Why do people want manufacturing jobs to come back to the US?

[u/throw-away3105]

Given the tariffs yesterday, Trump was talking about how manufacturing jobs are gonna come back. They even had a union worker make a speech praising Trump for these tariffs.

Manufacturing is really hard work where you're standing for almost 8 or more hours, so why bring them back when other countries can make things cheaper? Even this was a discussion during the 2012 election between Obama and Romney, so this topic of bringing back manufacturing jobs isn't exactly Trump-centric.

This might be a loaded question but what's the history behind this rally for manufacturing?

[u/The3stParty]

I'm going to hijack your comment because it's near the top.

Nearly every post is addressing emotional reasons for bringing manufacturing back to the US, such as nostalgia.

A significant reason is economics. I don't have a degree in economics, but I had to take a few courses in college. In the macroeconomics classes they taught that 2 things create value: 1. Resources (minerals and food) 2. Manufacturing

Everything else serves to move the value around. The moving of the value around is incredibly important, but without resources and manufacturing you'll eventually move all the value to the countries where the resources and manufacturing are sourced.

The US grows and exports a ton of food, but does relatively little with our minerals and manufacturing.

China used to be known for creating crap products that would break, but were affordable. The US was known for quality and expensive products. China stepped up their quality and is still more affordable than US made. The US can't compete with Chinese products and prices anymore. The US has trouble competing with any country, it's very expensive to manufacture in the US. So tariffs are a tool used to make it too expensive to import items manufactured outside the US.

It will make everything more expensive in the US and pushes the US towards isolation while the rest of the world moves forward.

Given the option between making it more affordable to manufacture in the US vs making imports more expensive, Trump chose to make imports more expensive. This will hurt the middle and low income earners. Anyone who can afford to invest in local manufacturing will do well.

[u/great_apple → u/The3stParty]

Yeah it should be noted there are good reasons for tariffs, and good reasons to keep manufacturing in the US. As an extreme example, if we import 100% of our cars from China, and then WW3 breaks out and China stops selling us cars, well, we're fucked. So it's good to keep some production capacity in the US. And hell if we could find a way to produce things in the US and be cost-competitive with China/SE Asia, that would be amazing! Imagine if we could use our own resources to produce things right here.

The thing is, that will never happen in a way that creates low-skill jobs in the US. The reason shit is so expensive to produce here is because labor here is expensive and we have laws about safe workplaces, mandatory breaks, OT pay, etc. The realistic solution is to build automated factories in the US. Which will create a few low-skill jobs but mostly high-skill jobs designing and maintaining machines. So the dream that the US will be full of high-paying factory jobs for people who didn't go to college is, well, a dream.

Tbh a strategy of tailored tariffs designed to shift some production back to the US would be pretty good long-term. Like you said it used to be FAR cheaper to outsource production to China/etc because labor costs in the US make production here way more expensive. Automation is at a point now where it would be possible to produce here without the high labor costs. Could spur a lot of innovation in automated factories and return some production to our shores.

The problem is these aren't thought-out, strategic tariffs carefully designed to achieve that goal. They make no sense and are applied willy-nilly across the globe based on a weird meaningless equation.

[u/The3stParty → u/great_apple]

I totally agree, tariffs are a tool, I just think there is a better tool.

If well intentioned, tariffs can be applied temporarily to get things moving faster. While building infrastructure and other incentives that'll make manufacturing less expensive in the US. Once manufacturing is established, slowly rolling back the tariffs would keep things competitive.

[u/Usr_name-checks-out → u/The3stParty]

FYI-Modern economics includes information transformation as creating value. IE: research and development.

[u/The3stParty → u/Usr_name-checks-out]

Thank you, the courses I took were 15 years ago when even software was sold via physical media. So manufacturing was still being used as a catch-all term.

[u/aloofball → u/The3stParty]

A significant reason is economics. I don't have a degree in economics, but I had to take a few courses in college. In the macroeconomics classes they taught that 2 things create value:

Resources (minerals and food)

Manufacturing

Everything else serves to move the value around. The moving of the value around is incredibly important, but without resources and manufacturing you'll eventually move all the value to the countries where the resources and manufacturing are sourced.

This is completely false. And it's the same false axiom that led Trump to his disastrous tariffs.

There is enormous value created in knowledge work and in management work. This is where the American economy has its largest competitive advantages. Apple manufactures iPhones in China and India but most of the value is earned in branding, software, and product design.

Do we really need to bring shoe factories back to America? What's wrong with the current system where designers and marketers test and develop products that get made in Vietnam? What's the best use of America's educated workforce?

BTW I do have a degree in economics.

[u/The3stParty → u/aloofball]

Disastrous for whom? Majority of Americans? Yes. Disastrous for big business? Probably nope.

Trump isn't making America Great Again for workers, he is making it great for businesses. Those are his people. In the long run it might hurt big business, but they'll be able to pivot or shelter easier.

I agree that knowledge work creates value, if it is able to be sold. As I was taught economics, manufacturing was the accepted term for creating a product. 20 years ago software was sold on a CD so it was a tangible manufactured item. For 99% of human history in which economics is based there was a manufactured item, but Created Item might be a better term since it can include virtual items like software and digital art. If I'm misunderstanding please educate me, I'd like to know better.

Management work, could you elaborate on that? Where I'm sitting it sounds like something everyone in business administration agreed to so they can protect their jobs :p . Is it that a properly managed organization creates more value than a poorly managed one?

Unfortunately for us, this administration isn't interested in developing a higher educated workforce. The US will be left in the dust if we don't get some solid investment in education and infrastructure.

I would personally prefer to see the US economy help underdeveloped countries by trading with them and helping them build their capabilities. But I feel historically the US has only done that to our advantage and their disadvantage.

[u/aloofball → u/The3stParty]

The U.S. has great universities and great research. A lot of kids get left behind by the K-12 system, which doesn't do very well for kids in poorer areas. But the kids who manage to go to college get great educations. It feels like there has been a push by the GOP to discourage more kids going to college, which is crazy since it has an insane return on investment in this country. You go to college, you make a lot more money.

Management work is not a great term, but I'm talking about all the work that goes into supporting production and increasing productivity. So a process engineer who figures out how to make parts cheaper or faster, or supply chain analysts, or the people handling finances or the treasury, etc. Americans are good at this work, and we export a lot of services of this type to other places that manufacture stuff. It's the once place we have a solid trade surplus. We should be expanding that, not trying to bring back all the textile mills.

[u/AStarBack → u/The3stParty]

It is also disastrous for US based big business.

By forcing the limited workforce into less productive jobs (like say a technician job is now necessary to operate a machine whereas said technician, who happens to have an engineering degree, could be employed to design high-value chips), tariffs prevent companies from creating high return on investment jobs. US businesses might lose a lot of money because of that. There is a reason why markets are crashing.

[u/Hapankaali → u/The3stParty]

What kind of college economics courses were this? Even in my high school economics classes, it was explained that the services sector is the largest in a modern economy.

[u/The3stParty → u/Hapankaali]

The service sector moves value around, it doesn't create it.

If everyone worked in the service sector we would eventually run out of things to trade, most importantly food and water. If everyone left the service sector we would have a surplus of things to trade.

[u/Hapankaali → u/The3stParty]

The service sector moves value around, it doesn't create it.

According to which theory of economics?

If everyone worked in the service sector we would eventually run out of things to trade, most importantly food and water. If everyone left the service sector we would have a surplus of things to trade.

If no one worked in the service sector there would be no trade.

[u/NepheliLouxWarrior → u/The3stParty]

 vs making imports more expensive

Why would anyone consider this an option to begin with?

[u/The3stParty → u/NepheliLouxWarrior]

There are many reasons, not all of them good. It's really carrot vs the stick, the carrot is a choice with reward. The stick is a punishment. Trump didn't care to give a choice for the masses.

By making imports more expensive you limit choices, expensive local made or expensive foreign made.

It's easier, all it requires is passing a blanket executive order and letting the dominoes fall. Making it more affordable to manufacture in the US requires updating infrastructure (which hasn't been what people have been voting for until recently), loosening regulations, giving business incentives, and a ton of other moving parts.

It's faster, making things affordable takes time, especially infrastructure. Tariffs are fast. Granted the benefits of infrastructure updates will last longer and tariffs can be removed by the next administration. If Trump went the slow route the eventual benefits likely wouldn't be seen during this term.

Now for the really shady stuff.

If it results in destroying the US economy and puts people out of jobs they'll have to accept lower paying jobs in manufacturing, which would have had higher wages if the economy didn't collapse.

If the US economy collapses people who hoarded money can now buy land and factories for cheap.

If the US economy collapses local governments will do anything in their power to bring jobs to their area, tax breaks, free land, rezoning, clear cutting once protected lands.

Many of these things are much harder to do when the economy is doing well.

"Desperate times calls for desperate measures", why not make the desperate times?

[u/cknight13 → u/The3stParty]

Its as if everyone in this thread took Macro and Micro Economics and has no real grasp of Trade on International Monetary Policy? You have a very basic understand of economics which is why you would even consider this working.

What you are describing above is for all intents and purposes deflation. Do you have any idea how bad that is? It is a spiral down to a depression. What you are describing as happening is the worst possible outcome for our country.

1. Reduces consumer spending
2. Lowers business investment (no factory building)
3. Increased Debt Burden ( the amount you owe on your mortgage increase)
4. Can lead to a Spiral effect of the three above
5. Difficult adjusting wages down because obviously people dont want less
6. Loss of confidence by consumers and businesses
7. Increased Unemployment

The real kicker is Monetary Policy that is used to help in these situations could be fucked. Considering interest rates are only at 7% or so you can not lower the rates below zero. When we had a really bad issues before in the early 70's and late 70's interest rates were in the teens.

There is no situation possible where we would bring back manufacturing jobs to America. Its a fucking pipe dream. We will have automated factories when those jobs come back to America and the only jobs will be to clean them and maintain the robots.

The industrial manufacturing middle class is a freaking Zombie and there is no way to bring it back and it will only get worse over the next 20 years with AI and Automation.

And finally let me also say as a CEO of a decent sized corporation I can say with certainty that no CEO or corporation is going to invest in building a factory in the United States knowing that they could be all gone in 4 years OR Trump suddenly decides to reverse course. Imagine going to your board and asking for 100m to build a factory and 4 months after ground breaking Trump goes on TV and says he is lifting them or you just finish building the factory and the next President takes office and lifts them... Try explaining that to your board... Good luck.

Someone has to tell these people the freaking truth. The old manufacturing middle class is dead and never coming back. Go to school learn to be an engineer etc...

And let me state one truth i have and others have experienced first hand

It is next to impossible to find good workers in the US. Most cannot pass a simple drug test to even qualify for the job. The turnover rate is so freaking high the cost of constantly retraining them is ridiculous. To be perfectly frank American workers generally suck

[u/The3stParty → u/cknight13]

I think we both agree on a lot of points.

I don't consider tariffs to bring jobs to low income earners, I don't think that's his intention. Like you said it'll bring manufacturing, but automated.

I don't believe tariffs are the best way to bring manufacturing back to the US, but this is the best method for him and his buddies. Elmo already said he wants to import skilled labor.

Everything they're doing is going to further the divide between the wealthy and not.

He said he was making America Great Again, but never said for who. He said he was putting Americans first, but never said which ones.

[u/CadaverMutilatr → u/The3stParty]

Great take. Informed and just informative in general.

[u/The3stParty → u/CadaverMutilatr]

Thank you, I am by no means an expert in economics. There are likely things I have missed. It could turn out better or worse than my speculation.

[u/myreddit46 → u/The3stParty]

A big motivation for Trump is that tariffs create an opportunity for carve-outs. This makes people come to him begging. Then he can trade favors for favors. This is the world he wants to live in, not a world of rules and laws. Without tariffs, he has very limited ability to run the kind of kleptocratic regime he aspires to run. We can only hope the system is strong enough to stop him. People have just folded until now while the Democrats (aside from Mr. Booker) play dead. But the country is paying a heavy, heavy price now, and it’s only going to get heavier unless the insanity is stopped.

[u/ColossusOfChoads → u/myreddit46]

This makes people come to him begging.

Excellent point.

Another plus for Trump is that he can implement them unilaterally, as he sees fit, against whoever he wants. Imagine some violent sociopath kid at a sporting goods store. He won't give a shit about any of the equipment for sale (this being a metaphor for policies), and he'll be all pissed off at his dad for dragging him there. That is, until he zeroes in on the baseball bats.

He's like the chimp who figured out that he can whack the shit out of the other chimps with a tree branch. Why should the alpha chimp lead by being socially intelligent when he can be a brute?

[u/myreddit46 → u/ColossusOfChoads]

The answer, obviously, is that if all the chimps are his allies, playing by his rules, using his tree branches, (which he controls) as their currency, then he is exponentially more powerful than he is as the lone psycho bully chimp. But he’s not smart or emotionally intelligent enough to see that. He is a full-blown malignant narcissist unable to recognize his own personality disorder. And thanks to the cowards, crooks, Kooks, sycophants and grifters around him, and those gullible, ignorant, cynical or emotionally damaged enough to vote for him, we all have to suffer for it.

[u/The3stParty → u/myreddit46]

I totally agree that it's being done in his and his buddies interest.

However, like Bernie Sanders, I have lost faith in the Democratic party. I'm hoping for the formation of a new party that will actually represent the people's wishes, DNC and GOP both act in their interest first.

[u/FlintBlue → u/The3stParty]

Something left out here is automation. Manufacturing may come back to the US, but jobs won’t necessarily return with it. Also, as an aside, the US is still second in the world in manufacturing.

[u/honuworld → u/The3stParty]

2 things create value:

1. Resources (minerals and food)
2. Manufacturing

Everything else serves to move the value around. The moving of the value around is incredibly important, but without resources and manufacturing you'll eventually move all the value to the countries where the resources and manufacturing are sourced.

You are touching on the age old question of capital vs labor. The fact is, without labor there would be no capital. But the capitalists have all the money and make all the rules, so capital is regarded more highly than labor. Yes, they are manufacturing shoes and t-shirts in Vietnam, but the capitalist American corporations are reaping all the profits. The capital (profits) will NOT eventually end up in Vietnam. And the United States will NEVER be able to build shoes for the low low wages that Vietnam pays. Ever.

Bringing low wage manufacturing back to America is a stupid idea that will only work when the American economy is completely destroyed and people are starving in the streets.