Wizer looks at the SoTU #2

Item # 2:  New manufacturing jobs

A lot of people make the mistake of thinking that the loss of manufacturing jobs is both a disease and a symptom. In a productive economy, the most useful work is done at a very high level. Machine repair, CAD design, research, testing, etc. Manufacturing skills are easily taught. Manufacturing as an activity is most economical when it lifts the least skilled persons into a position of added value. Currently, those skills are more economically provided in China, Thailand, and Burma. If it were more economical here, this is where the jobs will be.

At $7.25+ / hour going rate for US workers (more on this later, as you might guess), it will continue to be more economical to make things somewhere else.

The return of manufacturing jobs may not be an indication that the economy is improving. It could actually be an indication that we are not efficiently allocating the resources to the work. If it costs $6 to make a part in China and $8 to make it here, the company that is making in the US is at a distinct disadvantage in the global market. The market has a way of equalizing this type of imbalance.

The president brought up the "manufacturing institute" in Youngstown OH. Said they were doing something unique and fundamentally important. The truth is that there are thousands of Youngstowns now that are competing against government money now, yet are further advanced in the development of 3D manufacturing equipment. Why does Youngstown get subsidized? Because Obama likes to pick winners and losers.


The only worthwhile jobs are ones that add value. Obama wants to blindly chase after manufacturing jobs, without consideration of whether there is clear economic value. He now wants to spend borrowed money on 15 new "manufacturing hubs" of very dubious benefit, as if they have any sense of what might be successful in manufacturing development. A hypothetical good president would retire the labor department, free up the economy to create its own manufacturing hubs, and would eliminate the minimum wage. Then, anyone who wants to operate a manufacturing plant or work in manufacturing can do so without artificial restriction, and might even find a formula hat works economically.