Actually Skills Do Pay The Bills

Yes!

"China and other low wage economies around the world provide lower cost often government subsidized alternatives to U.S. manufacturing that becomes more expensive but not more productive if the wages just increased because Mr. Price thinks they should." YES!

Both articles (Milo's and the NY Times) are pretty interesting. I don't know enough about economics to make a point one way or another, but I heard from a random source that we (America) are shifting from a manufacturing nation to a services nation. Is there any weight or truth behind that?

While there may be some weight to it, it is the wrong issue to look at. US manufacturing makes more than Brazil, Russia, India and China combined. http://pmpaspeakingofprecision.com/2009/10/27/guest-post-manufacturing-mark-j-perry/

We produce about 18% of all world manufactured goods; 12 % of US GDP; have the highest worker productivity, and perform about 2/3 of all R&D expenditures here in the States.

If US manufacturing was a country, its production alone would put it in the top ten of all countries.

So why would we want to see that decline?

Once upon a time US was an agricultural economy. Agriculture employed most 'workers' This was displaced by Industrial work. Industrial work was able to absorb large numbers of "labor."

With 54% of recent college graduates unemployed or underemployed not working in the field their degree supposedly prepared them for, I will have a difficult time listening to people say that the transition to a service economy will involve similar employment opportunity.

Thanks for the thoughtful comment.

Milo

Yes there is truth to it. Just look at the population concentrations. Most of the people in cities are working desk jobs. Service. Insurance, marketing or sales, mechanical, plumbing, consultants, teaching, State employees, law enforcement or other public services.

There isn't so much farming, or manufacturing. When I was studying I think the balance stated was:

70% of the nation is in service to 30% in manufacturing.

Great points, Milo!

Unfortunately, the NY Times is less interested in being right as much as promoting agendas.

Bottom line: Skills are what is demanded, and are in short supply. Higher wages are determined by the value add of the skills obtained, and held in check by low cost competitors across the globe.

Skills should be the driving factor to higher wages. Not longevity, no matter how long you been doing something does not constitute a skill level. What constitutes a skill level is performance.

Skills lead to demand, which in turn, lead to better salaries (Wages, if you must). As a teenager , I worked constructing the first Comsat Dish in Hawaii. (Communications Satellite Dish) The entire structure was built in Italy using high strength aluminum.. The bidding went out all over the place, including the U.S. Japan, Spain, France, England etc. The project was a private, not Governmental project, and demanded the highest of skill, and materials to satisfy the monies put into the project, as well as returning monies to the initial Investors. The Italians were able to construct the dish in Italy, dial in all of the intricacies of dish alignment , shimming the mechanical adjustments etc. FROM ITALY! They got the contract, because it was a PRIVATE Contract, and project--Money went to the BEST, at that time (And it included shipping!!) , NOW--The constructors , were from San Leandro , Ca. The people that were used to actually operate the cranes, (90 ton walking cranes to set the dish etc. , for those who are familiar with LARGE projects), were RIGGERS, from the Oklahoma oil fields, who were used to going out, and setting oil derricks, and 800 foot radio towers, with no cranes , in the middle of nowhere. These guys had no formal education, but learned their PHYSICS, on the job, and were invaluable in their skills--A PHD in anything could not have produced the product that these riggers did, by Practical experience, and on the job learning--Know what--They, in 1967, made over $100 K a year--That is a huge amount of money for the time, but it was skill and demand that created the wage.. My point , only--

"Skills lead to demand"

There still needs to be a demand for that skill. For instance, in the land of the bald there is little use for hair dressers no matter how skilled.

You may not be totally correct on that- Have a sister in law, who has done make up and hair design for many Broadway shows--You cannot believe how many of the Artists we watch , are "Folically Deficient". Some in different ways , than others...Wigs come to mind also...

That rag gets most everything bass-ackwards. So there is no surprise there.

What is the surprise, that the value of the hard skills is a surprise to them.

To illustrate, that hard skills are not always perceived as hard skills, let me share a present day Nobel Prize winner.

Shinya Yamanaka and his british sidekick. They now share the prize in physiology for making adult stem cells a practical reality. The implications are fabulous. I bet, that these fellows never got close to a machine shop. They emphasized repeatedly the need for a clear vision and a lot of hard work. Their product are stemcells, programmable to do as it is needed to do repairs. The first showcase is retinal repair. The emphasis was on introducing methods, that later can become routine.

This -while seemingly from a different field - shows, that research, hard work and manufacturing (as far as routine concerns) are common in fields that are widely differing. I would argue, that the skillsets are the same. And you can bet, that their hard skills will pay the bills for a long time to come. If I understood the correctly, they want to make the repairs straightforward, and routine.

How else do you define manufacturing?!?

It depends on the country,level of civilisation,wealth,developed/developing nation,type of government etc. In the west a skilled worker might get better wages but in east office workers were better paid because working with clean hands(holding pen/pencil/typing) was a status-symbol than grease ,tools etc in hand. Also manufacturing companies (soda/soap/etc) and banks who made good turnover paid better wages than engineering workers. I don't know about communists,dictators,kingdoms etc

You left out the biggest factor affecting manufacturing wages, productivity. Thirty five years ago if you walked into a machine shop you saw a man at every machine, turning handles. Now a machinist is a Cad/Cam programmer, and he might run three, four, or more machines at once. He writes programs, sends them, to a machine, and writes another while the part is being cut. It's a lot more to learn, all the knowledge of the old time machinist, computer programing, CAD design. But the justification for sending the work to China, low wages, becomes less of a factor. A brand new manual machine which requires one operator per machine, might be had for $15,000. A CNC machine might be closer to $75,000 to several million, but one operator can run several, and make parts at a pace no skilled person could ever match. The capital costs far exceed any labor cost difference. One other thing, a mistake can destroy a machine. I have seen incredibly expensive damage caused by programing errors. So why would you want to put your investment far from where you can keep an eye on it?

Automation creates unemployment.

Some one must make the things that make Automation possible--Someone must make the jobs that design, build, service and maintain those products--The farriers of the past , became wheel and tire assemblers--The horse was replaced by an Iron horse--Some manufacturing jobs will be replaced by 3-D computer modeling, and more--Where does it stop? When some one needs a chocolate, or food recipe , or a certain beer , or a certain wine, whiskey, music , or art, or a novel, or a screenplay --The humanities will never be mass produced--The duplication , for distribution may be , but not the creation nor the spirit, nor the art..

And that someone requires skill.