Manufacturing and Employment

There has been a lot of talk in recent years about the decline of manufacturing and manufacturing jobs in the US, much of it misguided. We still make a lot of stuff in the US. More than ever, in fact, and more than any other country including China. Manufacturing output measured in dollar value has been steadily increasing since 1970 and before. This is true even after adjusting for inflation and US population growth.

Manufacturing value per capita:

1970   $1,225
1980   $2,578
1990   $4,186
2000   $5,387
2010   $6,011

Source: Statistical Abstract of the US

So what about jobs? We hear every day that we are exporting all our manufacturing jobs to China and Mexico. Yes, some of our production is going to China and other places. That’s not why manufacturing jobs are disappearing. Dr Kevin Grier is a professor of economics at U Oklahoma. He recently published this graph in his blog “Kids prefer cheese”  http://mungowitzend.blogspot.com/2016/04/hey-trump-and-sanders-manufacturings.html

How can that be? If output is going up and jobs are going down, what’s happening?

What’s happening is productivity. A 1960 packaging line might have 8-10 operators applying labels by hand to liquor bottles at a rate of 80-100 bottles per minute total as:

This picture is taken from a Youtube video of Seagrams in the 1960’s. Those jobs no longer exist because a modern labeler can label 500 bpm. An operator is required only to occasionally replenish the label supply.

We’ve been hearing for 250 years, since the English Luddites, how automation kills jobs. Yes, those label applying jobs no longer exist and we should probably be thankful. They took a physical toll and were not particularly well-paid or rewarding jobs. Don’t worry about the operators, as manufacturing employment declined, overall employment increased. In the meantime everyone, including the operators got the benefit of better quality and lower prices from automation.

Manual work has one big advantage over automation and that is flexibility. Your customers are demanding more and more variety of products and automation may make this more difficult. Fortunately, machines are becoming more flexible as well. Attention to detail in machine and line design can go a long way to helping satisfy your customers in an economical and timely fashion.

At Frain we know automation and we know flexibility. More importantly, we know how to make them work together. Visit www.fraingroup.com or give us a call at 630-629-9900 and let us show you.