Manufacturing Draws Cheers, But Faces Conundrum

Advanced manufacturing industries and techniques appeal to those hoping to strengthen the United States’ industrial base, but they may not mean salvation for the middle class.

 

On June 24 at Carnegie Mellon University in Pittsburgh, President Obama announced the Advanced Manufacturing Partnership program, which will bring together leaders of academia and private industry, and sprinkle them with government funding to “support the creation of good jobs by helping U.S. manufacturers reduce costs, improve quality, and accelerate product development.”

Sounds like a well-intentioned effort to encourage the type of manufacturing that befits a world-leading economy.

“If we want a robust, growing economy,” Obama told the crowd, “we need a robust, growing manufacturing sector.”

Manufacturing’s supporters have been saying as much for years. Now the rest of the country has digested the news that Internet stocks and rampant homebuilding are not, in fact, the keys to economic prosperity, and they’ve begun to join the chorus touting manufacturing’s virtues.

But the President also hit on a conundrum, whether he meant to or not.

In his Carnegie Mellon speech, he said, “Companies have learned to become more efficient, with fewer employees. In Pittsburgh, you know this as well as anybody. Steel mills that once needed a thousand workers now do the same work with a hundred. While these changes have resulted in great wealth for some Americans, and drastically increased productivity, they’ve also caused major disruptions for many others.”

The Advanced Manufacturing Partnership (AMP) initiative is intended to counteract those diminishing forces by boosting America’s prowess in emerging manufacturing sectors, including nanotech, biotech, green energy, and information technology. Retraining workers for jobs in those industries will keep the manufacturing base healthy, the thinking goes.

But it butts up against another AMP mission, which is to boost efficiency. “How do we do things better, faster, cheaper, [and] design and manufacture superior products that allow us to compete all over the world?” the President asked.

That’s where two forces collide: operational excellence on the one hand, and manufacturing employment on the other. If we strive to manufacture better, faster, and cheaper, can we truly expect to restore the manufacturing employment base that once formed the bulk of our middle class?

Consider that the President delivered his AMP speech after touring Carnegie Mellon’s National Robotics Engineering Center, and that he lauded the virtues of robots during his speech. As translated, “better, faster, cheaper” may mean jobs for robots instead of people. We need only look at the auto industry to understand the effects on a workforce when a quest for operational efficiency combines with advanced robotics. It can kill jobs instead of creating them.

So, are we speaking with a forked tongue when we trumpet advances in operational efficiency while also promising to revitalize manufacturing employment?

Is it time we came to grips with a smaller manufacturing workforce, and, with it, a smaller middle class?

What do you think?

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7 Comments

  1. Posted July 5, 2011 at 1:54 pm | Permalink

    I have told people for several years that if you watch popular tv shows like “How it’s made” you can see that not all our manufacturing jobs have been exported. A great many have been eliminated by automation. Efficiency in manufacturing sounds great but who will we sell the products to if no one has a job. Balance is needed. The only way I can see to reach a balance is for the government to get out of the social engineering business. Eliminate minimum wage would be a first step. I cringe when politicians use the phrase “good job”. To use the phrase is like hanging a sign around one’s neck that reads “Idiot “. Not every person is qualified to hold any job but the less qualified needs a job to. Being on unemployment (a government job is you want to look at it that way) is not good for the individual or the nation. Less snobbery from our elected leaders would be appreciated.

  2. Bryan Hord
    Posted July 8, 2011 at 8:57 pm | Permalink

    Isn’t this the same argument that was started in the Netherlands in the15th century? People were throwing their wooden shoes into the cogs of the new, more efficient machines because they feared that the machines would take away their jobs.

    They did lose a lot of jobs and their economy grew. Other people made money supplying or maintaining or designing the machines. These were windmills remember. What happened to the original textile workers though? I am nor sure that you can protect job loss from innovation.

  3. Posted July 11, 2011 at 6:15 pm | Permalink

    Perhaps it’s a matter of scale. Not all products require a gigantic factory to be made efficiently. 787s need big spaces and thousands of people, shoes do not. If very small businesses could get their hands on low cost equipment, moms & pops could rise again. Solar panel assembly is a favorite example. It does not take robots to make PV modules although that is what you must do if you have a lot of overhead to cover.

    Very small manufacturing businesses, using the right tools, can compete because they (mom & pop) are immensely efficient especially compared to their mammoth cousins. If we were to build co-op supply chains and foster entrepreneurship, we might bypass the conundrum.

    Pat Gallagher
    President
    Solar Automation Inc.

  4. John B.
    Posted July 11, 2011 at 7:22 pm | Permalink

    It takes innovators to reemploy a workforce after a recession. This is necessary because the same forces that brought about the recession in the first place will keep the economy from restoring things to the same state that existed before the recession. You just can’t go back to the way things were before. Recessions can be healthy as they bring discipline. They are symptom of the fact that you can’t do more and more of the same thing forever. You have to innovate. We won’t go back to full employment until we start doing and producing things differently, in a way that brings evolutionary improvement. We can do this. It’s not like we’ve run out of problems to solve.

  5. Posted July 12, 2011 at 9:10 am | Permalink

    If it ain’t broken, break it. If you don’t, someone will do it for you. Regarding: “As translated, “better, faster, cheaper” may mean jobs for robots instead of people.”
    … 1. except, of course, for the people that design, manufacture, and maintain the robots and those that develop the software that runs them, etc.- which will require more of our young to pursue careers in applied sciences (easier said than done) AND/OR attract foreign talent (other countries’ brain-drain; a trend that benefited the USA in the past and it is now stalling) – And those jobs do not count the people that build the physical plants where the robots are created, and the machines and tools to build them, and all the ancillary services for those people and their families (from food to hair cuts to everything else): yes! all of them will be the people that can buy things…
    …2. If the USA does NOT become Better Faster Cheaper, someone else will (or already is!) and MORE jobs will be lost as manufacturing plants migrate elsewhere.
    …3. If the USA DOES become B,F,C, in addition to remaining competitive, it will become attractive for more companies to manufacture here, thus creating new entities and jobs.
    In summary: to be competitive, we need to be better, cheaper or both. Here is the ultimate example of this: in addition to everything else we buy from China, we are now importing a span to the San Francisco Bay bridge, made in China because it costs less to do it there and ship it to the USA than to manufacture it here… and the building of the span in China are real jobs that could have been created here if WE were Better, Cheaper or both!
    http://www.nytimes.com/2011/06/26/business/global/26bridge.html

  6. Posted October 11, 2011 at 8:47 am | Permalink

    I just read a piece on McKinsey’s website that speaks to this dichotomy. The author, W. Brian Arthur, posits that a “second economy” exists beneath the one we see — a digital economy conducted entirely by servers and satellites and software. The growth of this second economy imperils the health of the economy we humans know so well. Arthur writes:

    Physical jobs are disappearing into the second economy, and I believe this effect is dwarfing the much more publicized effect of jobs disappearing to places like India and China.

    More food for thought…

  7. Posted October 24, 2011 at 8:54 am | Permalink

    A study out of MIT has surfaced some of the same concerns detailed in this blog. Automation and operational excellence have exacerbated the effects of this Great Recession. Quoting the Times piece:

    “Many workers, in short, are losing the race against the machine,” the authors write.

    Here’s the link, for those who are interested: http://www.nytimes.com/2011/10/24/technology/economists-see-more-jobs-for-machines-not-people.html?_r=1&hp

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