Can confirm, the demand for factory work is insane right now. I know someone who went to work for a factory because the pandemic effectively killed his profession (union pipeline welder) and he pretty much exclusively works 12 hour shifts 6 days a week because there just isn't enough workers to keep up with the demand atm.
He was in a desperate situation because he got saddled with debt trying to stay afloat during Covid, so he just does that and keeps his head down all the time while paying things off. Its a shame too, he was so close to retirement and now I don't think he will be able to.
How does a union welder get saddled with debt trying to stay afloat during covid? What was the thing he was taking on debt for to keep afloat? What does keeping something afloat even mean? He took on new debt to make payments on his old debt?
I say this as someone that knows two pipeline welders in Wyoming. They were living it up with their time off. Who do you think bought all those side by sides in 2020 and 2021. You couldn't find one to buy no matter how far you were willing to drive. Do you think it was the office worker crowd buying $30k go-karts?
The way his job works is that he bids for jobs, gets accepted then go's out to wherever that job is. Usually spending 3-6 months out at a time, then going home and bidding for other jobs. Thing is, according to him, there weren't any jobs during covid and he isn't known for being a saver. That is def on him, but he says he is still having trouble getting a pipeline job that his union allows. Personally, I know next to nothing about the pipeline welder industry outside of what he told me, as I am a programmer. I am going off his word which may/may not be accurate
If he's bidding on jobs, he's not exactly a union welder. He's a small business owner and in that case I agree things can definitely go south for various reasons.
I think bidding in this case means he puts his name down for jobs that are sent to the union hiring hall- and the jobs are allocated on the basis of seniority. Fewer jobs impacts those lower on the seniority list.
The word bidding is very well understood and used in the construction industry. I wouldn't assume the welder misused one of the most common words in the industry to help make a point here.
He goes to the Ford dealership and says he wants a truck. The salesman says, "How much are you looking to spend a month?" He says 800 dollars because that's the amount he has left over after his bills. He then owns an 800/month truck. Repeat every three years throughout life.
I have seen so many people fall victim to these tactics. It's never "what can you afford?" but "tell me what you want and we'll work something out". And next thing you know a 22 year old with zero financial or life knowledge is stuck with a 8 year 33% APR loan for shitty used truck that will need thousands in repairs every year.
I recently posted here that I sold cars for 10 years. I can not even imagine asking someone "what can you afford?" It sounds half condescending and half way too personal/inappropriate.
People come to the dealership and ask for certain cars. Sometimes they do ask about payment ranges, and so you tell them. If they say "oh that's more than I thought, I was trying to keep it under $500 a month. Is that possible?" I tell them if it's possible via lease with $4k down or maybe on a 72 month loan. They decide. What else am I supposed to do? Go full Dave Ramsey on them and figure out if they can really afford $500 a month?
The FEW times I tried to save someone from buying an expensive used car I just KNEW would eat them alive in repairs, it was always taken very poorly, and that's with me doing it pretty tactfully in my opinion.
People that are the type to make bad financial decisions (in our opinions let's say) don't exactly take kindly to lowly 'car salesmen' implying they can't really afford something.
As shitty as this is I don't think it's fair to label the individual a victim. A contract is a contract, and personal responsibility is a requirement in a free-ish society.
I guess he can be viewed as a victim of his parents, and society in general (schooling system etc.), who never taught him about handling finances. How can a person know something if they were never taught it?
It really doesn't take a lesson in finances to understand "money is important to have. I get money from work, which is not a sure thing. I should keep some money in reserves for when I don't have an income since jobs come and go".
Immigrants from 3rd world countries with zero formal education, zero real family experience with building wealth, save money like crazy in the US.
> Immigrants from 3rd world countries with zero formal education, zero real family experience with building wealth, save money like crazy in the US.
There's "building wealth" and there's just responsible money handling. Normal families handle money in responsible manner (have savings, avoid debt etc.) and such behaviors are passed to children. Pathological families can be doing all kinds of crazy things with their money - take up expensive debt for frivolous reasons, spend the whole salary up front and go hungry until the next one arrives, lose houses over small things (e.g. a guy in my family traded a large apartment for a much smaller one, a bottle of vodka and a dog) etc. Their lives is chaos, and that includes the financial aspect of it. A child in such conditions really can have no idea that it's not a normal way to handle money, and that it can be done much better.
I feel like we've been infantilising people too much lately. There has never been better, easier, and more accessible access to knowledge than today. If this person wanted to learn about how loans work, they could have. They don't want to. That's on them. Or maybe they know exactly how loans work and just really want an expensive truck. That happens plenty. They're not victims. They just have different values and preferences.
Business executives, sports stars and other rich and successful people go broke and deep into debt all the time. The reason is the same whether you are a plumber or CEO – living beyond your means and not saving.
For sure people go broke from over spending and going into debt.
But this is a story of someone going into debt trying to stay afloat during a stay at home order apparently.
Since the OP, it has come to light that he was more of a small business owner bidding on jobs prior to covid, which makes a lot more sense how a sudden drop in available work could wipe you out.
Takes about 15 years of consistent saving and investing. Then all of a sudden you're wealthy. But as you're saving and investing you still don't have a wild standard of living.
Household income of 100,000 (higher than typical) gives 15K per year, or 1250 a month. 8% interest gets you to $376,000 after 14 years. No where near millionaire status. And this is assuming a tax differed investment path such as 401(k), and you still owe taxes out of that when you withdraw (assume 20% for fed/state, if you don't draw it out all at once, gives you around $300k).
Of course, add another decade and you are at millionaire status. Or don't contribute any additional funds, and wait 12 years, and you hit millionaire.
Yeah the numbers there don't add up as their savings plan changes once people pay off their mortgage, have a rainy day fund and have the kids education fund ready.They tell people to max out savings at that point. So it's starts out at 15% but ends up being much higher.
Based on the numbers for average account balances and stuff, it seems like retirement is a luxury for the current generations. Evens the social support systems are being underfunded, which is likely to lead to inflation or economic downturn as the taxes increase to cover them.
Even as someone who is better off than others my age, it seems like retirement will be a long way off and tight. I was interested and looked up how I stacked up and it turns out I'm around top 25% for income by age and about top 1% (that's alarming) for savings. If it's shakey for me, how is anyone else going to make it? Property values and taxes aew sky high. So is medical care. Other stuff like groceries or parts/labor for home repair are rising.
For real my ex is a union welder and she made stupid money during the pandemic. Construction is considered essential and she got mad overtime with all the people out sick. They basically took zero safety precautions and she gave me the pleasure of being one of the first 100 people to catch covid in my city of ~200,000 people.
That's a cool stereotype to talk about, but for every broke guy that makes $200k living in Wyoming, I know more that own 10 acres, a nice house, a 3000 sq ft metal building next to it, $10k+ in guns and ammo, several paid off older vehicles, and one nice one with a payment for the wife and maybe himself. That is much more common that someone that makes great money but just CANT curb his spending.
I didn't work with any offshore people. I knew a directional driller very well and visited him several times, and from there met a few welders as well while we worked on helping them install off-road suspensions onto their trucks. All had nice houses and sounded like they didn't have a care in the world. Very different from my silicon valley friends complaining about their high rent and housing costs.
Most guys I know had their housing provided on site. They then traveled home between jobs. Or others had RV trailers with them so they didn't have to go home, if they even had a home at that time.
Can you give some insight into if he "blames" anyone in particular for his situation? I ask because a noticeable chunk of Democrat -> Trump voters (especially in the rust belt) specifically cite Bill Clinton and NAFTA for their abandoning the Democrats. It was a group Hillary took for granted and lost. Some percentage of those people appear to have sworn off Democrats for good. Since COVID started under Trump I wonder if he blames a particular side for his situation?
There is enough blame to be spread around for both major parties. Trump had his -15- 45 days to slow the economy. Congress printed trillions of dollars. Nearly every governor was more draconian than the federal government.
It matters because it gives us an idea as to their future actions in subsequent elections. I know that Trump has caused a lot of damage but these voters vote based on how pissed off they are at the candidate. I'd bet if Michelle Obama ran they might vote her in.
Man. Elites realizing they could deflect any criticism of the impacts of globalization and the knowledge economy on the “racismsexismandhomophobia” of the working class was genius.
For the most part, I oppose abortion and gay marriage because of globalization and the knowledge economy. Just horrific, the effects on my moral position - which was previously anti-abortion and anti-gay-marriage.
You’re close. They’re related, but the causation runs the other way. Structural changes in the economy facilitate changes in views towards those things. It’s not coincidental that, for example, my contractor who earns his living lifting drywall over his head has different views of gender roles than people who make a living doing knowledge or creative work.
To turn the example around. people in my dad’s village in Bangladesh—where you need to have kids to work on the farm—all believe in traditional procreative marriage. Is that a justification for ignoring their economic concerns?
It’s a very weird kind of “liberalism” that holds people’s attitudes arising out of their lived experience against them.
Its not working though. Trump got elected and Bernie was very close to clinching the nomination. Italy just elected a far right candidate and lets not forget Brexit. If this strategy would actually work, the trend would be going in the opposite direction. At this rate it may just be a matter of time until the Elite's stores of values get "reset".
It works pretty well within their own parties. That is, it helps those people keep control of their parties, even if their parties lose control of their countries. For career politicians, the former is more important.
No but my point is that trend is going in the wrong direction. The Bernie wing almost took control of the party and Trump? He was a gameshow host and despite all the efforts of the Republican party not to have him nominated he barged in there like a bull and took control of everything. He somehow ended up becoming their useful idiot but the point still stands. How many more election cycles until the Bernie/AOC manage to wrestle control of their party? Then what?
I was referring to 2020. The trend from 2016 -> 2020 showed that he gained greatly in his numbers. Yes he ended up losing but this trend supports my thesis that the center is losing its grip on both parties. It could be Bernie 3.0, AOC or someone else but the far left is becoming the new "center" of the party and the far right is becoming the new "center" of the other party.
There's no manufacturing premium over shitty service or labor jobs any more, so it doesn't matter. People reading this story intended to market the economy will assume that it means that more people are getting better pay. They're not. Since August 2006, crappy manufacturing jobs pay less than other crappy jobs.
There are many jobs that are not shitty within the manufacturing sector. I would guess the percentage of higher skilled jobs in manufacturing has increased over low skilled jobs.
My first job was manufacturing, it sucks but I think it is better than retail and the service industry. You sweat and do boring things all day basically. I hear a lot of people in the service industry complaining, maybe many of them are better suited to work in union manufacturing job somewhere.
I don't blame companies but the government on any lack of manufacturing jobs. China is cheap and from what I understand they are usually at most 3-4x cheaper not 10 or 10x cheaper right? So that just means stuff costs a bit more and less net profit margins for companies right? Not ideal but it should be economically viable I would think?
I am just concerned there is a real chance of an eventual war with china when the west depends on them on so much but opposes them on a lot of things as well. Can the frenemy relationship last long?
> So that just means stuff costs a bit more and less net profit margins for companies right? Not ideal but it should be economically viable I would think?
Except you still need to compete with other companies who can undercut your product on price now. A few $ here or there might not matter for some, but most people are going to sort by price and buy the cheapest one. Now there are second order effects - the high volume sellers get economies of scale during manufacturing and better deals from suppliers when they buy in bulk. Now you’re competing with products who are priced much lower. How long before you go out of business?
All is not lost. You could potentially put a “proudly made in $country” tag on your product and charge a premium. You’ll go low volume, high margin. It’s viable and many manufacturers do it. But only the ones with a direct relationship with customers. A supplier making a tiny wizbang can’t sell them to Apple or Ford expecting a premium.
Isn't that what tariffs are for? To prevent foreign countries from undercutting local companies? America does not have a free trade agreement with China for example.
4x cheaper as in 1/4 the cost to produce? So a foreign competitor can charge half as much as you and still make a a gross margin of 50%? Nah you’re out of business immediately.
Labour is 4x cheaper. Bill of material cost is going to be pretty much the same everywhere. Depending on the product, the labour cost of manufacturing might only be 20% - so that 4x turns into a 15% saving on cost of goods. That needs to be contrasted against shipping costs and the overhead of managing a Chinese factory.
> Bill of material cost is going to be pretty much the same everywhere.
A decade or so ago, my dad analyzed a part that came from his Chinese competitor. The finished Chinese part, including shipping, cost less than my dad’s company was paying for the raw materials.
He was still able to compete by producing a much higher quality product (found in nuclear power plants, chemical processing plants, oil rigs, and other places where quality really matters).
Anyway, my point is, I wouldn’t assume China is only cheaper due to labor.
On its own yeah but tariffs subsidies and other policy tools can make it so you are profitable. If apple makes iphones for $99 in China you can specifically implement tariffs on iphones at 500% so it is equally costly if making it in the US costs 499.
So now iPhones are 80% cheaper in every other country in the world? Seems unlikely to work. You’ve also introduced a massive tax for a single product for a single company which is prettt bullshit
No, that means apple which is a US company tucks its tail between its legs and starts making iPhones in the US for US/europe customers and wherever else it wants if it wants to compete outside of the US. Apple specifically makes most of its iphone profits from the US and it is a mainline product for a trillion dollar company that is taking money out of the US consumer into Chinese economy so it isn't bullshit at all.
A tariff like this has never happened before and would be heavily contested. Not especially realistic. And also wouldn’t prevent apple from making iPhones in China for every other market.
You are right but at least a large part of their revenue will come from US made iphones which means money in the US economy instead of China, similar tariffs for others who innovate in the US but manufacture elsewhere can be implemented as well since international commerce can be regulates by the fed gov. It would also set precedent for future outsourcing attempts, reduce the likelihood of wars and supply chain chaos.
There is no free trade with China. Allowing outsourcing to countries that don't compete fairly with ameican companies because they treat their people like shit is what I blame them for. Free trade can only happen fairly if economic conditions between countries is similar.
In the 1970s factory jobs came with generous pensions that meant a worker could retire comfortably in their mid 50s. In the 1970s a a factory job allowed the worker to afford to own their own home, their own new car, and support a spouse and children on the one income earned from the factory. In the 1970s the cost of healthcare for the factory worker and his family was inconsequential. Factory workers and their families were not bankrupt or even severely taxed by the cost of hospital visits, let alone routine healthcare. Factory jobs in the United States in 2022 do not resemble factory jobs in the United States in the 1970s in any way. This is a ridiculous comparison for the NYT to make.
Strip-mining Europe from all their industry will help. But it is doubtful that the supply chain disruptions caused by it will not do more damage than what partial reindustrialization can accomplish. I guess we will find out next year.
I suspect that with high labor demand and the fact that these jobs are shifting towards the south and west, there won’t be much push for unionization at least for a little while.
Now, if the market continues to cool down, it may be a different story.
You might want to ask Whole Foods/Amazon about that:
> Store-risk metrics include average store compensation, average total store sales, and a “diversity index” that represents the racial and ethnic diversity of every store. Stores at higher risk of unionizing have lower diversity and lower employee compensation, as well as higher total store sales and higher rates of workers’ compensation claims, according to the documents
With the boomers retiring there will be less workers so workers will have more leverage. Companies will also want on bring back some of the jobs from overseas due to all the supply chain risks elsewhere.
I'm all for manufacturing jobs coming back but do we have adequate environment protection to safely facilitate that kind of change? Part of the reason the air is so clean in the US is partially due to offshoring (for better or for worse).
Short answer: yes. Despite the doomsayers and the fact that you might not know anyone that works in manufacturing, the US is still a manufacturing powerhouse.
https://www.brookings.edu/research/global-manufacturing-scor...
At 18% of global manufacturing output already, "a net gain of 67,000 workers above prepandemic levels" is not going to move the needle.
It's in dollars, which is very misleading and forms an incomplete picture of the ecosystem required to have true manufacturing ability. We do final assembly on an automobile and that gets registered as big $$$. But it's actually pretty easy to assemble a bunch of already-made parts. Much more difficult (and quite a lot of skill, built up over decades) to make the fuel pump from raw inputs! We lack completely the lower three-quarters of the pyramid.
By this same logic, I did $500 in manufacturing this quarter because I assembled two Billy bookcase... nah.
You don't know anyone because... we don't do a lot of manufacturing. The pre-made imported parts come into a handful of Toyota factories, and a whole bunch of very expensive SUVs come out. That's how you can get such a high $$$ number and not know anyone who works manufacturing.
Sure, the whole supply chain is not in the US, and less of it is in the US than in past decades. That is not the point.
You probably don't know anyone who works in manufacturing because you're in the demographic that reads hackernews. Using the automotive industry as an example is a big tell, you know, because a whole lot more than cars is manufactured in the US. Manufacturing is not a huge percentage of US employment, but it is much, much bigger than you think in raw numbers. Go look it up - 67,000 does not move the needle, though it's a big percentage of new jobs.
It’s not real manufacturing. All the real components from screws to relays to sheet metal and injection molded plastic parts are made somewhere other than the US.
But yeah, if you export 300 787’s and A320’s each year, you’ll get the false impression the US is a manufacturing “powerhouse.”
You're just wrong. Yes, US manufacturing is mostly high-value-add stuff. Because wages are high. Don't go into hock to start a toothpick factory in the USA. But go look up how many people are employed in manufacturing. 67,000 does not move the needle, though it's probably a lot as a percentage of new jobs.
And automotive and aerospace are not the two biggest sectors of US manufacturing. (Boeing was the largest exporter for years though, probably still is). Look it up.
Is mating two fuselage sections made in Mexico and slapping on engines made in Malaysia manufacturing? Not in my book. That’s assembly, not manufacturing, regardless of how lucrative it may be.
You're just wrong. US manufacturing is a lot more than final assembly of airplanes and automobiles. Aerospace and automotive aren't the top manufacturing sectors either. You're just wrong about that. You can look up that you're just wrong, but you're not bothering to. You can look up that final assembly is manufacturing - your book is just wrong. Why should I take "your book" seriously about anything?
> US manufacturing is a lot more than final assembly of airplanes and automobiles.
The truth of the matter is the bulk of the components that matter in those products are made somewhere other than the US. The hard work is done elsewhere.
I just replaced a capacitor in my 2009 Maytag washing machine. Original capacitor was made in Mexico. The replacement was from Taiwan. The motor was made in China. Every product "made" in the US is a hodgepodge of imported components.
> You can look up that final assembly is manufacturing
I don't dispute that that's how it gets measured in official statistics, but I'm telling you it's a misrepresentation of what's actually occurring in industry.
I work for an OEM aerospace manufacturer. Fuselages get made in Mexico. Wings get made in Japan. Engines get made in Europe and most parts for them are sourced from Russia, which is causing major shortages right now. Landing gear are forged in Brazil. We used to do it all here in the US, now we have a paint booth and a service center. But hey, final assembly is manufacturing! The US is an industrial powerhouse!
Seriously, go look around your house. Show me a piece of furniture or appliance that was made in the US. You can't. You'd be lucky to have one that was assembled in the US. Shoot, your phone and computer probably weren't even made here. And if they were, again, the important parts that took all the work were probably made in Asia.
Believe me, I wish I were wrong. I would love to be wrong. But you saying I'm wrong doesn't change reality. Stop believing statistics that are built on lies and start believing what you can clearly see before your very eyes.
You didn't look anything up. You're just wrong, so you came up with a story instead, and tried to move the goalposts to something like the FTC's "Made in the USA" qualifications - which I wasn't arguing. What are the two largest sectors of US manufacturing?
Most of the furniture in my house was made in the US, because I'm not poor. Furniture is one of the easiest things to buy American. Good furniture is not cheap but it's not out of reach for the middle class either.
The materials your house was constructed from were mostly made in the US: lumber doesn't come directly from the earth nor does sheetrock or siding etc. These materials are manufactured.
Most of the books in my house were printed and bound in the US from paper made in US papermills.
Most of my appliances were, as you are careful to point out, assembled in the US. All of the large appliances were.
Almost all of the food in my pantry, refrigerator, and freezer that is in boxes, cans, or jars was processed and packaged in the US: that is manufacturing. If you don't think that's hard work, you should try it.
If you have any medications in your house, they were very probably made in the US. The gas in your car was almost certainly refined in the US. Your shampoo and deodorant and other personal care items, unless you deliberately buy imported, were made in the USA.
The important part that makes my computer work was made in the US, and yours probably was too. Some other bits also. That is very high tech, capital intensive manufacturing, high value-add, and while Taiwan is basically caught up, the US is still very competitive.
Sorry about your employer's poorly implemented global supply chain fiasco, which pretty much identifies it even to people outside your industry. But it's not the whole story of US industry.
We live on one planet. Offshoring makes pollution a lot worse by not only moving it to where there's lax regulations but adding a whole bunch of additional energy cost to ship everything back here.
Manufacturing where there are environmental regulations will push improvements in efficiency and waste management too, making the process more efficient in the long run.
Depends what sort of pollution though - obviously if you're talking GHG emissions or many other small-molecule airborne pollutants (though not CO) it doesn't really matter where it's being emitted. But other sorts of pollution are much more local, and depending on the surrounding ecosystem (esp. waterways) and level of human habitation, it very much may well make sense to ensure it only occurs in areas where it will have less harmful effect.
About the only tax increase in USA I would support is an incoming environmental parity tariff. Make iStuff in China India Indonesia, though the incoming environmental tariff won't make it cheaper to pollute over there.
It’s a fantasy to think we can have modern society without some form of environmental damage, and it’s also a fantasy to believe that factory jobs would be less damaging to the environment if they were located in other countries.
No worries about air quality as we will keep the smelters in .mx and pollute there. The input constraints for
USA manufacturing will be process water and reliable affordable power.
Cept in San Francisco, it swirls all the way from China and like 18% of the air pollution is from there. Like it was a suckafucking Japanese balloon bomb, the first intercontinental ranged weapon, only dent the Japanese made in the Manhattan Project was with that balloon. Very overpowered.
Correlation isn't causation. That time was when only the US was able to make things, as most other first world places were devastated, and also the US got to call in its incredible loans from WW2.
China has a de-ranged Autocrat, and a Covid vaccine that just doesn't work. The only tool they have to try to contain Covid is aggressive quarantine, which has taken a large part of their economy offline.
The US is going to have to double it's manufacturing base in the next decade as the world deglobalizes.
Yes, but even so, we're going into a perpetual labor shortage due to the population pyramid.
Even CNC machines need people to program them, load/unload parts, tools, empty the chips, replace lubricant, etc. Parts have to be inspected, packed for shipping, etc.
There are a lot of people involved in manufacturing, the vast factories with no people in them and lights out are the rare exception.
That graph is for total population to manufacturing population. kube-system is probably referring to the least paying jobs, in service businesses like hotels agents, housekeepers, fast food employees, retail employees, etc.
This reminds me of a quote from one of my favorite short stories, "The dollar was strong and jobs were plentiful, so when the factory in town announced they were hiring, hundreds of people applied. John was one of the lucky few who got a job. The hours were long and the work was hard, but John was grateful to have a job that paid well. With the extra money, he was able to buy his family a new house."
It will continue. The dollar is rising because people need American stuff, not in spite of it. So long as Europe doesn’t have Russian gas, the rest of the world will be competing over a much smaller pool of energy in the form of LNG meaning it’s just much more expensive to do manufacturing.
It’s not black and white but I would expect energy burdens to outweigh labor burdens for a good long while.
> The dollar is rising because people need American stuff, not in spite of it.
Need is doing a lot of work here. Recently our trade deficit recovered from a trough of growing at the rate of $100 billion a month back to $70 billion a month. For comparison, during the entire 2010s, it only grew by $40 billion a month. We haven't had a trade surplus since 1991, when we managed it for a quarter, and before then not since Reagan was elected.
1) Europe is set for a decade of decline and money is fleeing it.
2) this has been the case for decades and isn’t novel at all. It is noteworthy however when your usd denominated debt becomes much more expensive due to currency exchanges
Why not both? This huge workforce called the boomers accelerated their retirement during COVID and those workers don't entirely have a 1-to 1 replacement given that a sizable chunk of their kids majored in things like underwater basket weaving. Gen-Z is much smaller and is really focused on tech jobs, they are not going to make up the numbers. Where are you going to make up the shortfall? (BTW I understand that this is the Peter Zeihan POV).
The US is not constrained by labor supply in the slightest. The basket weaving comment is inaccurate, irrelevant, and mostly just jaded cynicism. Gen Z is not focused on tech jobs either to any sort of meaningful extent that we can’t build up manufacturing.
If the US needs to make up a shortfall, it will simply open up immigration more.
It’s not so simple when the labor crunch is being felt in vast regions of the globe and many (most?) developing nations are aging faster than the US and are older on average or will be over the next 10 - 20 years.
If the relatively young population segments we’d need to draw from are in rapid decline, as they are across the western hemisphere then it doesn’t matter how much cash we have if there’s no one left to emigrate here.
You get it. There will be a serious labor crunch over the next few years as boomers continue to retire and immigrations fails to make up the numbers. Maybe massive re-training programs to get aging millennials into in-demand fields? Zeihan essentially says that while the US will still be in the best position it will still be painful and to just accept the pain until Gen Alpha comes online in 20-30 years. I don't buy this part of his thesis. Will millennials produce the number of kids needed to offset their losses?
Will this be like the commodities surge in Australia that had truckers and miners making > 100k with the equivalent of HS diplomas because the demand from China for such materials was so high only for the whole thing to collapse when demand fell?
I wonder if Europe is seeing a similar trend. The factory I work for laid of 3/4 of its personnel and moved most production to our sister factory in another European country(with similar labor costs). I just assumed times were tough overall.
Many European companies are starting/considering to move to the US attracted by the low energy prices. So from what I know, actually the opposite seems to be happening in Europe.
Sadly, politicians were not able to say no to the US even when they were told to run full speed towards a 300m cliff.
Buy and hold VOO or VTI or any other broad market low cost index fund. Unless you have information others do not (which usually disqualifies people getting informed by NYTimes). Time in the market > timing the market.
But the people giddy for the collapse of tech are going to be thrilled!
The tech bubble continues to persist because people don't know where else to put their money. The tech bubble started because of the 2008 crash, investors needed a place to park their cash to see it grow, and tech seemed the best bet. That plus cheap capital meant throwing everything into tech no matter how ridiculous the fundamentals were.
If this is really a trend we'll see the expedited crash of tech as money floods into manufacturing.
There are plenty of tech companies that build real products and deliver real value. Some of them even take VC money. There will probably be less money flowing into businesses that look to grow to category dominance in the B2C space, but there's still so many places in the economy that could see productivity gains from adopting boring tech.
I think the Warren quote about "when the tide goes out, you realize who's naked" applies here. Tech is in every industry at this point, so it feels unlikely to fully crash as a sector. The recession and lack of cheap VC funding will expose the companies that don't actually have a reasonable business plan, but leave those that do. In other words, "make up the losses on volume" speculative companies will have a winter, but solid businesses (so many! medical equipment, logistics, entertainment, self-driving car progress) will weather the storm ok.
I feel this is a reversing of the trend the last few decades. Asset prices dropping, tech in a hole, lowest earning workers getting the biggest raises.
What? What assets arent dropping? The two examples below, used cars and real estate are now definitively losing value. Even oil and commidities arent up much any more.
Europe either finds local and reliable energy sources or goes back to stone ages. Europe's problem is lack of energy and traditionalism, for the later maybe the Internet will eventually solve it but for the former the options are not good in short term.
Actually, EU did a good job regulating everything consumer into efficiency however for the industry there's hard limit how much energy you need. Renewables can't come soon enough.
Europe went a different path than the US. Essentially, after cheap Eastern European countries have joined the EU, a lot of manufacturing was moved there.
I'm from Poland, so I know the situation fairly well. The trajectory here was that a lot of communist manufacturing plants were closed in the 90ies (after transition to market economy), because they were just not economically viable (something that was not deemed a problem for communists, until the whole system collapsed). Many others have drastically reduced employment, as again communists were hiding unemployment by giving people jobs in companies that didn't need them.
But, since Poland joined the EU in 2004, the trend has reversed. There's now plenty of (mostly foreign-owned) manufacturing plants around the country.
