offshoring Automation and a shift towards service jobs have all played a part in killing manufacturing jobs the number of people actually making stuff for a living is down by over a third in the same time the workforce as a whole has grown by 50% not too long ago this was actually seen as positive progress Blue Collar manufacturing jobs are dangerous harder on your body and all around seen as inferior to working in a nice air conditioned office contributing to the all-encompassing service sector but that's all started to change people have realized that manufacturing jobs can
earn more than white collar work and it's become a desirable career all over again elections are being won or lost over the promise of creating manufacturing jobs and billions of dollars are being handed out to companies to make it happen but the trend is not our friend and fighting it might end up doing more harm than good these are still incredibly difficult jobs with a very uncertain future so why are we all of a sudden yearning for the lines we'll return significant manufacturing jobs to our country all-time record for construction jobs only 800,000 manufacturing has
the fastest growth in 40 years the robots can work 24/7 and you call dark factories it can literally be working without human intervention main focus right now is automation automation we can't have automation so the reason that manufacturing jobs have become so desirable all over again is actually pretty simple in the past the most reliable opportunity for men without a college degree to earn an income that could support a family was in manufacturing fast forward to today and record numbers of people with a college degree are still struggling to find work very few jobs can
comfortably support a family by themselves and areas that do have high-paying jobs are unrealistically expensive to live in it's made a lot of people realize that maybe the old factory job wasn't so bad back in the good old days the way it worked was that most people in a manufacturing business would work on the factory floor above them would be a smaller group of Supervisors with practical experience that can make sure everybody was doing their work correctly and above them sitting in a separate office with a college educated specialist and Executives responsible for Designing new
products and setting the direction of the company but eventually we figured out that these jobs up here were way better than these jobs down here so what if everybody could just do these ones globalization automation Outsourcing and tech services meant that instead of working on the factory floors ourselves we could give those jobs to low paid workers on the other side of the planet and move up into management positions we made the world our Factory floor and the American workplace became the office overseeing and managing it this was actually a pretty sweet deal because hot
take alert but a lot of our factory jobs kind of suck if we could work all of the old jobs that the executives used to work this would have been an incredible opportunity but of course it didn't work out like that for two simple reasons the first reason is that we found out there isn't actually that much space at the top of the pile cool Back 40 years and the average office wouldn't know what a culture coordinator corporate Wellness manager diversity and inclusion officer social media manager brand ambassador or sustainability consultant even was there are
lots of extremely common jobs in modern offices that didn't exist 20 years ago part of this is due to technology you can't coordinate social media if it doesn't exist but a lot of it has been in response to finding more jobs for people to fill regulations best practices and modern initiatives have given modern workplaces more boxes to tick which has meant more people in jobs but it means that the average value created by those service jobs has gone down this white color inflation means that today the people working the jobs back down at the bottom
of the pyramid have kept up or exceeded most of the people trying to squeeze in up here the second issue with making the entire economy white color is that eventually the countries that we outsourced the bottom of the services pyramid to wanted to make their own white collar jobs for the last 30 years American companies have outsourced manufacturing to China because it was so cheap but China has now taken those technical expertise and use it to build their own companies that are just as good if not better than the American businesses that they have used
to do the grunt work for what this means is that 30 years ago it was Factory workers fighting off Global competition for their jobs today it's everybody the solution is to bring back manufacturing and build the Pyramid back up again with a solid foundation it honestly seems sensible except for the part where it totally misses the point so it's time to learn how money Works to find out why we yearn for the lines this week's lesson was sponsored by cook Unity here's how it usually works potential sponsors reach out to me I try their product
and then decide if I want to work with them this time though it's a little different I've actually been using cook Unity for a while now and I loved it so much that I was excited to partner with them cook Unity makes it easy and effortless you can pick a subscription plan and choose from hundreds of meals each week all crafted by awardwinning chefs don't have time to choose no worries cook Unity can curate meals based on your prefer is cook unity's roster of Allstar chefs include Food Network alums James Beard award winners and acclaimed
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use my code money 50 to get 50% off your first order of cook Unity meals to try them out for yourself now sit down what I'm about to say might come as a shock to you but America is not special we were not the only country to do the old service job swier other advanced economies like those in Europe Canada and Australia also outsourced a lot of their manufacturing and some of them went even harder than we did Australia which used to have a large manufacturing industry producing Advanced products like Automobiles and aircraft has lost
all of its major companies and according to their own Department of Jobs and skills the largest manufacturing industry by employment today is baking don't worry I didn't forget that video on Australia is coming soon so you know subscribe because that place has some problems even the countries that we outsourced to ended up Outsourcing South Korea Japan and even China have started to wake up to the problems that they have caused for themselves by Outsourcing the jobs that actually make the stuff to the lowest Global bidder and now everybody is in a desperate race to reverse
course Robert Lawrence a trade and investment professor at Harvard University recently wrote about this arguing that this whole reversal was futile at best behind the curve can manufacturing still provide inclusive growth looks at how these jobs used to be able to provide a good quality of life to average American families and how our Nostalgia for that time has made us all focus on our jobs instead of the conditions surrounding them it doesn't matter if you forge engine blocks by hand or file TPS reports in a cubicle you are still exchanging your time and expertise for
a paycheck the reason that manufacturing jobs Look So Good by comparison now is down to two important factors the first big Advantage they had was that they remained unionized in the past Union efforts fought for paying benefits of workers here at the bottom of the pyramid against the people up here at the top as the popul po moved into white collar jobs in the service sector we convinced ourselves that we were the management which is why with the exception of a few special Industries if you sit behind a computer for a living you are much
less likely to be a part of a union in just the past 5 years unions representing Auto Workers Dock Workers and UPS drivers had negotiated pay and benefits that split opinions across the country because they were so generous it almost seemed greedy the thing is though if your income had also kept up with productivity these would still be lower middle income jobs and office jobs would pay even better still the other thing that has made factory jobs seem really attractive all of a sudden is that factories naturally exist in areas that are cheap because of
the land that's required to build them offices for high-end companies that can afford to pay high-end salaries are almost always in very expensive cities where you need to earn even more to live a comfortable life without six roommates people are naturally much more likely to remember what someone does for a living than what the macroeconomic factors surrounding their employment are so instead of focusing on making cities of able pushing for worker representation or just offering workplace protections it's become easier to just talk about bringing back factory jobs now both sides of the aisle are absolutely
guilty of pushing this overs simplistic solution and politicians are making the same promises outside of America too tariffs build back better the chips bailouts and massive incentives all have the intention of creating or at the very least maintaining manufacturing jobs but in his book Lawrence has argued that this is probably just going to backfire and it could actually make a lot of problems worse these big government programs ultimately amount to giving a lot of money to companies so they can create manufacturing jobs but not even America can fight the force of the global economy instead
of making money more inclusive and providing opportunities for semi-skilled workers to keep up these programs have largely worked to funnel money into the hands of investors and business owners they also ignore the small problem that people have already moved on after Decades of being told to upskill and go to college people have upskilled and gone to college these new projects are struggling to find skilled manufacturers ing workers to fill these roles with some businesses resorting to hiring people through skilled worker visas creating a situation where we have on shorted the offshore jobs that were originally
onshore now Lawrence's book is written by a Harvard Economist for Harvard economists it's an interesting read that I will definitely leave a link for in the description but you have been warned it's pretty heavy now the good news amongst all of this is that the solution is simple the carrot hasn't worked businesses have taken these government incentives and handed them to their investors but there is always the stick the bad news is that it's incredibly unlikely to happen go and watch my video on how big business got so dumb to find out why and make
sure to subscribe to keep on learning how money works
