From An Industrial Economy To A Paper Economy – The Stunning Decline Of Manufacturing In America
by Tyler Durden
Sep 6, 2016 6:30 PM
Submitted by Michael Snyder via The Economic Collapse blog,
Why does it seem like almost everything is made in China these days? Yesterday I was looking at some pencils that we had laying around the house and I noticed that they had been manufactured in China. I remarked to my wife that it was such a shame that they don’t make pencils in the United States anymore. At another point during the day, I turned over my television remote and I noticed that it also had “Made In China” engraved on it. With Labor Day just hours in the past, I think that it is quite appropriate to write about our transition from an industrial economy to a paper economy today. Since the year 2000, the United States has lost five million manufacturing jobs even though our population has grown substantially since that time. Manufacturing in America is in a state of stunning decline, our economic infrastructure is being absolutely gutted, and our formerly great manufacturing cities are in an advanced state of decay. We consume far more wealth than we produce, and the only way that we are able to do this is by taking on massive amounts of debt. But is our debt-based paper economy sustainable in the long run?
Back in 1960, 24 percent of all American workers worked in manufacturing. Today, that number has shriveled all the way down to just 8 percent. CNN is calling it “the Great Shift”…
In 1960, about one in four American workers had a job in manufacturing. Today fewer than one in 10 are employed in the sector, according to government data.
Call it the Great Shift. Workers transitioned from the fields to the factories. Now they are moving from factories to service counters and health care centers. The fastest growing jobs in America now are nurses, personal care aides, cooks, waiters, retail salespersons and operations managers.
No wonder the middle class is shrinking so rapidly. There aren’t too many cooks, waiters or retail salespersons that can support a middle class family.
Since the turn of the century, we have lost more than 50,000 manufacturing facilities. Meanwhile, tens of thousands of gleaming new factories have been erected in places like China.
Does anyone else see something wrong with this picture?
At this point, the total number of government employees in the United States exceeds the total number of manufacturing employees by almost 10 million…
Government employees in the United States outnumber manufacturing employees by 9,932,000, according to data released today by the Bureau of Labor Statistics.
Federal, state and local government employed 22,213,000 people in August, while the manufacturing sector employed 12,281,000.
The BLS has published seasonally-adjusted month-by-month employment data for both government and manufacturing going back to 1939. For half a century—from January 1939 through July 1989—manufacturing employment always exceeded government employment in the United States, according to these numbers.
You might be thinking that government jobs are “good jobs”, but the truth is that they don’t produce wealth.
Government employees are really good at pushing paper around and telling other people what to do, but in most instances they don’t actually make anything.
In order to have a sustainable economy, you have got to have people creating and producing things of value. A debt-based paper economy may seem to work for a while, but eventually the whole thing inevitably comes crashing down when faith in the paper is lost.
Right now, the rest of the world is willing to send us massive amounts of stuff that they produce for our paper. So we keep producing more and more paper and we keep going into more and more debt, but at some point the gig will be up.
If we want to be a wealthy nation in the long-term, we have got to produce stuff. That is why the latest news from Caterpillar is so depressing. In addition to the thousands of layoffs that had been previously announced by the industrial machinery giant, it appears that a fresh wave of layoffs has arrived…
Hundreds of mostly office employees received layoff notices at one of the largest Caterpillar Inc. facilities in the Peoria area this week, just as the company announced plans to close overseas production plants and eliminate thousands more positions.
A total of 300 support and management employees at Building AC and the Tech Center in Mossville this week received job loss notifications that included severance packages, 60 days notice and mandated Illinois Worker Adjustment and Retraining Notification Act letters.
During this election season, you will hear many of our politicians talk about how good “free trade” is for the global economy. But that is only true if the trade is balanced. Unfortunately, we have been running a yearly trade deficit of between 400 billion dollars and 600 billion dollars for many years…
When you have got about half a trillion dollars more going out than you have coming in year after year that has severe consequences.
Let me try to break it down very simply.
Imagine that I am the United States and you are China. I take one dollar out of my wallet and I give it to you and then you send me some stuff.
After a while, I want more stuff, so I take another dollar out of my wallet and send it to you in exchange for more products.
But that stuff only lasts for so long, and so pretty soon I find myself taking another dollar out of my wallet and giving it to you for even more stuff.
Ultimately, who is going to end up with all the money?
It isn’t a big mystery as to how China ended up with so much money. And when we can’t pay our bills we have to go and beg them to let us borrow some of the money that we sent to them in the first place. Since we pay interest on that borrowed money, that makes China even richer.
This is why I am so obsessed with these trade issues. They truly are at the very heart of our long-term economic problems.
But most Americans don’t understand these things, and they seem to think that our debt-based paper economy can just keep rolling along indefinitely.
In the end, history will be the judge as to who was right and who was wrong.
Forum Acquires Dynacon (USA)
Forum Energy Technologies, Inc. announced yesterday, December 3, that it has acquired Dynacon, Inc. (“Dynacon”). Details of the transaction were not disclosed.
Dynacon is the leading provider of launch and recovery systems (“LARS”) used for deployment of remotely operated vehicles (“ROVs”) and also manufactures high quality, specialized cable and umbilical handling equipment for all segments of the marine industry. Dynacon’s Bryan, TX location employs over 100 people and consists of 82,000 square feet of manufacturing and office space and 40,000 square feet of specialized test area located on sixteen acres.
Cris Gaut, Forum’s Chairman and Chief Executive Officer, commented, “Dynacon expands our Subsea Technologies capability and integrates an important part of the ROV supply chain. We plan to continue Dynacon’s long legacy of providing top quality systems to its customers, while investing in the company’s facility in Bryan to expand capacity. We welcome all of the employees of Dynacon to Forum.”
James Stasny, Dynacon’s President and Co-founder, commented, “We are pleased for Dynacon to become a part of Forum. Dynacon’s success has resulted from our employees’ hard work and their commitment to serving the needs of our customers with quality equipment. Forum recognizes the value of Dynacon’s operations and our management team, which will remain in place.”
Forum Acquires Dynacon (USA)| Offshore Energy Today.
- Forum Energy Technologies, Inc. Acquires Dynacon, Inc. (virtual-strategy.com)
GIGANTIC MISS: DALLAS FED REPORT PLUNGES TO -13.2
Texas factory activity continued to increase in July, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell from 15.5 to 12, suggesting slightly slower output growth.
Other measures of current manufacturing activity also indicated slower growth in July. The new orders index was positive for the second month in a row, although it moved down from 7.9 to 1.4. Similarly, the shipments index posted its second consecutive positive reading but edged down from 9.6 to 7.4. The capacity utilization index came in at 8.7 after rising to 13.3 last month.
Perceptions of broader economic conditions were mixed in July. The general business activity plummeted to -13.2 after climbing into positive territory in June. Nearly 30 percent of manufacturers noted a worsening in the level of business activity in July, pushing the index to its lowest reading in 10 months. The company outlook index remained positive for the third month in a row but fell from 5.5 to 1.6.
Labor market indicators reflected stronger labor demand. Employment growth continued in July, although the index edged down from 13.7 to 11.8. Twenty-one percent of firms reported hiring new workers, while 10 percent reported layoffs. The hours worked index was 4.1, up slightly from its June reading.
Price pressures were largely unchanged in July, although compensation costs rose at a faster pace. The raw materials price index held steady at 3, suggesting only slight increases in input costs this summer after strong upward pressure earlier in the year. Selling prices fell for the fifth consecutive month in July; the finished goods price index was -5.5, virtually unchanged from last month’s reading. The wages and benefits index rose nearly 10 points to 22.9, largely due to a marked rise in the share of firms noting increased compensation costs. Looking ahead, 36 percent of respondents anticipate further increases in raw materials prices over the next six months, while 25 percent expect higher finished goods prices.
Expectations regarding future business conditions were less optimistic in July. The index of future general business activity slipped from 1.3 to -7.3, registering its first negative reading in 10 months. The index of future company outlook remained positive but fell from its June level, coming in at 5.3. Indexes for future manufacturing activity also decreased, although all remained in strong positive territory.
The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity. Data were collected July 17–25, and 89 Texas manufacturers responded to the survey. Firms are asked whether output, employment, orders, prices and other indicators increased, decreased or remained unchanged over the previous month.
Survey responses are used to calculate an index for each indicator. Each index is calculated by subtracting the percentage of respondents reporting a decrease from the percentage reporting an increase. When the share of firms reporting an increase exceeds the share reporting a decrease, the index will be greater than zero, suggesting the indicator has increased over the prior month. If the share of firms reporting a decrease exceeds the share reporting an increase, the index will be below zero, suggesting the indicator has decreased over the prior month. An index will be zero when the number of firms reporting an increase is equal to the number of firms reporting a decrease.
More to come… Source
- Texas manufacturing activity surged in June, Fed report says (bizjournals.com)
- Texas factories boomed in June (mysanantonio.com)
Houston,Texas: TWMA Opens New Manufacturing Base in Houston (USA)
TWMA, a leader in integrated drilling waste management and environmental solutions, has recently launched its U.S. expansion with the opening of the company’s newest manufacturing base in Houston. The new facility will allow TWMA to manufacture American-made equipment and meet growing demand for its services in the United States and around the world.
“This new office has the potential to change the dynamics of the entire company,” said Ian Nicolson, TWMA’s Vice President of the Americas. “We’re bringing a whole new range of services and technologies to the U.S. oil and gas industry. We can save operators $30 to $40 thousand dollars per well by handling and treating their drilling wastes with our specialized waste management solutions.”
Demand for TWMA’s waste management solutions is booming. The company has already won several U.S. contracts with oil and gas operators, which has helped fuel the expansion.
Operating both offshore and onshore, TWMA handles and treats drill cuttings and associated oil industry wastes. Using state-of-the-art technology, drilling wastes are recovered, recycled and reused, recovering significant operator costs whilst minimizing environmental impact.
While initial plans focus primarily on expanding in the U.S. market, having a Houston-based facility will allow TWMA to extend its reach into Canada and South America, Nicolson said.
Through the Houston office, TWMA will increase the production capability for its entire range of waste management solutions to service the U.S and international markets. This will include the TCC RotoTruck and TCC RotoMill, which are currently utilized globally to thermally process drilling wastes onshore and offshore, and supporting equipment including vacuum systems, dryers and TWMA’s cuttings collection and distribution system (CCDS).
TWMA has been operational in the United States since 2008, but the new Houston facility will be the company’s first regional manufacturing site. Currently, 20 employees have been hired to work at the new facility. TWMA expects to triple this number by July and plans to have 200 to 300 employees hired in the next 24 months.
- USA: Deep Down, Bornemann Team up in Gulf of Mexico Subsea (mb50.wordpress.com)
- WellEz Updates Wellbore Schematic Software for Drilling & Completion Reporting (mb50.wordpress.com)