immense in absolute terms but now represents only about 11 of GDP which is the same as it is in the UK which has broadly similar economic model. The obverse of this is Germany where manufacturing still constitutes about 22% of GDP and is full of both skilled workers like Luke and semi skilled ones who work on assembly lines making autos, combines, front end loaders, toys, refrigerators, furniture, fuel systems, etc etc. Germany is competing in exactly the same world we are but in terms of manufacturing jobs is doing twice as well. Why is this? Well it certainly isn’t because most of the workers in German manufacturing have higher standards of morality or understand calculus although they do have an exceptionally well trained and motivated workforce. Why has this happened do you think? Until Jim and others of a similar mindset stop focussing on outcomes and start to ponder the differences in the American and German economic model they are not going to find an answer because this is where it all starts. And btw I spent 15 years involved in the management of companies involved in producing somewhat similar products to Standard.

  5. Pete says:

    Has anyone attempted to portray what this country’s economy will look like 4 generations from now? Where will the people with the “enlarged heads” live? Will there be mass emigration of the “small heads?” Will there be mass emigration of the “enlarged heads?” Will our soldiers be “enlarged heads” sporting fanny pack joystick weapons launching stations? I won’t be around to witness it, so I would love to get any type of realistic glimpse into that future from sane and prescient sources.

  6. James Joyner says:

    @Brummagem Joe: I don’t know that Germany is replicable anywhere else, much less here. For one thing, it would require a massive cultural shift to overhaul our secondary educational system to incorporate rigorous tracking and shunt most students off to a vocational-technical track quite early in life. I don’t see how that happens. Secondarily, I think the shift from stockholder capitalism to stakeholder capitalism–or a corporatist model–would be a hard sell here. And, frankly, I’m not sure Germany could get away with that without the cushion provided by the EU trade area since most of the subsidization violates WTO.

  7. john personna says:

    @James Joyner:

    For one thing, it would require a massive cultural shift to overhaul our secondary educational system to incorporate rigorous tracking and shunt most students off to a vocational-technical track quite early in life. I don’t see how that happens.

    Who knows how the “hack education” movement shakes out?

    I think we can see formal systems losing in general, and we certainly see an ad-hoc vocational system in the maker movement.

    Why was the kid with the marshmallow gun at the Whitehouse? Because he built it, and more than that, understood it.

  8. steve says:

    I was in a class of five that were the first to study calculus in my high school in 1970 (about 1200 in senior class). Now, if you want to get into a top level university, you need to take AP calculus. Kids who are aiming a bit lower, nearly all take regular calculus. Many kids study calculus at a local college. I think it very likely that 20%-25% of our kids could take calculus and do it fairly well.

    Steve

  9. Brummagem Joe says:

    @James Joyner:

    secondary educational system to incorporate rigorous tracking and shunt most students off to a vocational-technical track quite early in life.

    To start with this characterisation of the German higher ed system is grotesque (and the WTO claim is simply not true). It doesn’t shunt people off into vocational training but it does recognise that not all students are not going to end up as securities lawyers in Frankfurt and provides an avenue of vocational training for those who only graduate with a high school diploma to acquire skills and education that can be used to obtain well paying jobs in a manufacturing sector that is still twice the size of ours in relative terms. What your story is all about is the collapse of job opportunities in the US for those who only have a high school diploma. Your rather blinkered response personifies the refusal to examine causes rather than effects.

  10. JKB says:

    Well, to follow Germany would definitely mean giving up the emphasis in American education on becoming an academic and embrace the German system of incorporating manual training. Not directly vocational at first but integrating the using of the hands to produce along with the verbal and written. But as we see, any mention of that brings out the vested interest in useless knowledge or as it is politely known, liberal arts decrying the need for intellectual study at the detriment of actually being able to build something. The majority of our engineering schools don’t have hands-on training in actual physical output producing graduates who design things that can’t be built.

    And this isn’t new. I remember a line from the 1960s movie ‘Ice Station Zebra’. In explaining the whole expedition, Patrck McGoohan explains to Rock Hudson, “The Russians put our (British) camera made by *our* German scientists and your film made by *your* German scientists into their satellite made by *their* German scientists. “

  11. john personna says:

    @steve:

    The calculus thing was kind of a tangent, but to leverage off it, I read an interesting piece about the Stanford Prof who ran that massive online AI course last year. It really important to read, IMO.

    Here is a bit that relates to “take” and “pass:”

    Just a couple of datapoints from Thrun’s talk: there were more students in his course from Lithuania alone than there are students at Stanford altogether. There were students in Afghanistan, exfiltrating war zones to grab an hour of connectivity to finish the homework assignments. There were single mothers keeping the faith and staying with the course even as their families were being hit by tragedy. And when it finished, thousands of students around the world were educated and inspired. Some 248 of them, in total, got a perfect score: they never got a single question wrong, over the entire course of the class. All 248 took the course online; not one was enrolled at Stanford.

    Thrun was eloquent on the subject of how he realized that he had been running “weeder” classes, designed to be tough and make students fail and make himself, the professor, look good. Going forwards, he said, he wanted to learn from Khan Academy and build courses designed to make as many students as possible succeed — by revisiting classes and tests as many times as necessary until they really master the material.

    I’ve got to admit I bought the “weeder” effect as a positive. But no, Thrun’s right that this is one of the things technology changes.

    You don’t need to take calculus at a particular age, and you don’t need to pass it in a particular span.

    (FWIW, my high school was experimenting with independent and self-paced calculus in the 70’s. When I got to college I discovered I had the 1st two college-level semesters down.)

  12. john personna says:

    I had a sudden thought … remember that thread we had a few days ago about “what have you forgotten since college?” It strikes me that it was completely the wrong thing to ask. We should have said “what was the last thing you learned, in an unstructured environment?”

    A year ago I learned Android programming, and then kind of left it, been there done that. I moved on to lightweight backpacking, barefoot running, Indian cooking ….

    This is an amazing age. Ask the right question.

  13. Brummagem Joe says:

    The reason I took Germany as an example is because they and we are at either ends of the consensus on how a neo liberal economic model should work. And when it comes down to measuring the relative effectiveness of the two approaches if your criteria is the size of your manufacturing sector and it’s effectiveness in creating well paying jobs and hence economic security amongst the working and middle class it’s a no brainer. The so called German ordoliberalism which seeks to maximise all the productive assets of the country wins hands down. And without understanding this and at least a shift in the German direction this problem is going to get worse and people like JJ will continue to wring their hands and say things like “For the United States to rebuild a large, manufacturing based middle class, we’ll need a whole lot of Lukes. In all honestly, I don’t know how we’ll find or create them.”

  14. James Joyner says:

    @Brummagem Joe: I actually think the German model, with tweaks, is right. But, unless it’s changed radically since my last experience with it–and it may have, my experience is sorely dated–they make a hard cut after 4th grade, essentially eliminating most students from college track. Starting with 5th grade, there were 2 or 3 tracks and then another cut later. Only the very most promises got to go on to Gymnasium and, if they succeeded there, to University. Where they’d go free to the best school for which they could qualify.

    Americans wouldn’t stand for something like that, even though it’s more efficient. For myself, I’d support something very much like it, albeit with multiple re-entry points for those who got their act together/had the light turn on later in life. Including a later-life chance to go to JuCo and earn one’s way into a four-year school.

  15. john personna says:

    @James Joyner:

    I think Germany’s education system, circa 2000, beat America’s education system of the same vintage. You just named though, why we won’t have that German system ever in this country.

    On the other hand, we have a real shot at a better 2025 system. The new ad-hoc innovation, decentralization goes hand in hand with our distrust of national initiatives. I mean, our right is ready to disband the Department of Education. That isn’t on the German map, is it?

    Luckily the new dynamic favors small and innovative players. Kahn succeeded as one guy, and as much as “education conservatives” would like skip over his accomplishment, what he did was major and will shake out for decades.

  16. john personna says:

    Shorter: There won’t be an “American system,” unless it is defined as a proliferation of parallel tracks, and we will be better for that.

  17. Brummagem Joe says:

    @James Joyner:

    Americans wouldn’t stand for something like that, even though it’s more efficient.

    So they stream pupils according to ability. Not a totally uknown concept in the US ed system surely although you’re right about a general preference for blurring differences.Your “shunting” was ridiculous as you’re implicity admitting. The whole point here is that education is only one part of the jigsaw. Rebuilding the American middle class is never going be dependant on more Lukes but on a major paradigm shift in our ideas about economic management.

  18. Drew says:

    Interesting essay, James. And some interesting commentary. One thing that did jump out at me is the focus on labor. I think I’m correct in saying I’m the single resident private equity guy here, so I’d like to make sure capital is not ignored, because without investment you can forget about all the rest.

    Despite all the usual BS that gets posted, capital providers are not “greedy” with some preordained desire to move the manufacturing footprint overseas. That’s a real hassle. In fact, it’s coming back in a significant way. But capital moved because its mobile, more mobile than labor, and competitive pressures dictated it for survival.

    That said, my firm, and I’m the number 2 partner, focuses only on investment in manufacturing companies. They are primarily family owned businesses that have not really been optimized for any number of reasons and we shore up management, invest in product development and marketing, improve systems etc etc. The companies come out bigger better and stronger…….and usually with more employees.

    Literally two weeks ago we introduced two new products at one of our companies that will provide a 15-20% energy saving to users, and will increase our direct labor workforce by about 12%. It took about a years worth of investment in time, and over a million bucks. And for people who actually understand manufacturing – if you are sitting down – the company is in Massachusetts. Effing Massachusetts. The product has nationwide scope of application. That’s how you do it. Energy efficiency doesn’t come from cramming uneconomical cars down people’s throats, or refusing to use available natural resources. And the manufacturing footprint grows. This is going on all over the US if we would just get out of the way.

    I’m very sympathetic to all the notions of labor bifurcation and nurture at critical junctures in careers, but people need to remember that without capital it’s game over. Woudth that our current administration have a clue about that.

  19. James Joyner says:

    @Brummagem Joe: We’re never going to have a Germanic attitude toward workers. We’re a giant, continental power with a mishmash of cultures and races that’s constantly morphing. There is no sense of Americans as Ein Volk*, and therefore no similar degree of loyalty across social classes.

    It’s not just that American business owners don’t feel any obligation to American worker bees but that American worker bees don’t feel any loyalty to one another. Once Detroit quit making the kind of cars Americans wanted to buy, we didn’t hesitate to start buying Japanese. My guess is that the trend included people living in Detroit but not employed in the auto industry.

    _____________
    *Strip away any Nazi allusions here, excepting perhaps that this cultural trait made Hitler’s propaganda more effective.

  20. JKB says:

    For America to adopt the German streaming system would mean undoing the entire ‘progressive’ project from the 1960s on. It would mean, not mainstreaming the special ed kids. It would mean sorting that could very well end up not ‘diverse’. For one thing, given the efforts to limit Asian enrollment in many colleges, we could expect a very Asian looking college track. Given we can’t even get them to give up the race preferences and the finger on the scale for some minorities, how would you expect such sorting to work?

  21. Drew says:

    It’s not just that American business owners don’t feel any obligation to American worker bees but that American worker bees don’t feel any loyalty to one another. Once Detroit quit making the kind of cars Americans wanted to buy, we didn’t hesitate to start buying Japanese. My guess is that the trend included people living in Detroit but not employed in the auto industry.

    This is flat damned……correct. In addition, people in the auto industry started buying Japanese. As did steel company workers. They werent going to purchase crap. And don’t forget, a worker will quit an employer in a heartbeat for a few sheckles. This is a two way, if cultural, street.

  22. Brummagem Joe says:

    @James Joyner:

    *Strip away any Nazi allusions here, excepting perhaps that this cultural trait made Hitler’s propaganda more effective.

    You just lost the argument Jim with the cartoonish Godwin Law style allusions. No one says we can exactly replicate the German model for a variety of reasons. It’s a matter of degree. Do we move more in their direction and become more successful at creating the same sort of opportunities for the middle class or do they move in our direction and become less successful at it. All the hand wringing about the Lukes is focussing on the symptoms not the disease.

  23. JKB says:

    @john personna:

    You ask a good question about unstructured learning. We’ve become conditioned to classroom helplessness and tend to downgrade self-learning. I can’t tell you how many classes I took to get the certificate after having used the skills for years. But I had to have the paper to get promoted or get credit for promotion.

    Even now, most of the alternative learning is organized around an instructor feeding bits rather than the instructor as coach to individual and group study of the material. Thus we have lectures rather than question periods with an experienced guide.

    But most have been conditioned to showing up for class, being fed the information, perhaps the over achievers review it at home, and the real over achievers read for the next class. But the norm is passive learning from years of conditioning in school. Active learners who get excited about the information are beat down if they ask questions ahead of the syllabus or challenge the material by the teacher and socially disapproved of by the fellow students.

    Problem is by the time we get kids past the necessary mechanical, lecture learning in reading, spelling, basic arithmetic, we’ve conditioned them to sit passively, not appear to smart and not to put a lot of personal effort in to learning.

  24. Brummagem Joe says:

    @Drew:

    Despite all the usual BS that gets posted, capital providers are not “greedy” with some preordained desire to move the manufacturing footprint overseas.

    You’re using emotive words here but capital providers go where they can obtain the best return on their investment. This means that they tend to operate according certain economic laws like that of comparative advantage and while they may have no preordained desire to move the manufacturing footprint overseas as a practical matter this is what tends to happen. I don’t dispute the force of this economic imperative but the German model attempts to ameliorate it whereas US economic policy tends to encourage it.

  25. Brummagem Joe says:

    @Drew:

    They werent going to purchase crap. And don’t forget, a worker will quit an employer in a heartbeat for a few sheckles.

    Er this is true of any open economy.

  26. Mr. Prosser says:

    Best thread I’ve read here in a few days. One thing I noticed was there was no thought regarding Luke only making 50% more than Maddie and the fact that his work, although requiring high skills, is still a bit mind-numbing. I think Luke won’t stay at Standard for 30 years but probably align with new companies capitalized by types like Drew. Workers sharp enough to learn and keep learning, teamed with the engineers and investors can make this country up its manufacturing. John Personna is so right regarding the decentralizing of education, in the future students won’t be weeded out by impossible courses as much as by their own choices. The chance for a Maddie to go back for more schooling should be provided and can by by Khan-type academies.

  27. James Joyner says:

    @Brummagem Joe: I’m specifically not making a Nazi comparison. Rather, I’m saying that the Germans have an incredibly strong sense of nationalistic pride related to language, culture, and land that make them see fellow Germans as part of something very dear to them and that Americans have no such connection. We have a strong nationalism in other ways, but it binds us externally, not in terms of internal loyalty. Nor am I saying the German thing is bad–I’m half German. I’m just saying it doesn’t exist here and it’s sine qua non for the German Model to work.

  28. Ben Wolf says:

    @Brummagem Joe: There is no German economic miracle without an EMU to dominate and exploit. Nor have you addressed the reality that Germany has been squeezing wages since the Maastricht Treaty went into effect and heavily subsidizing its exports through corporate welfare, or that the fastest growing job sector in Germany is low-wage, part time “mini-jobs” with no advancement, training or raises. Germany maintains its manufacturing edge via beggar-thy-neighbor policies which are unethical, unfair and in any case are quickly coming to their end.

  29. Drew says:

    Fascinating to see me being admonished for using “emotive” words when it’s the very essence of leftist dialogue. But I digress.

    Yes, you have a realistic and sober view of capital formation and flows. It’s not as as strict as, say, the law of gravity, but pretty damned close.

    I question, though, the viability of moving to alternative models. I remember when Lester Thurow was going to have us all turning Japanese. Yeah, right. The cultural divides should not be easily dismissed.

    I happen to think the US would be just fine if we didn’t put so many road blocks in the way. Seriously, energy costs are a significant cost input to so many manufacturing endeavors. Yet we have this jackass President raising energy costs as an explicit policy goal even as with every passing week the global warming hoax is becoming evident to all…….just to pander to a voting constituency. He panders to financial services……for votes. He panders to unions. He panders to regulation. And we wonder why manufacturing goes away.

    I’ve been in manufacturing all my life. As an engineer, a manager and an investor. I don’t buy for second we can’t do it and do it well here in the US. My firm is doing it in the US. But left leaning philosophies are making it harder every day. It’s a shame.

  30. Brummagem Joe says:

    @Ben Wolf:

    There is no German economic miracle without an EMU to dominate and exploit.

    The German Wirschaftwunder long preceded the Euro and the Maastricht treaty.

  31. Drew says:

    @Brummagem Joe: Yes, and so my note to you that you have a sober view, unlike many here, about economic reality.

    In my worldview the auto companies had to be exposed to competition to force reform. Many her would opt for protection. I still remember some ridiculous GM car model that simply had the trunk sawed off in response to energy efficiency concers.

    Laughable, although sad.

  32. Brummagem Joe says:

    @Drew:

    Fascinating to see me being admonished for using “emotive” words when it’s the very essence of leftist dialogue.

    Blather.

    Yes, you have a realistic and sober view of capital formation and flows. It’s not as as strict as, say, the law of gravity, but pretty damned close.

    So you agree with me about both Ricardo’s law of comparative advantage and that the economic system is incentivised to take advantage of it. Nor did I suggest a wholesale shift in economic models either but some adjustments that recognise the realities of how the global neo liberal economic system has evolved. It isn’t an accident nor due to cheating that the German manufacturing sector is relatively so much larger than ours and a much more effective creator of job opportunities for the middle class….what were you were saying about empirical evidence a couple of days ago.

    The rest of your stuff is standard right wing ranting boilerplate not worth bothering with.

  33. Lomax says:

    One thing that might help would be to have a tax deduction for purchase of goods that are manufactured in this country.
    I watched in the ’70’s as the textile industry closed down and we started buying imported clothing and shoes. Now what do we have? Clothing that is ill fitting, defective, and doesn’t hold up. We also pay $20+ for a sweatshirt that cost $5 to make – just because it has some sports team or brand name on the front. Same thing for caps.
    Cars? I had 5 GM and Ford cars. All held up well and parts were very cheap. The president took over GM and we lost Pontiac (“We build excitement”) and Saturn. Now we have the disastrous Volt and a GM president who knows nothing about cars. Puzzling, since Pontiac was turning a profit.

  34. Brummagem Joe says:

    @James Joyner:

    We have a strong nationalism in other ways, but it binds us externally, not in terms of internal loyalty.

    What the heck does this mean. I would agree that culturally the Germans are more homogenous than us and given the choice of German product at a slightly higher price but equivalent quality to an import would buy German but this doesn’t mean they’d buy German clunkers as is suggested by your comment above:

    Once Detroit quit making the kind of cars Americans wanted to buy, we didn’t hesitate to start buying Japanese.

    The reason Americans turned to Japanese autos was because they were quantitively better in quality and reliability. And this was a consequence of management failure and had nothing to do with workers loyalty to each other. If Stuttgart and Wolfsburg had been producing clunkers there wouldn’t have much German worker loyalty either.

  35. Anon says:

    Just a point about Luke. It sounds like he is essentially being “under-utilized”. The machines don’t need to be reprogrammed often, but when they do, I’m guessing that he is the one who does it. Luke probably has the skills and intelligence to be a much higher-paid engineer of some type, but he would probably need to go back to school. (Though in my field, computer science, it is possible to make good money as a software engineer without a degree.)

  36. Brummagem Joe says:

    @Lomax:

    and a GM president who knows nothing about cars.

    I don’t know whether he knows a lot about cars but he clearly knows a lot more about the economics of the auto industry than you do.

  37. Drew says:

    BJ

    Sigh. Yet another leftist trying to sound intellectually superior on an internet sight, while some of actually do something about it, and have concrete results.

    Carry on.

  38. Brummagem Joe says:

    @Drew:

    I still remember some ridiculous GM car model that simply had the trunk sawed off in response to energy efficiency concers.

    This sort of anecdotal nonsense is irrelevant. And unless you’d noticed there’s been a substantive shift in the product profile of US auto maker to smaller and more fuel efficient cars….with or without sawn off trunks.

  39. Brummagem Joe says:

    @Drew:

    Sigh. Yet another leftist trying to sound intellectually superior on an internet sight, while some of actually do something about it, and have concrete results.

    Sigh…..more blather…..I did something about it for 40 years with generally positive outcomes.

  40. anjin-san says:

    The president took over GM and we lost Pontiac (“We build excitement”) and Saturn. Now we have the disastrous Volt and a GM president who knows nothing about cars.

    Yea, what a train wreck. Here is what today’s WSJ (a noted Obama tool) had to say on the subject:

    DETROIT—Michigan, once a basket case, is suddenly the U.S. economy’s comeback kid.

  41. @Lomax:

    The Volt ha a weird history, as a auto show concept car that caught fire with the people, rather than as anyone’s grand plan.

    The Chevrolet Volt concept car was unveiled at the January 2007. It’s kind of interesting. Those of us with a physics background said “you can’t actually make something that aggressive looking, and with those fat tires.” We were told that it was not going to be another Prius.

    It actually ended up with as much a Prius shape as it did that concept shape, and of course with skinny tires.

    Anyway … it all predates Obama.

  42. (Oh we were also told in 2007-2008 that GM’s new batteries would slash the price to Prius territory … didn’t happen. The Volt is basically priced like what it is, Prius plus more expensive batteries.)

  43. Drew says:

    Sigh…..more blather…..I did something about it for 40 years with generally positive outcomes.

    I think the Paleozoic era has passed. Jacking off on some Internet site about the Germans and juvenile Ricky Ricardo I’m smart references may make you feel better, but some of us are out there raising and employing capital, and creating manufacturing footprint and jobs right now.

    Maybe you and Jp need to get together and pull your puds and compare author citations. Great fun for the idle. Some of us have productive work to do.

  44. Drew says:

    This sort of anecdotal nonsense is irrelevant. And unless you’d noticed there’s been a substantive shift in the product profile of US auto maker to smaller and more fuel efficient cars….with or without sawn off trunks.

    I guess 30 years to respond works in your worldview. Not in mine, and more importantly, not in the consumers. And as for anecdotal nonsense, a rational person would look at market share, under pure, unsubsidized economic and consumer choice, , Ricky.

  45. Drew says:

    DETROIT—Michigan, once a basket case, is suddenly the U.S. economy’s comeback kid.

    DETROIT – Michigan, once a basket case, is suddenly the US economy’s subsidized comeback kid.

    There, fixed it for you.

  46. Brummagem Joe says:

    @Drew:

    I think the Paleozoic era has passed. Jacking off on some Internet site about the Germans and juvenile Ricky Ricardo I’m smart references may make you feel better, but some of us are out there raising and employing capital, and creating manufacturing footprint and jobs right now.

    Maybe you and Jp need to get together and pull your puds and compare author citations. Great fun for the idle. Some of us have productive work to do.

    More blather from a rather obvious phony. Btw it was David Ricardo.

  47. Brummagem Joe says:

    @Drew:

    And as for anecdotal nonsense, a rational person would look at market share, under pure, unsubsidized economic and consumer choice, , Ricky.

    But that wasn’t what you were talking about was it Danny?

  48. Brummagem Joe says:

    @Drew:

    DETROIT – Michigan, once a basket case, is suddenly the US economy’s subsidized comeback kid.

    There, fixed it for you.

    Like the financial industry you work in then Danny?

  49. Brett says:

    I wonder if you could teach calculus earlier in public school. I first took pre-Calculus as a sophomore in high school, and calculus as a junior. Maybe they should have doubled up on some of the algebra, and had us learn calculus in middle school through high school (and make it a requirement for all four high school years, as with English).

  50. john personna says:

    @Drew:

    Maybe you and Jp need to get together and pull your puds and compare author citations. Great fun for the idle. Some of us have productive work to do.

    lol, and here I was thinking that the two of you deserved each other! You both want to big-foot it on ego. Enjoy.

  51. Brummagem Joe says:

    @john personna:

    You both want to big-foot it on ego. Enjoy.

    Don’t worry jp I’m sure Danny Drew eats his greens.

  52. anjin-san says:

    subsidized comeback kid.

    Is that the best you can do? Conservatives predicted the auto industry bailout would be a disaster. Now that it is becoming a success story screeching about “subsidies” is all that’s left.

    Perhaps you could provide a list of major industries that DO NOT receive government subsidies…

  53. Brummagem Joe says:

    @anjin-san:

    Danny Drew claims to be a partner in a private equity firm. I’m not saying he isn’t, how would I know? However, I’ve worked in companies owned by PE firms and without exception the players in them are as sharp as a tack and very often people of wide general culture whereas this guy is as thick as a gate post and seems to think bar room humor and double talk will suffice to explain his positions. Embarrassingly so. He does not fit the profile my experience.

  54. FWIW, this week’s round-up at Hack Education has a lot of good news, but a couple unfortunate notes:

    President Obama announced the 10 states that will receive waivers to No Child Left Behind this week: Colorado, Florida, Georgia, Indiana, Kentucky, Massachusetts, Minnesota, New Jersey, Oklahoma and Tennessee (New Mexico applied for a waiver but it was not granted.) The Washington Post’s Valerie Strauss takes a closer look at what these waivers mean, arguing that “States are swapping one president’s education vision for another, and both involve the overuse of high-stakes standardized tests.”

    and

    MindShift reports that several California universities are restricting what students can do with their class notes. The crackdown isn’t entirely new (I reported on actions taken at Sacramento State back in October 2010), as schools have long held that students cannot publish or distribute their class notes for commercial purposes. The move does raise questions about the legality of many note-sharing sites, including Notehall which was acquired last year by Chegg.

  55. steve says:

    ” Yet we have this jackass President raising energy costs”

    Natural gas prices are way down. We are pumping more oil than we have in 20-30 years. Not sure what you expect any US president to do about worldwide consumption.

    Steve

  56. Carson says:

    @anjin-san: Lance Cracker Co. Joe Gibbs Racing Team

  57. fractalist says:

    Tariffs… robotics…

    Saturation Macroeconomics: Gobbledy-Gook or the Real Deal?

    Time for a new mathematical model, a new paradigm, for macroeconomics?

    Is there a patterned science representing the time dependent evolution of macroeconomics?

    The last paragraph of the Economic Fractalist main page http://www.economicfractalist.com/ ….

    The ideal growth fractal time sequence is X, 2.5X, 2X and 1.5-1.6X. The first two cycles include a saturation transitional point and decay process in the terminal portion of the cycles. A sudden nonlinear drop in the last 0.5x time period of the 2.5X is the hallmark of a second cycle and characterizes this most recognizable cycle. After the nonlinear gap drop, the third cycle begins. This means that the second cycle can last anywhere in length from 2x to 2.5x. The third cycle 2X is primarily a growth cycle with a lower saturation point and decay process followed by a higher saturation point. The last 1.5-1.6X cycle is primarily a decay cycle interrupted with a mid area growth period. Near ideal fractal cycles can be seen in the trading valuations of many commodities and individual stocks. Most of the cycles are caricatures of the ideal and conform to Gompertz mathematical type saturation and decay curves.

    For the Wilshire, the US composite equity index March 09 to October 2011 was a 4 phased Lammert growth and decay fractal series..

    x/2.5x/2x/1.5x :: 5/13/10/7 months. That’s an empirical real system observation – available to all – of the time dependent workings of the macroeconomic system.

    2005 was the description, the hypothesis – March 2009 to October 2011 was the empirical asset valuation evolution…

    The flash crash on 6 May 2010 ….. does that not meet second fractal criteria?

    “A sudden nonlinear drop in the last 0.5x time period of the 2.5X is the hallmark of a second cycle and characterizes this most recognizable cycle.”

    Maybe this is all occurring by chance alone …. Likely…. Very very very likely ….not.

  58. @James Joyner:

    But, unless it’s changed radically since my last experience with it–and it may have, my experience is sorely dated–they make a hard cut after 4th grade

    This is kinda going to the other extreme. The illusion that everyone should go to college is bad, but on the other hand so is pigeonholing 10 year olds and saying “No matter what later evidence you provide to the contrary, you will never be allowed out of this pigeonhole we just shoved you in.”

  59. The other sad thing is that Luke’s job isn’t actually much more secure than Maddie’s. My job involves developing automated testing systems that check out the operation of another system and evaluate how well it’s performing against specs. Now right now they’re only capable of checking out other computers, but I’s probably only several decades until there’s a computer that can use sensors to do the QA on the fuel injectors and adjust the milling machines itself.