An article yesterday titled ‘Manufacturing: Make or break?' summarizes a lot of what I have been talking about with respect to the current and prospective importance of loss in manufacturing jobs in the developed countries.  As the article summary puts it "The shift of manufacturing to low-wage parts of the world was supposed to usher in an era of well-paid service sector jobs. But as the factories have gone dark, much of the work connected to R&D has also taken flight while the number of low-paid service jobs has mushroomed. Now post-industrial economies are reconsidering the importance of their manufacturing sectors", and that "Many policy makers believe future growth once again lies in making things" – referencing the rush by governments to stress the importance of a vital manufacturing sector to future economic growth.  How can it be otherwise.  As I have said many times, manufacturing creates ‘things' of at least some lasting value, service jobs in general do not do that - nor are the ‘products' generated from service jobs typically as subsequently transferable as are products generated by manufacturing jobs.

The article reports President Obama's new "Middle Class Task Force" sees the reinvigoration of the "flagging" U.S. manufacturing sector as critical if average Americans - whose after-inflation incomes have stagnated for years - are to achieve real wage gains in coming years.  Apparently Mr. Obama imagines the U.S. factories of tomorrow producing high-tech electric cars, silicon chips and solar panels.

In my view, the only way that the developed countries will retain a meaningful manufacturing base going forward is by generating manufactured products in capital-intensive, low labor requirement, manufacturing plants.  The labor rates in the developed countries simply are not, and will not be, competitive without a major reduction in the expectations and standards of living of residents of the developed countries.  Anyone who thinks that production workers – be they Chinese, Taiwanese, etc. – are not capable of producing high quality products needs to give their head a shake.  They can and they are doing that.  So think about it, is the worker who makes or made $60 - $70 per hour at a car assembly plant in Michigan going to be willing to work for (say) $10 - $15 per hour in order to compete with developing country labor rates plus the attendant incremental transportation costs related to making a car in China and selling it in Michigan?  It doesn't take rocket science to answer that one!  Either the worker in Michigan will unhappily ride a bicycle to work and eat pork and beans instead of steak, or be unemployed and be even less happy with his/her lot in life.

I believe the developed countries by giving up their manufacturing jobs – particularly in the past 10 years – to maintain and even increase the standard of living for their residents have played the old ‘short-term gain for long-term pain' game.  This seems obvious to me, and I can't see how others don't think and write extensively about this.  In prior posts I have invited readers who disagree with me on this and other topics - and to comment on my blog posts and tell me why I am wrong.  As a Canadian living in Southern Ontario I assure you I very much want to be wrong on this ‘loss of manufacturing jobs' issue.  To date, no reader has taken me up on ‘straightening my thinking out'.  When I receive no comments when I invite them there are three obvious conclusions:  (1) no one reads my blog posts – and I know that is not true from by Blog visit statistics; (2) no one disagrees with me, which I seriously doubt; or (3) some readers do disagree with me but simply can't be bothered to respond or are reluctant to say what they think in a Blog comment.  I encourage the latter group to come out of the woodwork.