I'm trying to understand the logic behind the job multiplier number, particularly for the examples of health care vs manufacturing, where the average pay was similar (health care slightly higher). Why the difference? Are those extra jobs productive? Are they equally well-paying? I can imagine a manufacturing plant that generates toxic waste -- there's jobs in the cleanup sector, but I'm not sure it's a net win for the local economy.
It seems a better metric would be "dollars brought into the local economy". Perhaps if I'm making a widget that's for "export" (no local use) all of my wages come in from outside. If I'm in healthcare, ultimately my customers are local and there's no dollars brought into the local economy?
How does industrial-scale farming (like here in IL) work out? We grow way more food than we eat, most of the "product" ends up for "export".
Some economists are fond of the term “Creative destruction”. But destruction in many cases does not create, but instead consolidates. The result is growth of ever larger corporations. The smaller businesses are destroyed in the process, and many jobs are lost.
A few examples:
Retail bookstores were destroyed by Amazon
Retail record stores were destroyed by Apple
Retail hardware stores were destroyed by Home Depot
Print media advertising (newspapers, magazines) were destroyed by Google
At the 1963 March on Washington (for Jobs and Freedom), many held placards that read “We March for Jobs for All Now”.
Jobs+Families+Schools+Safety. I think these are all necessary for building a healthy, functional community.
Jobs are the foundation, and are especially important for men. Work gives one a sense of dignity and purpose. Without jobs, men don't form families. Two-parent Families are a super power, economically and psychologically. Families produce children, thus the community needs Schools. Supporting every good school are lots of healthy families, and lots of Moms and Dads. And there must be public Safety, for workplaces, schools, and families to thrive. There you have it: Jobs+Families+Schools+Safety.
If you want to destroy a community, take away the jobs. The rest naturally crumbles. Approx 70% of Americans do not have a college education. We need jobs for them. But starting in the 1990's, corporate America moved many of those jobs overseas. One of the corporate icons of this movement was (ironically) named Jobs.
Since the entire conversation regarding manufacturing and deindustrialization has provoked such insightful debate, I’d like to throw out one last question to Clifton and The Glenn Show community. Recently Ford announced plans to license CATL technology for an LFP battery plant in Michigan that aroused considerable ire both from Congress and from the local residents near the proposed plant. Of course the chief complaint was that CATL was a Chinese company and obviously every Chinese company was beholden to the whims of the big, bad CCP. Likewise another Chinese company Gotion is also pushing forward with plans for a battery plant in Michigan despite similar protests.
The plants would certainly bring jobs and know-how to America, yet many seem to believe that national security interests, however vaguely articulated, trump any economic concerns. Given the Biden administration’s stated green goals, working closely with China would almost certainly make the attainment of such goals more feasible. I wonder if others are also of the belief that economic propensity should ultimately be subordinate to geopolitics.
Here we actually have an opportunity to reverse some of the hollowing out alluded to by working with China, yet it's become almost social and political suicide to say so. I fear that we're shooting ourselves in the foot in so many different ways.
Given that you clearly believe in the economic importance of manufacturing and the resulting multiplier effect as far as indirect jobs created, I would have to assume that you would support Chinese manufacturing plants in the US, Clifton. But I'm curious if that's actually the case. How would you ultimately balance the economic versus the geopolitical?
Hi Clifton, I appreciate that you brought up automation because I think it has been severely undercounted. As I understand it, initially the steel mills suffered from foreign competition, but now the big problem (for labor) is to get costs down the plants have almost no people! That seems to be the pattern, first move to cheaper labor, then to much more efficient technology. All the stats I’ve seen have indicated job losses to automation are made up for somewhere else, but that doesn’t seem right… secretaries are almost obsolete now that there are computers and men know how to use them, as are all kinds of administrative and record keeping jobs. Online ordering and kiosks have made stores and fast food have far fewer employees. Remember when you booked a vacation through a travel agency instead of online? I studied technical translation thinking that would be a good partime gig, but that is gone too. Even things like counseling and tutoring are being done by bots (or prerecorded videos) It seems like the only growing fields are drivers, construction, coding, and middle management. Am I missing something? If I’m correct, aren’t all these problems about to get much worse?
Thanks for your comment. The issue of automation began to resonate with me when I walked through a paper mill over 20 years ago. I didn't see anybody on the shop floor while rolls of paper at least 10 feet wide were being made. The final rolls were several feet in diameter. I don't know what they weighed, but my guess is at least a ton each. The machines automatically loaded a new spool after the roll on the machine was complete. I was amazed by this. I asked the guy walking me through the plant where the workers were. He told me the machines ran themselves. There was a skeleton crew available if problems arose. I could be wrong, but my guess is that paper companies pocketed the money they saved through automation instead of redirecting employees to other activities.
I was at a Walmart in metro Atlanta last year that was 100% self-checkout. The store was a mess, so I don't think the folks who used to be cashiers had been reassigned to other activities within the store. Self-checkout creates more opportunities for "shrink" so my guess is that retailers will keep trying new approaches. Walgreens opened a store in Chicago a few months ago that only has two aisles. Most of the merchandise is out of sight and not reachable by customers. You order what you want through an in-store kiosk. Walgreens employees gather and bag your purchased items for you. You pick up your bagged merchandise on your way out:
It's possible that these new technologies will be used to make workers more efficient instead of as a way to replace them but I'm skeptical. Anybody who says they know how all of this will play out is being dishonest.
I can’t help but think these dramatic technological changes are to blame for all the social/political/cultural turmoil of our time, as groups battle over who will end up with the increasingly limited resources.
Clifton, I’d like to throw out another question at you. You highlight the fact that foreign born workers now make up almost 18% of the civilian labor force and that more importantly immigrant communities aren’t evenly dispersed across the country. I’ve suggested elsewhere that even elite immigration from South Asia and East Asia has negative ramifications as far as social cohesion goes. Apart from possibly displacing native born workers, the children of Asian immigrants have clearly exacerbated racial disparities in academic achievement and contributed in part to pushback to neuter gifted education. For instance, the recent push in California to establish a new framework for teaching mathematics was based on data showing that between 2004-2014, roughly 32% of Asian American students were in gifted math education compared to around 8% of white, 4% of Black and 3% of Hispanic students. Don’t be fooled by the usual rhetoric about combating white supremacy. The actual data shows that the Asian/non-Asian gap is far more significant than the gap between white students on the one hand versus Black and Hispanic students on the other.
I made the argument in another thread that America has become less like a traditional nation state and more like a corporation, the goal being to do whatever necessary to maximize the output of America Inc., while sacrificing the cultural cohesion and unity necessary for a country to survive long term. I’m skeptical that Chinese or Indian immigrants in Silicon Valley feel much kinship with Black Americans living in Harlem or the south side of Chicago or for that matter with white Americans living in flyover country. Truth be told, many probably feel more kinship with their nations of origin than with many of their fellow countrymen.
Yet we’ve sort of accepted that Faustian bargain given the enormous contributions that Asian immigrants have made to STEM in America. Certainly our political and pundit classes love pushing for immigration from places like India, China or South Korea, while almost never mentioning the Black or Hispanic populations in this country as potential sources of human capital. Despite their glib assertions of politically correct orthodoxy, what does this suggest about what the intellectual class in this country really believes when it comes to race?
Given the rise of places like Taiwan or South Korea in past decades and the rise of China today, it’s not even clear that the gambit to import elite Asian immigrant labor is likely to succeed long term as far as ensuring American technological preeminence. For instance, around 90% of semiconductor and EV battery manufacturing takes place in East Asia today. I wonder if you believe that America’s penchant for importing elite immigration is still worth the social price this country pays in terms of creating such a culturally and ethnically disaggregated population.
It always seemed to me that the reason so many immigrants were high skilled (and clearly in demand) is because they were educated at someone else’s expense. When I studied engineering almost none of the graduate students were raised in America, and conventional wisdom was that if you had to pay for grad school you should not go. Coming out of school with a BS, kids were able to make significantly more than you would as a grad student by getting a job with industry (especially important with student loans). In fact, a good friend of mine was studying theoretical physics at a top physics grad school and quit a year shy of his PhD because he was tired of being poor. He aced all his actuarial exams and was making really good money in no time. It always struck me as a disconnect in what we as a society value and what we are willing to pay for.
Thanks for your comment. I've done lots of work with people from different backgrounds. It feels natural to me now. I don't remember what it was like when those experiences were new so I don't claim to know how things will play out. The one thing I've learned and try to practice daily is to treat everybody with respect. That approach consistently yields good results. That said, America is struggling to accommodate the large influx of immigrants who've arrived in a relatively short period of time. The tensions between newly arrived immigrants and existing residents who feel that their communities have been neglected is palpable in places like Chicago. I'm not sure anybody knows how to address this issue at a time when our political process is polarized and broken.
One last point: America will need highly-skilled immigrant workers for the foreseeable future. There's no way around this until our K-12 education system improves unless we're willing to accept economic stagnation for the sake of domestic harmony. That's a risky proposition at a time when we're running massive deficits, our entitlement programs are underfunded, and the national debt is at a peacetime high.
The USA doesn't exist in a vacuum. As economically powerful as we now are, don't forget that Rome was also. And Egypt. And Mesopotamia. And, China before, and China again.
We can't contemplate our navels while other places in the world are literally eating our lunch. And don't get me started on NAFTA.
"The tensions between newly arrived immigrants and existing residents who feel that their communities have been neglected is palpable in places like Chicago."
Cliff, could you elaborate on the above, or point me to one of your favorite articles/documentaries on this topic?
Sure. Here's a CBS Chicago report from a couple of months ago where residents were protesting the use of closed schools to create a "respite" center for newly arrive immigrants:
The CBS Chicago video contains footage of the emotions that were on display at a public meeting where city officials tried to explain their plans. This issue was covered extensively by Chicago news organizations.
Thanks for the response Clifton. Our pundit class so universally extols elite immigration as a virtue that no one ever bothers to question its downsides. I’m glad you’ve acknowledged the very real tensions brought about by the presence of culturally and ethnically diverse immigrant communities.
I wonder what it says about America that we need highly skilled immigration for the foreseeable future. Would one say the same about China? Foreigners contribute to a far greater proportion of American STEM than vice versa for China. It seems to me that the Chinese model is built on the cultivation of internal human capital while America’s post World War 2 preeminence has been disproportionately built on the labor of immigrants. Let’s not forget that the American space program benefited from Operation Paperclip, which moved over 1,600 or so German scientists, many of whom were former Nazis, to the United States. Prominent among such individuals was Wernher von Braun, who played a significant role in the development of the US rocket and space programs.
Yes, China has benefited significantly from overseas Chinese who have returned with the requisite skills and experience gained in the West, but by and large the people it attracts back to China are ethnic Chinese. I don’t think this fact is irrelevant. Look at our geopolitical conflict with China today and at the recently ended China Initiative, which did enormous harm as far as motivating scientists of ethnic Chinese descent to return to the mainland.
Anyway, I found it interesting that you highlighted the role that immigration has played in deindustrialization because contrary to many at this blog, I’m deeply skeptical that most of the tenets of the American model can withstand the test of time. Something has to give.
Rhetoric about equality of treatment and respect for all is good and fine, but at the end of day I think it’s undeniable that disparities become much more noticeable and intolerable when those who are disproportionately successful are of a different race and ethnicity than oneself. I find this to be a deep biological truth that can’t be wished away by verbal niceties about the United States being a proposition nation and the proverbial city on the hill.
"I find this to be a deep biological truth that can’t be wished away by verbal niceties about the United States being a proposition nation and the proverbial city on the hill."
You're anticipating a race war, Yan? If so, between who and who?
I wouldn't go so far as to say that I'm predicting a race war. I am however deeply skeptical that America can remain stable long term given its vast racial tensions. I don't see anything in the past 10 years in this country to suggest that I'm completely off the mark here, but I'm certainly open to arguments to the contrary.
I got called a Nazi for voicing my skepticism in a prior thread, but once again I wasn't presented with a compelling argument to the contrary. America has been operating under a delusion best described as liberal universalism and our intellectual class has clearly become intoxicated by its philosophical pretensions.
If you wanted something concrete, I’d imagine Korean-Black tensions in the aftermath of Rodney King but on a larger scale. Or the frequent clashes between former chancellor of education Richard Carranza and the Chinese American community in NYC. Or for that matter the crackdown against ethnic Chinese scientists per the recently ended China Initiative. Likewise Black-white tensions have been high for decades now as the aftermath of George Floyd showed.
There are plenty of ways for ethnic tensions to derail the unity of a country short of a full blown race war. I'm not sure if you've visited Japan, but I recently did for the first time and it was eye opening. Jared Taylor grew up in Japan to missionary parents and I believe his experience in that country was formative to his later views on culture and race.
Spending some time in Tokyo just makes me realize how thoroughly different America is as a country. John and Glenn frequently opine on matters related to culture and society. When it comes to topics like crime and policing or the war on drugs, Japan might as well be on Mars.
So in many respects, shit has already hit the fan. There's nothing remotely comparable in places like Japan or South Korea to what we see in our major cities like San Francisco or Portland today. I actually believe that America's culture wars and its slowly decaying social fabric will make the country less attractive to immigrants in the years ahead. Which is probably for the best, as I've argued above.
You can probably tell Charles that I've been harping on this point more strongly in the last couple of months. I think I've become afflicted with a certain sense of disillusionment and cynicism ever since I returned from Tokyo. Mostly I’m just annoyed by the fact that we can’t seem to have nice things in this country and that America seems to be in complete disarray. It’s always just the same tired old talking points while nothing ever really changes.
I guess I resent living in a country where I have to be careful whenever I’m walking around at night or taking the subway given that I’m in Manhattan and where people openly drug deal and inject right down the block from where I live. Americans are so fucking deluded if they think this is just life in the big city or that’s just how you would expect things to be in society. I guess we can drown in our delusions and philosophical pretensions.
There's no doubt that America leveraged immigrant talent after World War II. NASA got a major intellectual shot in the arm from German scientists. The Von Braun Center in Huntsville, AL is named after one of the German scientists who helped NASA develop rockets at the Redstone Arsenal in Huntsville, AL.
Correct me if I'm wrong, but my understanding is that China received a huge infusion of intellectual property and capital when they required multinational companies that wanted to do business in China to set up shop there and to partner with local companies. I don't want to minimize the quality of China's educational system, but it seems that foreigners helped drive many of their economic and intellectual advancements.
I’m certainly no expert on economic history, but I agree that forced technology transfers and even outright theft has played some role in China’s rise. However, given that China was near the bottom of global science after the end of the Cultural Revolution, such actions aren’t necessarily unique given its latecomer status. For instance, I know that many have drawn a parallel between China today and American economic espionage directed against the British textile industry in past centuries.
What might be worth pointing out is the extent to which such claims can be exaggerated, even though such actions undoubtedly do exist. For instance, the FBI frequently asserts that IP theft by China amounts to between $225-$600 billion annually. Yet journalist Mara Hvistendahl argued in her recent book The Scientist and the Spy that the figure was essentially made up. Nonetheless it’s become one of the most widely cited talking points, including by Donald Trump.
What is different between China and the US in my opinion is that a far greater percentage of STEM workers in America are foreign born compared to vice versa in China. At many of our leading tech companies for instance, anywhere between 40-60% of workers in technical areas are South Asian or East Asian. Ironically, this makes the conversation about China benefiting from “Western” technology all the more interesting because in some cases that technology was the result of Asian or Chinese immigrant labor.
We can look up the demographics at leading Chinese tech companies or in Chinese science labs today, but I’d venture a guess that the proportion of Chinese born workers is far higher in those fields compared to the percentage in the US. Again, I bring this up because you’ve highlighted immigration and globalization as destabilizing factors affecting the American middle class. I’m of the belief that the Chinese model is more sustainable long term.
I don’t believe that Black Americans or Americans more generally can fix our problems by appealing to structural inequities and expecting some sort of deus ex machina to remedy our maladies. The hollowing out of manufacturing is surely in part the result of misguided or shortsighted policy, but I think we should also seriously consider the role that education, training and the general cultivation of skills and values play in the emergence of global trends in high tech manufacturing. The recent brouhaha over TSMC's Arizona plant is a good case in point.
As I noted above, Morris Chang realized even decades ago that TI’s Japanese factories were more productive than its American ones. Anyone who thinks that Chinese companies like CATL dominate the EV battery sector today because of cheap labor as opposed to the preeminence of its engineering R&D is most likely deluded in my opinion.
Is the hollowing out of manufacturing ultimately a cause or an effect of deeper underlying differences in accumulated skills and values?
Asians are responsible for the Spanish flu and Wuhan flu which have killed millions worldwide, including my younger brother and sister. African Americans were significant in helping to develop vaccines against the Wuhan flu.
Lol, proves nothing, it originated in America, in Kansas, this is well known. You are positing someone's theory as fact because it fits into your China angst.
With the cost of labor wages and benefits in this country, deindustrialization would hardly seem to have been preventable. They used to say GM was a health insurance company that assembled some cars - that's not sustainable in an industry that has competitors that don't have to play by those same rules, and we know what happened to GM.
I had a manufacturing facility in Compton and Watts California for over 50 years. Hispanic to black requests for employment applications ran about 200 to 1.
That is where I learned that you could graduate from the local high school without learning to read. We had about 5 white applicants. They were either hopeless alcoholics or were accompanied by a probation officer. We did hire 2 Asians. One came from Nellis School for Boys in Whittier. (Local reform school)
His first day at Nellis he met with a counselor, who was also Japanese. The counselor told him if he didn't straighten up he would kill him, rather than let his disgrace race. Seem to work.
You overlook trade policy as a factor, or, perhaps you buried it under Government Policies. The deindustrialization was heavily influenced by the flood of cheaper, substitute, products we imported from the Far East. American manufacturers have been under tremendous pressure to produce goods at low prices since imports were able to undercut them. The only way to do that was to utilize cheap foreign labor to do so. Then, of course, as expected, those foreign manufacturers have been the primary source of innovation for those aging, but necessary products.
I will also agree that immigration has had a profound effect. Not only do the immigrants take the jobs that still exist in US manufacturing, but they tend to suppress wage growth due to the supply of labor. Personally, I’ve been amazed at how many Vietnamese, Cambodian, and Chinese families have come, one after another, through chain migration, to the factory where I used to work.
One last point. The unnecessary and counterproductive emphasis the US has placed on college education has distracted the Black population, especially those with lower income, from obtaining more valuable skills in the trades. Thanks to college practices of charging higher income families to pay, not only for their own kids, but also for the tuition of low income students (through obscenely high tuition), many Black families are romanced into the idea of a free (or very low cost) college education for their kids. It would be interesting to study the success of Black students engaged in the trades (after brief training, post high school, or even during high school), relative to those who go into the college ranks, only to drop out before graduation.
it's a valid point , and i would go further that the skills earned give that person not just a way to make money but the ability to help friends and family .
Thanks for your comment. I agree with your point about trade policy. I could have been more explicit in spelling out its impacts. Clyde Prestowitz does a good job of this with his book, "The Betrayal of American Prosperity." One of the big takeaways from the book is that American leaders often use trade as a foreign policy tool without appreciating the negative economic impacts back home.
There's a debate to be had about the value of college. Ben Wildavsky argues in this recent NY Times essay ("Let's Stop Pretending That College Degrees Don't Matter") that college degrees provide advantages in the labor market despite efforts by employers and politicians to reduce the number of jobs that require degrees:
One of the issues for black college graduates is that so many of them are clustered in majors that don't pay well. Georgetown's Center for Education and the Workforce (CEW) issued a report about this several years ago:
Suffice it to say that all colleges and all majors don't create equal value in the labor market. These things should influence the way we think about college.
I majored in sociology and worked for CDC&R for 34 years. Now, I live in an 8,000-square-foot home with a vacation home on the beach. My ex-brother-in-law, with only a high school diploma, and a corrections officer, managed to purchase a 2 million dollar home for which he sold double what he originally paid. A college degree isn't needed to become a millionaire.
Having no real knowledge of the semiconductor sector, I was surprised to learn the extent to which technicians with community college level education are a part of the foundry ecosystem at many of the leading fabs in places like Taiwan. There’s a misconception that semiconductor manufacturing is all about engineers with advanced degrees and while those roles certainly are an important part of the sector, there's also a huge demand for people with skills in the trades.
The recent brouhaha over TSMC's Arizona plant highlights many of the deficiencies of the current US system. America is very good at educating the best and the brightest and if those individuals aren’t to be found among the native born population in sufficient numbers, it’s very good at importing them from places like India or South Korea or China. I believe that the countries of East Asia do a much better job of inculcating skills and values among a much broader portion of the population.
Ultimately, I think we should draw a distinction between high tech manufacturing where training, education and technical know-how matter significantly versus the more traditional notion of manufacturing as a lower skilled job type where cheap labor is the predominant factor. Personally I’ve been interested in not only the geopolitical battle between the US and China, but also the greater shift of high tech manufacturing to East Asia as a whole. For instance, China, Japan and South Korea control between 90-95% of the entire EV battery sector and there’s a very real possibility that many of the high tech industries of the future will reside in that part of the world. What does that portend for the United States in the decades to come?
It certainly feels like the US is charging towards a future where the people at the top will be fine but where the vast core of the middle class will essentially be hollowed out.
You are very correct in this observation. German engineering has long been respected for its precision and quality. The German education system is kind of a merit based dream, where the lowest “educated” tradesmen start apprenticeships early and spend many years learning the trade fully. As far as engineering goes there are at least three paths that are more or less hands on vs theoretical, here those are all lumped together (though some schools offer engineering technology which is more hands on, they teach welding for example). Because the German system does a good job of tracking people by aptitude, they are able effectively make use of skilled labor. Here is much more luck of the draw.
I'm not familiar with the details but I had always read that countries like Japan and Germany do a much better job when it comes to vocational training. There's something deeply flawed with the American education system in my opinion.
Here's my controversial take. Racial homogeneity makes it easier for countries like Japan and Germany to implement ability tracking and to push for vocational training compared to the US because the latter exhibits a much clearer racial divide when such policies are implemented. So rather than adopting sane policies, we just argue endlessly over the racial composition at our most elite institutions like Harvard or Stuyvesant.
Well, I think Germany has some race issues as well. For decades it has been Turks, but German has a strong culture and public schools are specifically tasked with teaching children to be “German” with strong German social values. And over a generation or two, the ethnic differences shrink. I don’t think America does that (actively). There are critics who would call that forced assimilation, but it seems to be necessary for a harmonious society.
I don’t know if you remember this, but when there was that wave of Syrian immigrants in Europe one New Year’s Eve there were a wave of sexual assaults in Cologne (I think) and all of Germany had a huge reaction. It is normally very safe for a woman to go anywhere alone at any time without fear of assault in Germany. There was an increase of anti-immigrant sentiment afterwords. I say all this to suggest that it isn’t just multiculturalism, as how well the cultures overlap and assimilate. It gets tricky because it sounds like you are saying that one culture is superior, which I am not, just that some are more compatible.
I do remember when Germany let in over 1 million Syrian refugees in 2015 in the aftermath of the civil war in Syria and I recall the sexual assaults on New Year's eve in Cologne. It seems though that the Germans learned their lesson and I don’t recall there being such a massive influx of immigrants since.
Germany might be more multiracial than my initial comment implied, but I checked Wikipedia and the population is still about 86% European, which I would argue is far more homogenous compared to the US today. For instance, prior to the immigration act of 1965, America was around 85% non-Hispanic white. When I was in Berlin in 2019, I distinctly recall thinking to myself that it was far less multicultural compared to cities like London.
That being said, I do agree that European countries do a better job of teaching their citizens to eschew the perils of racial identity and I believe France is known for this. My understanding is that officially the French government doesn’t collect statistics by race because people are taught to view themselves first and foremost as Frenchmen.
As far as culture, I’m certainly suggesting that cultures can be incompatible, hence my appeals to homogeneity. As far as superiority, I think Glenn and John or Thomas Sowell would all agree that certain values and attitudes are far more conducive than others when it comes to achieving success.
Of course you are correct that Germany is significantly less diverse than the US. I don’t know if racial identities are less, or just that the society actively instills a larger cultural identity. What would be our cultural identity? I bet if you ask 100 Americans, you’d get many different answers. In Germany, “to be German” would, I think, have a lot more agreement. I think we *could* do that here, but it’d be hard to get agreement on the vision.
I always find anything Mr. Roscoe writes to be thoughtful and well-researched. It is hard to argue with his data; the multiplier effects seem impressive in their inexorability. I have always thought that the lack of well-paying jobs for those with a modest education was problematic after the brief period of halcyon days following World War II. But I have heard some refer to this group., both black and white as essentially an artificial middle class whose days were numbered from early on. Are there any policy recommendations or approaches that we can take from all this that might have the effect of making things better? College for all is a pipedream and when everyone is "college-ready," what we will see will be little more than the thirteenth grade. I do not see any obvious way out of this.
The rate of change within the global economy is accelerating. Fewer and fewer workers can expect to work for one company or in one industry for most of their careers. The challenge for all of us is to refresh our skills such that we can earn a good living even as the economy evolves.
I have spent more decades than I like to record in business and policy consulting, and believe you and I met when Professor Loury and I were relatively young economists at a symposium on natural gas regulation in the 1980s. For my sins in making a career of calculating the impacts of government regulation, I have had to deal with oversimplified multiplier calculations far too often. Regrettably, that is also what I find here. First, Mr. Roscoe’s numbers fail to account for the percentage of the African-American population holding manufacturing jobs before and after deindustrialization. Without that, his contribution might shed light on effects of deindustrialization in general but not its differential effects on any particular group. Second, using multipliers as he does for an economy-wide issue like deindustrialization is a fundamental error. It fails to take into account the fact, pace the first comment, that over time the total workforce does shift from one occupation and industry to another. It is simply false that “indirect” jobs supported by US workers were cut in half or more over the period of deindustrialization, which is what his multiplier stories seem to imply. If every disastrous effect on unemployment forecasted by multiplier analysis since it came in vogue had been accurate, the only people working today would be those doing the studies.
Studies done with valid analytical methods show that deindustrialization could lead to fewer workers being employed, but far less than Mr. Roscoe’s naive multiplier analysis implies. Applying even the simplest of applied general equilibrium models -- which have become the standard in both consulting and government agencies -- to do this analysis also makes it possible to think about how to differentiate impacts on different demographic groups. For a reasonably straightforward explanation of the reason analysts have adopted the general equilibrium approach, I suggest a report done by the Science Advisory Board for the EPA on use of economic models: https://www.epa.gov/system/files/documents/2023-02/EPA-SAB-17-012_1.pdf, to which I confess to being a contributor. See in particular p. 49 which points out the failing of multiplier-type models to take into account overall resource (i.e. labor) supply.
Thanks for your comment. I appreciate the effort you put into it and will try to respond to most of your key points.
Let's start with the jobs multiplier effect. Reasonable people may disagree about the size of these effects but I hope you're not saying that there are no differences between industries. The EPI manufacturing job multipliers I quoted are lower than those from the US Department of Defense (7 to 12) and Emsi/Camoin Associates (9). Here are links:
The analysis from Emsi/Camoin also provides job multipliers for healthcare (3.5) and retail (3.2). The relative sizes of these multipliers are consistent with the differences reported by EPI.
Numbers aside, anybody who has spent time around or near a durable manufacturing facility knows they create lots of indirect jobs. They widened I-20 coming into Alabama from Georgia after the Honda plant opened in Lincoln to accommodate the increased truck traffic. You can also sense the economic impacts in places like nearby Anniston. There are more restaurants and they got a Harley-Davidson dealership a few years ago
The job multiplier effects from the the Mercedes-Benz plant in Vance extend into Birmingham.
I'm not sure how you interpreted what I wrote to imply that that the number of indirect jobs associated with manufacturing were cut in half. My point was that a loss of 6.5 million jobs over the course of more than 40 years probably cost 30 to 60 million indirect jobs over the same period if you assume a multiplier of between 5 and 7. Did other industries take up some of the slack at a national level? Yes, but spend some time in a place like Gary or Akron, whose population is down by 35% since 1960, and you can see local impacts firsthand. The abandoned buildings and homes speak for themselves. I can give you a long list of Rust Belt cities whose populations have fallen by similar or even higher percentages.
I don't understand your point about the percentages of black people who worked in manufacturing before and after deindustrialization. The population losses experienced in manufacturing towns with high percentages of black residents speak for themselves, as does the dwindling number of people who belong to private sector unions, a disproportionate percentage of whom are black. The 2022 unionization rate (10.1%) is the lowest on record and is down from 20.1% in 1983. Use this link if you want to do a deep dive. It includes information about union membership rates by race. Here's an excerpt:
Among major race and ethnicity groups, Black workers continued to have a higher union membership rate in 2022 (11.6 percent) than White workers (10.0 percent), Asian workers (8.3 percent), and Hispanic workers (8.8 percent). The union membership rate declined by 0.3 percentage point for White workers, while it increased by 0.6 percentage point for Asian workers. The union membership rates for Black workers and Hispanic workers were little different from 2021.
Here's an article from Axios and a separate analysis from EPI if you're still not convinced that manufacturing job losses black workers more than most:
It has to be repeated that deindustrialization explains a good chunk, but not all of Black America's issues.
I'm always open to new ideas and new sources of information, so feel free to provide different multipliers than the ones I cited or other evidence that suggests I'm wrong about the impacts of deindustrialization.
Thank you for your detailed response. I am not able to reply as completely as I wish I could right this morning, but will respond further this week. We have very different approaches to thinking about job markets, and I think it is the differences in those approaches that account for our differences. I will try to elaborate on that point later.
For now, lets look at your statement: “My point was that a loss of 6.5 million jobs over the course of more than 40 years probably cost 30 to 60 million indirect jobs over the same period if you assume a multiplier of between 5 and 7. Did other industries take up some of the slack at a national level?”
Precisely my point -- others clearly did. There are generational adjustments at work over 40 years. Yes, the rust belt was decimated as a region. Many workers black and white lost their jobs, and some of them never found work. Over 40 years they and their children moved away from the rust belt towns and industries. But did that reduce total employment in the U.S. by 30 to 40 million indirect jobs?
Lets look at the numbers. The total civilian labor force in 1980 was 95 million and is now 168 million; unemployment hit a low of 6.4 million in 2018, the last normal year before COVID. I do not see how you can claim there was in any sense a loss of jobs that based on your percentages would be equal to 30-40% of the 1980 labor force (or 25% of the 2018 labor force) due to indirect effects of deindustrialization. It is literally impossible for US employment to be 40 million higher than it was in 2018.
Now lets turn to the issue of African-American unemployment. BLS data indicate that African-Americans were about 9.5% of the total workforce in 1980 and about the same percentage of the manufacturing workforce. By 2018 the numbers were 12% of total workforce and 10% of manufacturing workforce. Thus the share of African-American employment stayed roughly constant in manufacturing and rose in the economy as a whole. During that period manufacturing employment in total shrank from 20 million to 13 million. So while African-American employment in manufacturing fell from 2 million to 1.3 million after 1980, it has risen from 9.5 million to 17 million in total employment. Those useful data came from the Axios study you cited. (That study agrees with you, but I believe has fatal flaws in statistical inference. Not sure when I will get back to that point).
I will return to rest of your response in a few days, right now it seems to me that an increase of 7.5 million in total employment of African-Americans swamps the national decrease of 0.7 million African-American jobs in manufacturing. I am sure there is a marginal effect because of wage differences in earnings, but not enough to be a major component. I am guessing that employment of female African-Americans may have risen while male employment fell, and interpretation of changes in employment by sex is probably also an important part of the story about the African-American family.
The macro numbers are helpful, but deindustrialization impacts more than direct jobs. Spend some time in places like Akron (rubber), Birmingham (steel), Detroit (automobiles) or Gary (steel), places with high percentages of black residents, and you can see the negative multiplier effects of lost jobs.
Birmingham has lost more than 40% of its population since 1960. Racial turmoil played a role, but you can see the impacts of lost steel jobs everywhere. Go to places like Bessemer (named after inventor Henry Bessemer, a man whose contributions revolutionized steel manufacturing) , Ensley, Fairfield, or North Birmingham and you can see the stagnation that took place when steel mills closed and/or used automation to reduce their payrolls. Businesses that used to support steel manufacturers and cater to steel workers shrank or closed. Nothing took their place. The stagnation is painfully obvious in black neighborhoods, many of which are near steel mills.
Use this link if you want to do a deep dive into Birmingham population trends:
I've spent time in Akron, Detroit, and Gary, but I won't do a deep dive for the sake of brevity. Suffice it to say that Akron's population is down by 37% since 1960. Detroit's population is down by 66% since 1950. Gary's population is down by 62% since 1960. You can see the negative multiplier effects in all of these places. You can feel the high poverty levels too (23% in Akron, 26% in Birmingham, 32% in Gary, 32% in Detroit).
Use these links if you want to do a deep dive into population trends:
It's unfair to blame all the problems in Akron, Birmingham, Detroit and Gary on deindustrialization, but it played a significant role. I could lay out similar cases for other towns with high percentages of black residents that used to be manufacturing hubs. Places like Chicago, Cleveland, Cincinnati, Dayton, Flint, Grand Rapids, Milwaukee and Toledo come immediately to mind.
One thing the macro numbers you cited don't show is the vulnerability of black workers with modest skills. A Pew Research analysis from 2022 showed that blue collar black and Hispanic workers are more likely to fall out of the middle class than their white and Asian peers. They're also less likely to move up from middle class to upper class status.
Pew didn't offer an explanation for these trends, but my guess is that many of the blue collar black and brown workers whose income trajectories were highlighted by Pew are clustered in industries that are cyclical and/or subjected to downward wage pressures. Manufacturing probably employees a fair share of them.
Even if the statistics given 'prove' that deindustrialization is the most important factor explaining Black poverty, I'd say, 'So what?' Because I don't see anything that can be done about it, and my life experience tells me that politicians will execute/install policies that will most probably not work. Even probably make matters worse; see, 'The Myth of American Inequality' by Gramm, Ekelund and Early for the details.
But, in fact, people (including Black people) have moved from one state to another when they heard about better opportunities elsewhere. The northern factory workers, many of them, came from poorer, rural, southern states. They weren't born as factory workers. They learned how to be productive in those industries. Which is the kind of adaptation to circumstances that seems to be missing now.
Thanks for your comment. I agree with most of you points, but hollowed-out former manufacturing centers won't revitalize themselves without government policies that help make them attractive places for businesses to set up shop. The alternative is to accept the sad state of places like Gary.
Well, you'd have to show me some 'hollowed-out former manufacturing centers' that have been transformed by government policies into something better than whatever profit-seeking businesses have done with them. When businesses decline opportunities for profit there is usually a politician in the background, protecting some special interest group that explains the failure.
an example would be nyc, it's easy to forget but the city was an industrial center up to the 1950,s. over time its transformed into a money/culture region, where it goes from here who knows because the financial sector has been slowly moving out to florida and such
NYC was never a big industrial center, land is too expensive due to its population density. What manufacturing it had was light manufacturing, like the garment industry. It developed publishing, entertainment, fashion, retailing, finance long before the recent decades. In the 19th century, actually.
What NYC needs today is the second coming of Rudy Giuliani. He transformed the city when he was its mayor.
light manufacturing along with shipyards and the sugar industry. it was a manufacturing powerhouse along with everything else . almost all of those jobs are gone now
to argue against it. Only two closed shipyards in New York state (Buffalo and Staten Island closed in 1958) since WWI). Many more in other states in 'C'.
My point was not to imply that government is better at business development than the private sector. Good government policies and leadership, however, are often needed in order to get the private sector to take on a major revitalization project.
Revitalizing an abandoned manufacturing site is a hit or miss proposition. Atlanta managed to find a decent replacement for the shuttered Ford assembly plant in Hapeville (down by Hartsfield-Jackson). Porsche created a "customer experience" center where the plant once sat:
I doubt that Porsche's facility employs as many people as an auto assembly plant, but it's an improvement over the old GM Doraville site north of Atlanta. It shut down around the same time. The site has been bulldozed and vacant for years. There's talk of putting a television and movie production studio on the site:
City leaders and Trump probably thought they could attract gamblers from Chicago and the rest of the region, just as Gulf Coast casinos draw people from hundreds of miles away. I don't have any insights into why things didn't work out, but my guess is that Gary's reputation for violent crime and abandoned appearance didn't help.
These are micro examples of the spotty record state and local governments have when it comes to revitalizing shuttered manufacturing sites. We agree on that basic point.
"They learned how to be productive in those industries. Which is the kind of adaptation to circumstances that seems to be missing now."
But don't you think an era rife with automation, robotics, AI, disintermediation and so forth, presents a considerably different set of challenges? Sincere question.
Of course, human beings can and will eventually figure things out--one way or another--I get that. But the emerging changes I see in economic opportunities today seem especially disruptive and unforgiving to those with the wrong skills. They seem far less of an easy fix, particularly by way of a general laissez-faire attitude.
P.S. - I 100% agree that this doesn't have to be (or shouldn't be) a racialized topic.
Automation, robotics, AI are tools that can be used to create new businesses too. The 20th century was almost a laboratory experiment in free market v. central planning economics. The planners not only lost, they were humiliated. Especially telling was how China moved into prosperity once the Maoists were dead and gone.
"Automation, robotics, AI are tools that can be used to create new businesses too..."
Yes, economic freedom certainly won the 20th century. Trust me when I say I respect where you're coming from. I became a big fan of free markets in the 90s and remain one today.
But I don't know how anyone can look at the current trajectory and think it is just another cycle.
I say that in large part due to the pace of the changes we are seeing today. I am old enough to remember when Andrew Yang was this alarmist UBI-touting longshot presidential candidate--it was three long years ago. But today, looking back, his predictions weren't alarmist at all. If anything, he was a bit optimistic.
Generative AI's likely impact on the TV, Film & Music industries isn't a simple case of periodic economic disruption. It is a core component of the current stalemate between SAG-AFTRA and the producers. AI was barely a concern to these actors, writers, etc. a year ago.
Speaking as someone who knows more than most about TV production, I can tell you right now that a producer of an animated film doesn't *really* need actors unless they have bankable names he needs to exploit for marketing purposes. It is all the result of emerging tech; very affordable tools that are revolutionizing the game unimaginably.
Yes, thousands of professional actors can find work elsewhere if necessary, just like millions of truck drivers if driverless shipping becomes the norm. And yes, as you say, we will surely see new jobs emerge out of the new norm. But enough? Soon enough? Organically? I don't see it.
Not to mention the fact that we are already living at a time when middle income folks are continually nervous about future prospects.
I honestly cannot join you in your confidence. I do not see anything like a smooth transition if we just let 'er rip. There is a major difference between a 20-year adjustment period and a 5- to 10-year adjustment period, and I think we are in for an experience.
I'm trying to understand the logic behind the job multiplier number, particularly for the examples of health care vs manufacturing, where the average pay was similar (health care slightly higher). Why the difference? Are those extra jobs productive? Are they equally well-paying? I can imagine a manufacturing plant that generates toxic waste -- there's jobs in the cleanup sector, but I'm not sure it's a net win for the local economy.
It seems a better metric would be "dollars brought into the local economy". Perhaps if I'm making a widget that's for "export" (no local use) all of my wages come in from outside. If I'm in healthcare, ultimately my customers are local and there's no dollars brought into the local economy?
How does industrial-scale farming (like here in IL) work out? We grow way more food than we eat, most of the "product" ends up for "export".
Some economists are fond of the term “Creative destruction”. But destruction in many cases does not create, but instead consolidates. The result is growth of ever larger corporations. The smaller businesses are destroyed in the process, and many jobs are lost.
A few examples:
Retail bookstores were destroyed by Amazon
Retail record stores were destroyed by Apple
Retail hardware stores were destroyed by Home Depot
Print media advertising (newspapers, magazines) were destroyed by Google
Movie theaters were destroyed by Netflix
At the 1963 March on Washington (for Jobs and Freedom), many held placards that read “We March for Jobs for All Now”.
Jobs+Families+Schools+Safety. I think these are all necessary for building a healthy, functional community.
Jobs are the foundation, and are especially important for men. Work gives one a sense of dignity and purpose. Without jobs, men don't form families. Two-parent Families are a super power, economically and psychologically. Families produce children, thus the community needs Schools. Supporting every good school are lots of healthy families, and lots of Moms and Dads. And there must be public Safety, for workplaces, schools, and families to thrive. There you have it: Jobs+Families+Schools+Safety.
If you want to destroy a community, take away the jobs. The rest naturally crumbles. Approx 70% of Americans do not have a college education. We need jobs for them. But starting in the 1990's, corporate America moved many of those jobs overseas. One of the corporate icons of this movement was (ironically) named Jobs.
https://en.wikipedia.org/wiki/March_on_Washington_for_Jobs_and_Freedom
Always enjoy Mr. Roscoe's analysis
Thanks for the kind words.
free trade as government policy surely led to a lot of this .
Since the entire conversation regarding manufacturing and deindustrialization has provoked such insightful debate, I’d like to throw out one last question to Clifton and The Glenn Show community. Recently Ford announced plans to license CATL technology for an LFP battery plant in Michigan that aroused considerable ire both from Congress and from the local residents near the proposed plant. Of course the chief complaint was that CATL was a Chinese company and obviously every Chinese company was beholden to the whims of the big, bad CCP. Likewise another Chinese company Gotion is also pushing forward with plans for a battery plant in Michigan despite similar protests.
The plants would certainly bring jobs and know-how to America, yet many seem to believe that national security interests, however vaguely articulated, trump any economic concerns. Given the Biden administration’s stated green goals, working closely with China would almost certainly make the attainment of such goals more feasible. I wonder if others are also of the belief that economic propensity should ultimately be subordinate to geopolitics.
Here we actually have an opportunity to reverse some of the hollowing out alluded to by working with China, yet it's become almost social and political suicide to say so. I fear that we're shooting ourselves in the foot in so many different ways.
Given that you clearly believe in the economic importance of manufacturing and the resulting multiplier effect as far as indirect jobs created, I would have to assume that you would support Chinese manufacturing plants in the US, Clifton. But I'm curious if that's actually the case. How would you ultimately balance the economic versus the geopolitical?
Hi Clifton, I appreciate that you brought up automation because I think it has been severely undercounted. As I understand it, initially the steel mills suffered from foreign competition, but now the big problem (for labor) is to get costs down the plants have almost no people! That seems to be the pattern, first move to cheaper labor, then to much more efficient technology. All the stats I’ve seen have indicated job losses to automation are made up for somewhere else, but that doesn’t seem right… secretaries are almost obsolete now that there are computers and men know how to use them, as are all kinds of administrative and record keeping jobs. Online ordering and kiosks have made stores and fast food have far fewer employees. Remember when you booked a vacation through a travel agency instead of online? I studied technical translation thinking that would be a good partime gig, but that is gone too. Even things like counseling and tutoring are being done by bots (or prerecorded videos) It seems like the only growing fields are drivers, construction, coding, and middle management. Am I missing something? If I’m correct, aren’t all these problems about to get much worse?
Thanks for your comment. The issue of automation began to resonate with me when I walked through a paper mill over 20 years ago. I didn't see anybody on the shop floor while rolls of paper at least 10 feet wide were being made. The final rolls were several feet in diameter. I don't know what they weighed, but my guess is at least a ton each. The machines automatically loaded a new spool after the roll on the machine was complete. I was amazed by this. I asked the guy walking me through the plant where the workers were. He told me the machines ran themselves. There was a skeleton crew available if problems arose. I could be wrong, but my guess is that paper companies pocketed the money they saved through automation instead of redirecting employees to other activities.
I was at a Walmart in metro Atlanta last year that was 100% self-checkout. The store was a mess, so I don't think the folks who used to be cashiers had been reassigned to other activities within the store. Self-checkout creates more opportunities for "shrink" so my guess is that retailers will keep trying new approaches. Walgreens opened a store in Chicago a few months ago that only has two aisles. Most of the merchandise is out of sight and not reachable by customers. You order what you want through an in-store kiosk. Walgreens employees gather and bag your purchased items for you. You pick up your bagged merchandise on your way out:
https://www.cnn.com/2023/06/09/business/walgreens-chicago-store-two-aisles/index.html
It's possible that these new technologies will be used to make workers more efficient instead of as a way to replace them but I'm skeptical. Anybody who says they know how all of this will play out is being dishonest.
I can’t help but think these dramatic technological changes are to blame for all the social/political/cultural turmoil of our time, as groups battle over who will end up with the increasingly limited resources.
I'm very amused here by the colorblind responses about how deindustrialization negatively impacted black folks. Lol!
Clifton, I’d like to throw out another question at you. You highlight the fact that foreign born workers now make up almost 18% of the civilian labor force and that more importantly immigrant communities aren’t evenly dispersed across the country. I’ve suggested elsewhere that even elite immigration from South Asia and East Asia has negative ramifications as far as social cohesion goes. Apart from possibly displacing native born workers, the children of Asian immigrants have clearly exacerbated racial disparities in academic achievement and contributed in part to pushback to neuter gifted education. For instance, the recent push in California to establish a new framework for teaching mathematics was based on data showing that between 2004-2014, roughly 32% of Asian American students were in gifted math education compared to around 8% of white, 4% of Black and 3% of Hispanic students. Don’t be fooled by the usual rhetoric about combating white supremacy. The actual data shows that the Asian/non-Asian gap is far more significant than the gap between white students on the one hand versus Black and Hispanic students on the other.
I made the argument in another thread that America has become less like a traditional nation state and more like a corporation, the goal being to do whatever necessary to maximize the output of America Inc., while sacrificing the cultural cohesion and unity necessary for a country to survive long term. I’m skeptical that Chinese or Indian immigrants in Silicon Valley feel much kinship with Black Americans living in Harlem or the south side of Chicago or for that matter with white Americans living in flyover country. Truth be told, many probably feel more kinship with their nations of origin than with many of their fellow countrymen.
Yet we’ve sort of accepted that Faustian bargain given the enormous contributions that Asian immigrants have made to STEM in America. Certainly our political and pundit classes love pushing for immigration from places like India, China or South Korea, while almost never mentioning the Black or Hispanic populations in this country as potential sources of human capital. Despite their glib assertions of politically correct orthodoxy, what does this suggest about what the intellectual class in this country really believes when it comes to race?
Given the rise of places like Taiwan or South Korea in past decades and the rise of China today, it’s not even clear that the gambit to import elite Asian immigrant labor is likely to succeed long term as far as ensuring American technological preeminence. For instance, around 90% of semiconductor and EV battery manufacturing takes place in East Asia today. I wonder if you believe that America’s penchant for importing elite immigration is still worth the social price this country pays in terms of creating such a culturally and ethnically disaggregated population.
It always seemed to me that the reason so many immigrants were high skilled (and clearly in demand) is because they were educated at someone else’s expense. When I studied engineering almost none of the graduate students were raised in America, and conventional wisdom was that if you had to pay for grad school you should not go. Coming out of school with a BS, kids were able to make significantly more than you would as a grad student by getting a job with industry (especially important with student loans). In fact, a good friend of mine was studying theoretical physics at a top physics grad school and quit a year shy of his PhD because he was tired of being poor. He aced all his actuarial exams and was making really good money in no time. It always struck me as a disconnect in what we as a society value and what we are willing to pay for.
Thanks for your comment. I've done lots of work with people from different backgrounds. It feels natural to me now. I don't remember what it was like when those experiences were new so I don't claim to know how things will play out. The one thing I've learned and try to practice daily is to treat everybody with respect. That approach consistently yields good results. That said, America is struggling to accommodate the large influx of immigrants who've arrived in a relatively short period of time. The tensions between newly arrived immigrants and existing residents who feel that their communities have been neglected is palpable in places like Chicago. I'm not sure anybody knows how to address this issue at a time when our political process is polarized and broken.
One last point: America will need highly-skilled immigrant workers for the foreseeable future. There's no way around this until our K-12 education system improves unless we're willing to accept economic stagnation for the sake of domestic harmony. That's a risky proposition at a time when we're running massive deficits, our entitlement programs are underfunded, and the national debt is at a peacetime high.
The USA doesn't exist in a vacuum. As economically powerful as we now are, don't forget that Rome was also. And Egypt. And Mesopotamia. And, China before, and China again.
We can't contemplate our navels while other places in the world are literally eating our lunch. And don't get me started on NAFTA.
"The tensions between newly arrived immigrants and existing residents who feel that their communities have been neglected is palpable in places like Chicago."
Cliff, could you elaborate on the above, or point me to one of your favorite articles/documentaries on this topic?
Sure. Here's a CBS Chicago report from a couple of months ago where residents were protesting the use of closed schools to create a "respite" center for newly arrive immigrants:
https://www.youtube.com/watch?v=z6_bdV-MvFM
Here's an article about this from the Chicago Tribune:
https://www.chicagotribune.com/news/breaking/ct-migrant-south-shore-high-school-20230505-eq7mlywqbzg4hoadcffwnccuoi-story.html
Here's a piece from ABC Chicago:
https://abc7chicago.com/chicago-migrants-in-south-shore-high-school-migrant-respite-center/13235726/
The CBS Chicago video contains footage of the emotions that were on display at a public meeting where city officials tried to explain their plans. This issue was covered extensively by Chicago news organizations.
Thanks for the response Clifton. Our pundit class so universally extols elite immigration as a virtue that no one ever bothers to question its downsides. I’m glad you’ve acknowledged the very real tensions brought about by the presence of culturally and ethnically diverse immigrant communities.
I wonder what it says about America that we need highly skilled immigration for the foreseeable future. Would one say the same about China? Foreigners contribute to a far greater proportion of American STEM than vice versa for China. It seems to me that the Chinese model is built on the cultivation of internal human capital while America’s post World War 2 preeminence has been disproportionately built on the labor of immigrants. Let’s not forget that the American space program benefited from Operation Paperclip, which moved over 1,600 or so German scientists, many of whom were former Nazis, to the United States. Prominent among such individuals was Wernher von Braun, who played a significant role in the development of the US rocket and space programs.
Yes, China has benefited significantly from overseas Chinese who have returned with the requisite skills and experience gained in the West, but by and large the people it attracts back to China are ethnic Chinese. I don’t think this fact is irrelevant. Look at our geopolitical conflict with China today and at the recently ended China Initiative, which did enormous harm as far as motivating scientists of ethnic Chinese descent to return to the mainland.
Anyway, I found it interesting that you highlighted the role that immigration has played in deindustrialization because contrary to many at this blog, I’m deeply skeptical that most of the tenets of the American model can withstand the test of time. Something has to give.
Rhetoric about equality of treatment and respect for all is good and fine, but at the end of day I think it’s undeniable that disparities become much more noticeable and intolerable when those who are disproportionately successful are of a different race and ethnicity than oneself. I find this to be a deep biological truth that can’t be wished away by verbal niceties about the United States being a proposition nation and the proverbial city on the hill.
"Something has to give."
"I find this to be a deep biological truth that can’t be wished away by verbal niceties about the United States being a proposition nation and the proverbial city on the hill."
You're anticipating a race war, Yan? If so, between who and who?
I wouldn't go so far as to say that I'm predicting a race war. I am however deeply skeptical that America can remain stable long term given its vast racial tensions. I don't see anything in the past 10 years in this country to suggest that I'm completely off the mark here, but I'm certainly open to arguments to the contrary.
I got called a Nazi for voicing my skepticism in a prior thread, but once again I wasn't presented with a compelling argument to the contrary. America has been operating under a delusion best described as liberal universalism and our intellectual class has clearly become intoxicated by its philosophical pretensions.
I don't think we are anywhere close to what you seem to be thinking.
That said, I am curious. What is the most compelling corroborating evidence you have seen? i.e., evidence that the s*** is about to hit the fan?
If you wanted something concrete, I’d imagine Korean-Black tensions in the aftermath of Rodney King but on a larger scale. Or the frequent clashes between former chancellor of education Richard Carranza and the Chinese American community in NYC. Or for that matter the crackdown against ethnic Chinese scientists per the recently ended China Initiative. Likewise Black-white tensions have been high for decades now as the aftermath of George Floyd showed.
There are plenty of ways for ethnic tensions to derail the unity of a country short of a full blown race war. I'm not sure if you've visited Japan, but I recently did for the first time and it was eye opening. Jared Taylor grew up in Japan to missionary parents and I believe his experience in that country was formative to his later views on culture and race.
Spending some time in Tokyo just makes me realize how thoroughly different America is as a country. John and Glenn frequently opine on matters related to culture and society. When it comes to topics like crime and policing or the war on drugs, Japan might as well be on Mars.
So in many respects, shit has already hit the fan. There's nothing remotely comparable in places like Japan or South Korea to what we see in our major cities like San Francisco or Portland today. I actually believe that America's culture wars and its slowly decaying social fabric will make the country less attractive to immigrants in the years ahead. Which is probably for the best, as I've argued above.
You can probably tell Charles that I've been harping on this point more strongly in the last couple of months. I think I've become afflicted with a certain sense of disillusionment and cynicism ever since I returned from Tokyo. Mostly I’m just annoyed by the fact that we can’t seem to have nice things in this country and that America seems to be in complete disarray. It’s always just the same tired old talking points while nothing ever really changes.
I guess I resent living in a country where I have to be careful whenever I’m walking around at night or taking the subway given that I’m in Manhattan and where people openly drug deal and inject right down the block from where I live. Americans are so fucking deluded if they think this is just life in the big city or that’s just how you would expect things to be in society. I guess we can drown in our delusions and philosophical pretensions.
There's no doubt that America leveraged immigrant talent after World War II. NASA got a major intellectual shot in the arm from German scientists. The Von Braun Center in Huntsville, AL is named after one of the German scientists who helped NASA develop rockets at the Redstone Arsenal in Huntsville, AL.
Correct me if I'm wrong, but my understanding is that China received a huge infusion of intellectual property and capital when they required multinational companies that wanted to do business in China to set up shop there and to partner with local companies. I don't want to minimize the quality of China's educational system, but it seems that foreigners helped drive many of their economic and intellectual advancements.
I’m certainly no expert on economic history, but I agree that forced technology transfers and even outright theft has played some role in China’s rise. However, given that China was near the bottom of global science after the end of the Cultural Revolution, such actions aren’t necessarily unique given its latecomer status. For instance, I know that many have drawn a parallel between China today and American economic espionage directed against the British textile industry in past centuries.
What might be worth pointing out is the extent to which such claims can be exaggerated, even though such actions undoubtedly do exist. For instance, the FBI frequently asserts that IP theft by China amounts to between $225-$600 billion annually. Yet journalist Mara Hvistendahl argued in her recent book The Scientist and the Spy that the figure was essentially made up. Nonetheless it’s become one of the most widely cited talking points, including by Donald Trump.
What is different between China and the US in my opinion is that a far greater percentage of STEM workers in America are foreign born compared to vice versa in China. At many of our leading tech companies for instance, anywhere between 40-60% of workers in technical areas are South Asian or East Asian. Ironically, this makes the conversation about China benefiting from “Western” technology all the more interesting because in some cases that technology was the result of Asian or Chinese immigrant labor.
We can look up the demographics at leading Chinese tech companies or in Chinese science labs today, but I’d venture a guess that the proportion of Chinese born workers is far higher in those fields compared to the percentage in the US. Again, I bring this up because you’ve highlighted immigration and globalization as destabilizing factors affecting the American middle class. I’m of the belief that the Chinese model is more sustainable long term.
I don’t believe that Black Americans or Americans more generally can fix our problems by appealing to structural inequities and expecting some sort of deus ex machina to remedy our maladies. The hollowing out of manufacturing is surely in part the result of misguided or shortsighted policy, but I think we should also seriously consider the role that education, training and the general cultivation of skills and values play in the emergence of global trends in high tech manufacturing. The recent brouhaha over TSMC's Arizona plant is a good case in point.
As I noted above, Morris Chang realized even decades ago that TI’s Japanese factories were more productive than its American ones. Anyone who thinks that Chinese companies like CATL dominate the EV battery sector today because of cheap labor as opposed to the preeminence of its engineering R&D is most likely deluded in my opinion.
Is the hollowing out of manufacturing ultimately a cause or an effect of deeper underlying differences in accumulated skills and values?
Asians are responsible for the Spanish flu and Wuhan flu which have killed millions worldwide, including my younger brother and sister. African Americans were significant in helping to develop vaccines against the Wuhan flu.
"Asians are responsible for the Spanish flu and Wuhan flu"
This is patently false.
https://www.nationalgeographic.com/adventure/article/140123-spanish-flu-1918-china-origins-pandemic-science-health
Lol, proves nothing, it originated in America, in Kansas, this is well known. You are positing someone's theory as fact because it fits into your China angst.
What are you posting? Baseless feelings? Lol! Sentimentality is a child distracting you while another one is picking your pockets.
If thats what you have to tell yourself
Prove it!
Without the U.S. military presence, there would be no South Korea or Taiwan as we know it today.
With the cost of labor wages and benefits in this country, deindustrialization would hardly seem to have been preventable. They used to say GM was a health insurance company that assembled some cars - that's not sustainable in an industry that has competitors that don't have to play by those same rules, and we know what happened to GM.
I had a manufacturing facility in Compton and Watts California for over 50 years. Hispanic to black requests for employment applications ran about 200 to 1.
That is where I learned that you could graduate from the local high school without learning to read. We had about 5 white applicants. They were either hopeless alcoholics or were accompanied by a probation officer. We did hire 2 Asians. One came from Nellis School for Boys in Whittier. (Local reform school)
His first day at Nellis he met with a counselor, who was also Japanese. The counselor told him if he didn't straighten up he would kill him, rather than let his disgrace race. Seem to work.
Holy cow, this was insightful.
"Holy cow? " I haven't heard that expression since *Goober* expressed it in the fictitious city of Mayberry. Lol!!!!
Thanks for the kind words!
You overlook trade policy as a factor, or, perhaps you buried it under Government Policies. The deindustrialization was heavily influenced by the flood of cheaper, substitute, products we imported from the Far East. American manufacturers have been under tremendous pressure to produce goods at low prices since imports were able to undercut them. The only way to do that was to utilize cheap foreign labor to do so. Then, of course, as expected, those foreign manufacturers have been the primary source of innovation for those aging, but necessary products.
I will also agree that immigration has had a profound effect. Not only do the immigrants take the jobs that still exist in US manufacturing, but they tend to suppress wage growth due to the supply of labor. Personally, I’ve been amazed at how many Vietnamese, Cambodian, and Chinese families have come, one after another, through chain migration, to the factory where I used to work.
One last point. The unnecessary and counterproductive emphasis the US has placed on college education has distracted the Black population, especially those with lower income, from obtaining more valuable skills in the trades. Thanks to college practices of charging higher income families to pay, not only for their own kids, but also for the tuition of low income students (through obscenely high tuition), many Black families are romanced into the idea of a free (or very low cost) college education for their kids. It would be interesting to study the success of Black students engaged in the trades (after brief training, post high school, or even during high school), relative to those who go into the college ranks, only to drop out before graduation.
it's a valid point , and i would go further that the skills earned give that person not just a way to make money but the ability to help friends and family .
Thanks for your comment. I agree with your point about trade policy. I could have been more explicit in spelling out its impacts. Clyde Prestowitz does a good job of this with his book, "The Betrayal of American Prosperity." One of the big takeaways from the book is that American leaders often use trade as a foreign policy tool without appreciating the negative economic impacts back home.
There's a debate to be had about the value of college. Ben Wildavsky argues in this recent NY Times essay ("Let's Stop Pretending That College Degrees Don't Matter") that college degrees provide advantages in the labor market despite efforts by employers and politicians to reduce the number of jobs that require degrees:
https://www.nytimes.com/2023/08/21/opinion/skills-based-hiring-college-degree-job-market-wage-premium.html
One of the issues for black college graduates is that so many of them are clustered in majors that don't pay well. Georgetown's Center for Education and the Workforce (CEW) issued a report about this several years ago:
https://cew.georgetown.edu/cew-reports/african-american-majors/
They've also ranked 4,500 colleges and universities in terms of the values (ROI) of their degrees:
https://cew.georgetown.edu/cew-reports/roi2022/
Suffice it to say that all colleges and all majors don't create equal value in the labor market. These things should influence the way we think about college.
I majored in sociology and worked for CDC&R for 34 years. Now, I live in an 8,000-square-foot home with a vacation home on the beach. My ex-brother-in-law, with only a high school diploma, and a corrections officer, managed to purchase a 2 million dollar home for which he sold double what he originally paid. A college degree isn't needed to become a millionaire.
Having no real knowledge of the semiconductor sector, I was surprised to learn the extent to which technicians with community college level education are a part of the foundry ecosystem at many of the leading fabs in places like Taiwan. There’s a misconception that semiconductor manufacturing is all about engineers with advanced degrees and while those roles certainly are an important part of the sector, there's also a huge demand for people with skills in the trades.
The recent brouhaha over TSMC's Arizona plant highlights many of the deficiencies of the current US system. America is very good at educating the best and the brightest and if those individuals aren’t to be found among the native born population in sufficient numbers, it’s very good at importing them from places like India or South Korea or China. I believe that the countries of East Asia do a much better job of inculcating skills and values among a much broader portion of the population.
Ultimately, I think we should draw a distinction between high tech manufacturing where training, education and technical know-how matter significantly versus the more traditional notion of manufacturing as a lower skilled job type where cheap labor is the predominant factor. Personally I’ve been interested in not only the geopolitical battle between the US and China, but also the greater shift of high tech manufacturing to East Asia as a whole. For instance, China, Japan and South Korea control between 90-95% of the entire EV battery sector and there’s a very real possibility that many of the high tech industries of the future will reside in that part of the world. What does that portend for the United States in the decades to come?
It certainly feels like the US is charging towards a future where the people at the top will be fine but where the vast core of the middle class will essentially be hollowed out.
You are very correct in this observation. German engineering has long been respected for its precision and quality. The German education system is kind of a merit based dream, where the lowest “educated” tradesmen start apprenticeships early and spend many years learning the trade fully. As far as engineering goes there are at least three paths that are more or less hands on vs theoretical, here those are all lumped together (though some schools offer engineering technology which is more hands on, they teach welding for example). Because the German system does a good job of tracking people by aptitude, they are able effectively make use of skilled labor. Here is much more luck of the draw.
I'm not familiar with the details but I had always read that countries like Japan and Germany do a much better job when it comes to vocational training. There's something deeply flawed with the American education system in my opinion.
Here's my controversial take. Racial homogeneity makes it easier for countries like Japan and Germany to implement ability tracking and to push for vocational training compared to the US because the latter exhibits a much clearer racial divide when such policies are implemented. So rather than adopting sane policies, we just argue endlessly over the racial composition at our most elite institutions like Harvard or Stuyvesant.
Well, I think Germany has some race issues as well. For decades it has been Turks, but German has a strong culture and public schools are specifically tasked with teaching children to be “German” with strong German social values. And over a generation or two, the ethnic differences shrink. I don’t think America does that (actively). There are critics who would call that forced assimilation, but it seems to be necessary for a harmonious society.
I don’t know if you remember this, but when there was that wave of Syrian immigrants in Europe one New Year’s Eve there were a wave of sexual assaults in Cologne (I think) and all of Germany had a huge reaction. It is normally very safe for a woman to go anywhere alone at any time without fear of assault in Germany. There was an increase of anti-immigrant sentiment afterwords. I say all this to suggest that it isn’t just multiculturalism, as how well the cultures overlap and assimilate. It gets tricky because it sounds like you are saying that one culture is superior, which I am not, just that some are more compatible.
I do remember when Germany let in over 1 million Syrian refugees in 2015 in the aftermath of the civil war in Syria and I recall the sexual assaults on New Year's eve in Cologne. It seems though that the Germans learned their lesson and I don’t recall there being such a massive influx of immigrants since.
Germany might be more multiracial than my initial comment implied, but I checked Wikipedia and the population is still about 86% European, which I would argue is far more homogenous compared to the US today. For instance, prior to the immigration act of 1965, America was around 85% non-Hispanic white. When I was in Berlin in 2019, I distinctly recall thinking to myself that it was far less multicultural compared to cities like London.
That being said, I do agree that European countries do a better job of teaching their citizens to eschew the perils of racial identity and I believe France is known for this. My understanding is that officially the French government doesn’t collect statistics by race because people are taught to view themselves first and foremost as Frenchmen.
As far as culture, I’m certainly suggesting that cultures can be incompatible, hence my appeals to homogeneity. As far as superiority, I think Glenn and John or Thomas Sowell would all agree that certain values and attitudes are far more conducive than others when it comes to achieving success.
Of course you are correct that Germany is significantly less diverse than the US. I don’t know if racial identities are less, or just that the society actively instills a larger cultural identity. What would be our cultural identity? I bet if you ask 100 Americans, you’d get many different answers. In Germany, “to be German” would, I think, have a lot more agreement. I think we *could* do that here, but it’d be hard to get agreement on the vision.
Could the hollowing out be by design? Or merely an unintended consequence of a poorly thought out strategy?
I always find anything Mr. Roscoe writes to be thoughtful and well-researched. It is hard to argue with his data; the multiplier effects seem impressive in their inexorability. I have always thought that the lack of well-paying jobs for those with a modest education was problematic after the brief period of halcyon days following World War II. But I have heard some refer to this group., both black and white as essentially an artificial middle class whose days were numbered from early on. Are there any policy recommendations or approaches that we can take from all this that might have the effect of making things better? College for all is a pipedream and when everyone is "college-ready," what we will see will be little more than the thirteenth grade. I do not see any obvious way out of this.
Thanks for the kind words.
The rate of change within the global economy is accelerating. Fewer and fewer workers can expect to work for one company or in one industry for most of their careers. The challenge for all of us is to refresh our skills such that we can earn a good living even as the economy evolves.
I have spent more decades than I like to record in business and policy consulting, and believe you and I met when Professor Loury and I were relatively young economists at a symposium on natural gas regulation in the 1980s. For my sins in making a career of calculating the impacts of government regulation, I have had to deal with oversimplified multiplier calculations far too often. Regrettably, that is also what I find here. First, Mr. Roscoe’s numbers fail to account for the percentage of the African-American population holding manufacturing jobs before and after deindustrialization. Without that, his contribution might shed light on effects of deindustrialization in general but not its differential effects on any particular group. Second, using multipliers as he does for an economy-wide issue like deindustrialization is a fundamental error. It fails to take into account the fact, pace the first comment, that over time the total workforce does shift from one occupation and industry to another. It is simply false that “indirect” jobs supported by US workers were cut in half or more over the period of deindustrialization, which is what his multiplier stories seem to imply. If every disastrous effect on unemployment forecasted by multiplier analysis since it came in vogue had been accurate, the only people working today would be those doing the studies.
Studies done with valid analytical methods show that deindustrialization could lead to fewer workers being employed, but far less than Mr. Roscoe’s naive multiplier analysis implies. Applying even the simplest of applied general equilibrium models -- which have become the standard in both consulting and government agencies -- to do this analysis also makes it possible to think about how to differentiate impacts on different demographic groups. For a reasonably straightforward explanation of the reason analysts have adopted the general equilibrium approach, I suggest a report done by the Science Advisory Board for the EPA on use of economic models: https://www.epa.gov/system/files/documents/2023-02/EPA-SAB-17-012_1.pdf, to which I confess to being a contributor. See in particular p. 49 which points out the failing of multiplier-type models to take into account overall resource (i.e. labor) supply.
Thanks for your comment. I appreciate the effort you put into it and will try to respond to most of your key points.
Let's start with the jobs multiplier effect. Reasonable people may disagree about the size of these effects but I hope you're not saying that there are no differences between industries. The EPI manufacturing job multipliers I quoted are lower than those from the US Department of Defense (7 to 12) and Emsi/Camoin Associates (9). Here are links:
https://www.defense.gov/News/News-Stories/Article/Article/3189049/us-manufacturing-ecosystem-key-to-economic-growth-innovation-competitiveness/
https://camoinassociates.com/resources/the-multiplier-effect-which-industries-are-the-biggest-job-creators/
The analysis from Emsi/Camoin also provides job multipliers for healthcare (3.5) and retail (3.2). The relative sizes of these multipliers are consistent with the differences reported by EPI.
Numbers aside, anybody who has spent time around or near a durable manufacturing facility knows they create lots of indirect jobs. They widened I-20 coming into Alabama from Georgia after the Honda plant opened in Lincoln to accommodate the increased truck traffic. You can also sense the economic impacts in places like nearby Anniston. There are more restaurants and they got a Harley-Davidson dealership a few years ago
The job multiplier effects from the the Mercedes-Benz plant in Vance extend into Birmingham.
I'm not sure how you interpreted what I wrote to imply that that the number of indirect jobs associated with manufacturing were cut in half. My point was that a loss of 6.5 million jobs over the course of more than 40 years probably cost 30 to 60 million indirect jobs over the same period if you assume a multiplier of between 5 and 7. Did other industries take up some of the slack at a national level? Yes, but spend some time in a place like Gary or Akron, whose population is down by 35% since 1960, and you can see local impacts firsthand. The abandoned buildings and homes speak for themselves. I can give you a long list of Rust Belt cities whose populations have fallen by similar or even higher percentages.
I don't understand your point about the percentages of black people who worked in manufacturing before and after deindustrialization. The population losses experienced in manufacturing towns with high percentages of black residents speak for themselves, as does the dwindling number of people who belong to private sector unions, a disproportionate percentage of whom are black. The 2022 unionization rate (10.1%) is the lowest on record and is down from 20.1% in 1983. Use this link if you want to do a deep dive. It includes information about union membership rates by race. Here's an excerpt:
https://www.bls.gov/news.release/union2.nr0.htm
Among major race and ethnicity groups, Black workers continued to have a higher union membership rate in 2022 (11.6 percent) than White workers (10.0 percent), Asian workers (8.3 percent), and Hispanic workers (8.8 percent). The union membership rate declined by 0.3 percentage point for White workers, while it increased by 0.6 percentage point for Asian workers. The union membership rates for Black workers and Hispanic workers were little different from 2021.
Here's an article from Axios and a separate analysis from EPI if you're still not convinced that manufacturing job losses black workers more than most:
https://www.axios.com/2022/02/01/black-workers-manufacturing-globalization
https://www.epi.org/publication/botched-policy-responses-to-globalization/
It has to be repeated that deindustrialization explains a good chunk, but not all of Black America's issues.
I'm always open to new ideas and new sources of information, so feel free to provide different multipliers than the ones I cited or other evidence that suggests I'm wrong about the impacts of deindustrialization.
Thank you for your detailed response. I am not able to reply as completely as I wish I could right this morning, but will respond further this week. We have very different approaches to thinking about job markets, and I think it is the differences in those approaches that account for our differences. I will try to elaborate on that point later.
For now, lets look at your statement: “My point was that a loss of 6.5 million jobs over the course of more than 40 years probably cost 30 to 60 million indirect jobs over the same period if you assume a multiplier of between 5 and 7. Did other industries take up some of the slack at a national level?”
Precisely my point -- others clearly did. There are generational adjustments at work over 40 years. Yes, the rust belt was decimated as a region. Many workers black and white lost their jobs, and some of them never found work. Over 40 years they and their children moved away from the rust belt towns and industries. But did that reduce total employment in the U.S. by 30 to 40 million indirect jobs?
Lets look at the numbers. The total civilian labor force in 1980 was 95 million and is now 168 million; unemployment hit a low of 6.4 million in 2018, the last normal year before COVID. I do not see how you can claim there was in any sense a loss of jobs that based on your percentages would be equal to 30-40% of the 1980 labor force (or 25% of the 2018 labor force) due to indirect effects of deindustrialization. It is literally impossible for US employment to be 40 million higher than it was in 2018.
Now lets turn to the issue of African-American unemployment. BLS data indicate that African-Americans were about 9.5% of the total workforce in 1980 and about the same percentage of the manufacturing workforce. By 2018 the numbers were 12% of total workforce and 10% of manufacturing workforce. Thus the share of African-American employment stayed roughly constant in manufacturing and rose in the economy as a whole. During that period manufacturing employment in total shrank from 20 million to 13 million. So while African-American employment in manufacturing fell from 2 million to 1.3 million after 1980, it has risen from 9.5 million to 17 million in total employment. Those useful data came from the Axios study you cited. (That study agrees with you, but I believe has fatal flaws in statistical inference. Not sure when I will get back to that point).
I will return to rest of your response in a few days, right now it seems to me that an increase of 7.5 million in total employment of African-Americans swamps the national decrease of 0.7 million African-American jobs in manufacturing. I am sure there is a marginal effect because of wage differences in earnings, but not enough to be a major component. I am guessing that employment of female African-Americans may have risen while male employment fell, and interpretation of changes in employment by sex is probably also an important part of the story about the African-American family.
Thanks for your thoughtful comment.
The macro numbers are helpful, but deindustrialization impacts more than direct jobs. Spend some time in places like Akron (rubber), Birmingham (steel), Detroit (automobiles) or Gary (steel), places with high percentages of black residents, and you can see the negative multiplier effects of lost jobs.
Birmingham has lost more than 40% of its population since 1960. Racial turmoil played a role, but you can see the impacts of lost steel jobs everywhere. Go to places like Bessemer (named after inventor Henry Bessemer, a man whose contributions revolutionized steel manufacturing) , Ensley, Fairfield, or North Birmingham and you can see the stagnation that took place when steel mills closed and/or used automation to reduce their payrolls. Businesses that used to support steel manufacturers and cater to steel workers shrank or closed. Nothing took their place. The stagnation is painfully obvious in black neighborhoods, many of which are near steel mills.
Use this link if you want to do a deep dive into Birmingham population trends:
https://www.biggestuscities.com/city/birmingham-alabama
I've spent time in Akron, Detroit, and Gary, but I won't do a deep dive for the sake of brevity. Suffice it to say that Akron's population is down by 37% since 1960. Detroit's population is down by 66% since 1950. Gary's population is down by 62% since 1960. You can see the negative multiplier effects in all of these places. You can feel the high poverty levels too (23% in Akron, 26% in Birmingham, 32% in Gary, 32% in Detroit).
Use these links if you want to do a deep dive into population trends:
https://www.biggestuscities.com/city/akron-ohio
https://www.biggestuscities.com/city/detroit-michigan
https://www.biggestuscities.com/city/gary-indiana
Use these links if you want to do deep dives into poverty numbers:
https://www.census.gov/quickfacts/fact/table/akroncityohio/PST045222
https://www.census.gov/quickfacts/fact/table/birminghamcityalabama/PST045222
https://www.census.gov/quickfacts/fact/table/detroitcitymichigan/PST045222
https://www.census.gov/quickfacts/fact/table/garycityindiana/PST045222
It's unfair to blame all the problems in Akron, Birmingham, Detroit and Gary on deindustrialization, but it played a significant role. I could lay out similar cases for other towns with high percentages of black residents that used to be manufacturing hubs. Places like Chicago, Cleveland, Cincinnati, Dayton, Flint, Grand Rapids, Milwaukee and Toledo come immediately to mind.
One thing the macro numbers you cited don't show is the vulnerability of black workers with modest skills. A Pew Research analysis from 2022 showed that blue collar black and Hispanic workers are more likely to fall out of the middle class than their white and Asian peers. They're also less likely to move up from middle class to upper class status.
Pew didn't offer an explanation for these trends, but my guess is that many of the blue collar black and brown workers whose income trajectories were highlighted by Pew are clustered in industries that are cyclical and/or subjected to downward wage pressures. Manufacturing probably employees a fair share of them.
Here's a link for the Pew analysis:
https://www.pewresearch.org/short-reads/2022/05/10/black-and-hispanic-americans-those-with-less-education-are-more-likely-to-fall-out-of-the-middle-class-each-year/
Thanks again for your comment and insights!
Even if the statistics given 'prove' that deindustrialization is the most important factor explaining Black poverty, I'd say, 'So what?' Because I don't see anything that can be done about it, and my life experience tells me that politicians will execute/install policies that will most probably not work. Even probably make matters worse; see, 'The Myth of American Inequality' by Gramm, Ekelund and Early for the details.
But, in fact, people (including Black people) have moved from one state to another when they heard about better opportunities elsewhere. The northern factory workers, many of them, came from poorer, rural, southern states. They weren't born as factory workers. They learned how to be productive in those industries. Which is the kind of adaptation to circumstances that seems to be missing now.
Thanks for your comment. I agree with most of you points, but hollowed-out former manufacturing centers won't revitalize themselves without government policies that help make them attractive places for businesses to set up shop. The alternative is to accept the sad state of places like Gary.
Well, you'd have to show me some 'hollowed-out former manufacturing centers' that have been transformed by government policies into something better than whatever profit-seeking businesses have done with them. When businesses decline opportunities for profit there is usually a politician in the background, protecting some special interest group that explains the failure.
an example would be nyc, it's easy to forget but the city was an industrial center up to the 1950,s. over time its transformed into a money/culture region, where it goes from here who knows because the financial sector has been slowly moving out to florida and such
NYC was never a big industrial center, land is too expensive due to its population density. What manufacturing it had was light manufacturing, like the garment industry. It developed publishing, entertainment, fashion, retailing, finance long before the recent decades. In the 19th century, actually.
What NYC needs today is the second coming of Rudy Giuliani. He transformed the city when he was its mayor.
light manufacturing along with shipyards and the sugar industry. it was a manufacturing powerhouse along with everything else . almost all of those jobs are gone now
I don't think there is evidence to support your contention. For instance I read this source on shipbuilding:
https://shipbuildinghistory.com/shipyards/large.htm
to argue against it. Only two closed shipyards in New York state (Buffalo and Staten Island closed in 1958) since WWI). Many more in other states in 'C'.
My point was not to imply that government is better at business development than the private sector. Good government policies and leadership, however, are often needed in order to get the private sector to take on a major revitalization project.
Revitalizing an abandoned manufacturing site is a hit or miss proposition. Atlanta managed to find a decent replacement for the shuttered Ford assembly plant in Hapeville (down by Hartsfield-Jackson). Porsche created a "customer experience" center where the plant once sat:
https://www.porschedriving.com/atlanta/facilities-venue
I doubt that Porsche's facility employs as many people as an auto assembly plant, but it's an improvement over the old GM Doraville site north of Atlanta. It shut down around the same time. The site has been bulldozed and vacant for years. There's talk of putting a television and movie production studio on the site:
https://www.fox5atlanta.com/news/doraville-approves-plans-for-old-gm-plant-to-become-states-largest-studio
Gary tried to partner with Trump to build a casino. It flopped and went bankrupt within about 10 years:
https://www.businessinsider.com/trumps-spotty-casino-history-in-gary-indiana-2016-9?op=1
City leaders and Trump probably thought they could attract gamblers from Chicago and the rest of the region, just as Gulf Coast casinos draw people from hundreds of miles away. I don't have any insights into why things didn't work out, but my guess is that Gary's reputation for violent crime and abandoned appearance didn't help.
These are micro examples of the spotty record state and local governments have when it comes to revitalizing shuttered manufacturing sites. We agree on that basic point.
"They learned how to be productive in those industries. Which is the kind of adaptation to circumstances that seems to be missing now."
But don't you think an era rife with automation, robotics, AI, disintermediation and so forth, presents a considerably different set of challenges? Sincere question.
Of course, human beings can and will eventually figure things out--one way or another--I get that. But the emerging changes I see in economic opportunities today seem especially disruptive and unforgiving to those with the wrong skills. They seem far less of an easy fix, particularly by way of a general laissez-faire attitude.
P.S. - I 100% agree that this doesn't have to be (or shouldn't be) a racialized topic.
Automation, robotics, AI are tools that can be used to create new businesses too. The 20th century was almost a laboratory experiment in free market v. central planning economics. The planners not only lost, they were humiliated. Especially telling was how China moved into prosperity once the Maoists were dead and gone.
"Automation, robotics, AI are tools that can be used to create new businesses too..."
Yes, economic freedom certainly won the 20th century. Trust me when I say I respect where you're coming from. I became a big fan of free markets in the 90s and remain one today.
But I don't know how anyone can look at the current trajectory and think it is just another cycle.
I say that in large part due to the pace of the changes we are seeing today. I am old enough to remember when Andrew Yang was this alarmist UBI-touting longshot presidential candidate--it was three long years ago. But today, looking back, his predictions weren't alarmist at all. If anything, he was a bit optimistic.
Generative AI's likely impact on the TV, Film & Music industries isn't a simple case of periodic economic disruption. It is a core component of the current stalemate between SAG-AFTRA and the producers. AI was barely a concern to these actors, writers, etc. a year ago.
Speaking as someone who knows more than most about TV production, I can tell you right now that a producer of an animated film doesn't *really* need actors unless they have bankable names he needs to exploit for marketing purposes. It is all the result of emerging tech; very affordable tools that are revolutionizing the game unimaginably.
Yes, thousands of professional actors can find work elsewhere if necessary, just like millions of truck drivers if driverless shipping becomes the norm. And yes, as you say, we will surely see new jobs emerge out of the new norm. But enough? Soon enough? Organically? I don't see it.
Not to mention the fact that we are already living at a time when middle income folks are continually nervous about future prospects.
I honestly cannot join you in your confidence. I do not see anything like a smooth transition if we just let 'er rip. There is a major difference between a 20-year adjustment period and a 5- to 10-year adjustment period, and I think we are in for an experience.
Your problem will be in coming up with a solution that is superior to, "let 'er rip". I'm unaware of any such.
That is the dilemma indeed.