I have never presented to you a “re-blog” but the one written by Meagan Parrish below is, in my opinion, extremely important.  We all know the manufacturing sector has really taken a hit in the past few years due to the following issues and conditions:

  • Off-shoring or moving manufacturing operations to LCCs (low cost countries). Mexico, China, South Korea and other countries in the Pacific Rim have had an impact on jobs here in the United States.
  • Productivity gains in manufacturing. The ability of a manufacturer to economize and simply “do it better” requires fewer direct and indirect employees.
  • Robotic systems and automation of the factory floor has created a reduced need for hands-on assembly and production. This trend will only continue as IoT (Internet of Things) becomes more and more prominent.
  • Obvious forces reducing jobs in American manufacturing has been the growth in China’s economy and its exports of a large variety of cheap manufactured goods (which are a great boon to American and other consumers). Since China did not become a major player in world markets until after 1990, exports from China cannot explain the downward trend in manufacturing employment prior to that year, but Chinese exports were important in the declining trends in manufacturing during the past 20 years. More than three-fourths of all U.S. traded goods are manufactured products, so goods trade most directly affects manufacturing output.  Thus, increases in net exports (the trade balance) increase the demand for manufactured products, and increases in net imports (the trade deficit) reduce the demand for manufactured goods. The U.S. has run a goods trade deficit in every year since 1974 (U.S. Census Bureau 2015).
  • The recession cut jobs in all sectors of the American economy, but especially in factories and construction.
  • Manufacturers need fewer unskilled workers to perform rote tasks, but more highly skilled workers to operate the machines that automated those tasks. Manufacturers have substituted brains for brawn.
  • Trade Negotiations have to some degree left the United States on a non-level playing field. We simply have not negotiated producing results in our best interest.

Manufacturing employment as a fraction of total employment has been declining for the past half century in the United States and the great majority of other developed countries. A 1968 book about developments in the American economy by Victor Fuchs was already entitled The Service Economy. Although the absolute number of jobs in American manufacturing was rather constant at about 17 million from 1969 to 2002, manufacturing’s share of jobs continued to decline from about 28% in 1962 to only 9% in 2011.

Concern about manufacturing jobs has become magnified as a result of the sharp drop in the absolute number of jobs since 2002. Much of this decline occurred prior to the start of the Great Recession in 2008, but many more manufacturing jobs disappeared rapidly during the recession. Employment in manufacturing has already picked up some from its trough as the American economy experiences modest economic growth, and this employment will pick up more when growth accelerates.

As a result of the drop in manufacturing, many of our workers are on welfare as demonstrated by the following post written by Ms. Meagan Parrish.  Let’s take a brief look at her resume.  The post will follow.

MEAGAN PARRISH BIO:

Meagan Parrish kicked off her career at Advantage Business Media as Chem.Info’s intrepid editor in December 2014. Prior to this role, she spent 12 years working in the journalism biz, including a four-and-a-half year stint as the managing editor of BRAVA, a regional magazine based in Madison, Wis. Meagan graduated from UW-Madison with a degree in international relations and spent a year working toward a master’s in international public policy. She has a strong interest in all things global — including energy, economics, politics and history. As a news junkie, she thinks it’s an exciting time to be working in the world of chemical manufacturing.

PARRISH POST:

Study: One-Third Of Manufacturing Workers Use Welfare Assistance

There was a time when factory jobs lifted millions U.S. workers out of poverty. But according to new data, today’s wages aren’t even enough to support the lives of 1 in 3 manufacturing employees.

The study, conducted by the University of California, Berkeley, found that about one-third of manufacturing workers seek government assistance in the form of food stamps, healthcare subsidies, tax credits for the poor or other forms of welfare to offset low wages.

This amounts to about 2 million workers, and between 2009 and 2013, the cost for assisting these workers added up to $10.2 billion per year.

What’s more, the amount of employees on assistance shoots up 50 percent when temporary workers are included. In fact, the use of temp workers, who can be paid less and offered limited benefits, is one of the main reasons why the overall wages picture looks bleak for manufacturing.

“In decades past, production workers employed in manufacturing earned wages significantly higher than the U.S. average, but by 2013 the typical manufacturing production worker made 7.7 percent below the median wage for all occupations,” said Ken Jacobs, chair of the UC Berkeley Center for Labor Research and Education, in the paper.

“The reality is the production jobs are increasingly coming to resemble fast-food or Wal-Mart jobs,” Jacobs said.

By comparison, the number of fast-food workers who rely on public assistance is about 52 percent.

Oregon was named as the state that has the highest number of factory workers using food stamps, while Mississippi and Illinois lead the country in states needing healthcare assistance. When all forms of government subsidies were factored in, the states with the most manufacturing workers needing help were Mississippi, Georgia, California and Texas.

The research found that the median wage for non-supervisory manufacturing jobs was $15.66 in 2013, while one-fourth of the workers were making $11.91, and many more make less.

CNBC report on the study detailed the struggles of a single mom working as an assembler at a Detroit Chassis plant in Ohio for $9.50 an hour. She often doesn’t get full 40-hour work weeks and said she has to rely on food stamps, Medicaid and other government programs.

“I absolutely hate being on public assistance,” she said. “You constantly have people judging you.”

The report comes as debate about the minimum wage heats up in the presidential race. Raising the federal minimum wage to $15 has been a chief platform issue for Democratic presidential hopeful, Bernie Sanders. Presumptive Republican candidate Donald Trump has also shown support for lifting wages to some degree.

The findings have also added a sour note to recent good news about jobs in the U.S. Recently, the White House was boasting about improvements in the economy and cited a government report showing that about 232,000 new positions were created during the past 12 months.

CONCLUSIONS: MY THOUGHTS

To me this statistic is shameful.  We are talking about the “working poor”. Honest people who cannot provide for their families on the wages they earn or with the skill-sets they have.  Please note, I’m not proposing a raise in the minimum wage.  I honestly feel that must be left to individual states and companies within each state to make that judgment.  I feel the following areas must be addressed by the next president:

  • Revamp the corporate and individual tax code. What we have is an abomination!
  • Review ALL trade agreements made over the past twenty (20) years. Let’s level the playing field if at all possible.
  • Eliminate red tape producing huge barriers to individuals wishing to start companies. When it comes to North American or Western European manufacturing, there are certainly more regulatory barriers to entry.
  • Review all regulations, yes environmental also, that block productive commerce.
  • Overbearing regulations can give too much power to a few, and potentially corrupt ruling regime and prevent innovative ideas from flourishing. It can perhaps be an obstacle for a foreign nation to invest in a country due to those conditions and regulations which increase costs. (The fact that some of these regulations are usually for the benefit for the people of that nation poses another problem.
  • We have a huge skills gap in this country. Skills needed to drive high-tech companies and process MUST be improved.  This is an immediate need.
  • Beijing signaled with its currency devaluationthat the domestic economic slowdown it has failed to reverse is no longer a problem confined within China’s borders. It is now the world’s problem, too.  This problem must be addressed by the next administration.
  • Companies need to review their labor policies and do so quickly and with fairness. I’m of the opinion that people are almost universally the best judges of their own welfare, and should generally see to their own welfare (including continuing skill improvement and education), but I’m not in any way opposed to market based loans and even some limited amount of public funding for re-education of indigent non-productive workers (although charity & private sources would be a first choice for me).

 

As always, I welcome your comments.

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Data used in this post come from the following sources: 1.) Industry Week and the 2.) International Trade Administration.  

Unless you have been living in a cave, you know the United States has, for the most part, lost much of its manufacturing base.  I personally think this is a travesty, but that’s just me.  Think about those items you purchase with some degree of regularity and the “MADE IN _________” tag you find prior to that purchase.  Consumer goods such as: electronics, textiles, shoes, clothing, not to mention commercial products such as machine tools, hand tools, medical equipment, etc have gone “overseas”.   Made in China is much more common than made in America.   If you don’t believe that, take a stroll through Wal-Mart or Toys-R-Us.  There is good news relative to individual states exporting to other countries. We are in the process of seeing “re-shoring” or a return to manufactured goods produced in our country also.  Industry Week published a fascinating article indicating that in 2013 our country exported $2.3 trillion in goods to other countries.   The top twenty-five recipients of those goods are as follows:

TOP US TRADE PARDNERS

 

If we look at the percentages, we find the top five (5) are:

  • Canada
  • Mexico
  • China
  • Japan
  • Germany

The top ten (10) states exporting to other countries may be seen by the spreadsheet given as follows:

1.)    TEXAS  with $279.7 Billion

2.)  California with $168.1 Billion

3.)  Washington St with $81.9 Billion

4.)  Louisiana with $63.1 Billion

5.)  Michigan with $58.5 Billion

6.)  Ohi0 with $50.5 Billion

7.)  Georgia with $37.6 Billion

8.) Tennessee with $32.4 Billion

9.) North Carolina with $29.3 Billion

10.) South Carolina with $26.1 Billion

Let’s take a look at what each state contributes to the total $2.3 trillion dollar figure.

  • TEXAS: Texas merchandise exports increased 5.7%, growing from $264.7 billion to $279.7 billion.  Key merchandise export categories include: petroleum products; computer and electronic products; chemicals; machinery manufactures; and transportation equipment.
  • CALIFORNIA:  California merchandise exports increased 3.9%, growing from $161.9 billion to $168.1 billion. Key merchandise export categories include: computer and electronic products; transportation equipment; machinery manufactures; miscellaneous manufactures; and agricultural products.
  • WASHINGTON:   Washington merchandise exports increased 8.4%, growing from $75.6 billion to $81.9 billion.  Key merchandise export categories include: transportation equipment; agricultural products; petroleum products; computer and electronic products; and food and kindred products.
  • LOUISIANA:  Louisiana merchandise exports increased 0.3%, growing from $62.9 billion to $63.1 billion. Key merchandise export categories include: petroleum products; agricultural products; chemicals; food and kindred products; and machinery manufactures.
  • MICHIGAN:  Michigan merchandise exports increased 2.6% growing from $57.0 billion to $58.5 billion. Key merchandise export categories include: transportation equipment; machinery manufactures; chemicals; computer and electronic products; and primary metal manufactures.
  • OHIO:  Ohio merchandise exports increased 3.9%, growing from $48.6 billion to $50.5 billion. Key merchandise export categories include: transportation equipment; machinery manufactures; chemicals; computer and electronic products; and fabricated metal products.
  • GEORGIA: Georgia merchandise exports increased 4.2%, growing from $36.1 billion to $37.6 billion.  Key merchandise export categories include: transportation equipment; machinery manufactures; chemicals; paper; and food and kindred products.
  • TENNESSEE:  Tennessee merchandise exports increased 4%, growing from $31.1 billion to $32.4 billion.  Key merchandise export categories include: transportation equipment; chemicals; computer and electronic products; miscellaneous manufactures; and machinery manufactures.
  • NORTH CAROLINA:  North Carolina merchandise exports increased 1.6%, growing from $28.8 billion to $29.3 billion.  Key merchandise export categories include: chemicals; machinery manufactures; transportation equipment; computer and electronic products; and textiles.
  • SOUTH CAROLINA:   South Carolina merchandise exports increased 4%, growing from $25.1 billion to $26.1 billion.  Key merchandise export categories include: transportation equipment; machinery manufactures; chemicals; plastics; and paper.

Every $1.00 billion creates 5,000 jobs in our country with ninety-five percent (95%) of the potential consumers lying outside our borders.  I personally believe the work ethic demonstrated on a daily basis by men and women in our country is the best in the world.  It always amazes me that many people never take ALL of the vacation time they have available, consequently losing a considerable number of days that cannot be “rolled over” into the next year.  These days are simply lost, which is absolutely unique to our country.  Many Western European countries take their “summer sport” and “winter sport” no matter what.  I have dealt with companies in Germany, Italy, Austria, Holland and others that literally close down during August of each year.  Everyone dealing with them knows that and plans for that certainty.

We could see a huge improvement in unemployment IF just the FED would agree to “buy American”.  Can you imagine the boost in employment?  It would be astounding and I can tell you from experience, the quality of purchases would improve tremendously.

I would love to get your thoughts on this topic.  Please drop me an e-mail and let me know what you think.

 

COUNTERFEIT

January 5, 2014


The idea for this post comes from “Plant Engineering”, May 2013 publication.

If you are in the engineering profession you know that counterfeiting of components and assemblies is a huge problem for tier one suppliers and end users.   Counterfeiting of well-known brands and products is a growing problem estimated to be between five and seven percent (5%–7%) of world trade.  This represents approximately $600 billion (yes with a “B”) each year.  Some months ago the Machine Design Magazine published an article highlighting this issue with fasteners imported into this country.    Many of these fasteners did not meet standards and specifications required by companies and agencies doing the purchasing.  The life expectance was, in some cases, greatly diminished and premature failure under load was a huge factor.  The Department of Defense (DOD) was greatly concerned and started requiring much closer incoming inspections for fasteners purchased from overseas suppliers.    Counterfeit health and safety products such as electrical and electronic assemblies now occupy second place after pharmaceuticals on the list of those most frequently seized by U.S. Customs.   Electrical products with off-quality assembly and “bogus” components can overheat causing fires, shock hazards and other significant safety problems.  These illegal products do not need to comply with performance and safety specifications and they many times are not tested and approved through a third party agency.

By definition, a counterfeit is a product, service, or package for a product that uses, without authorization, the trademark, service mark, or copyright of another intended to deceive prospective customers into believing the product or service is genuine.  This makes detecting the difference between a counterfeit and authentic product very difficult.

The following list of seven (7) tips may aid your efforts in avoiding counterfeit components and products:

  • BUY AUTHENTIC—The very best way to avoid counterfeit products is to make purchases from the manufacturer’s authorized distribution network or resellers.  Traceability can then be assured.
  • VERIFY AUTHENTICATION—When possible, use tools provided by the OEM (original equipment manufacturer) to verify products are authentic.  This includes UL, ETL, CE, NEMA (National Electrical Manufacturers’ Association) etc. certification.  It probably also includes in the advertised package 1.) Owners’ manual or use and care guide, 2.) Warranty card, 3.) Installation instructions, 4.) Contact numbers for problems that may arise during use, 5.)  Web site for additional information and customer support.
  • SCRUTINIZE LABELS AND PACKAGING—Check for certification marks on the packaging and avoid products lacking any identifying branding or labels.  Be very leery of additional markings or labeling not applied by the OEM.   Look for poorly labeled products and date codes obviously in error or out of date.
  • AVOID “BARGAINS”—If it’s too good to be true, it probably is.  Make comparisons with other products of the same type.  In other words—shop the product.  Use the Internet to research the product prior to purchase.  It is not a bad idea to call the manufacturer is questions of authenticity arise.
  • PAY CLOSE ATTENTION TO PRODUCTS PURCHASED—You MUST look the product over to determine if in your own mind the quality of workmanship is what you would expect from a “brand-name” manufacturer.  Be cautions of products that seem cheap and poorly assembled.
  • MAKE SURE EVERYTHING IS THERE—Counterfeit products often don’t include supplementary materials such as owner’s manual or product registration cards.  Sometimes, even parts are missing.
  • REPORT SUSPECTED COUNTERFEITS—Contact the brand owner and let them know you suspect a counterfeit product has been purchased.  Let them “chase” the imposter.  This action could insure the product is removed from the marketplace.

If you are buying online, I would definitely ask associates and wholesalers for recommendations relative to the products advertised.  Their misfortune once known could save you time and trouble and most of all provide safety for the end-users.

Any comments you might have will be greatly appreciated.

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