The decline of high-tech manufacturing in the United States

One example they gave, it used to be someone's job to load and unload the silicon wafers into the various etching phases. As time went on more and more of that manual work was replaced with automation. A floor with 50 workers became 25, then 10, then 1.

And, to be clear, this was absolutely a good thing for the product. So many yield issues were caused by manual processes.

The future of any manufacturing is that of high automation. That means low to no jobs. We aren't going back to an economy where a shoe factory employes 500 people.

What's particularly bleak, IMO, is society in the US revolves around work. Every job out there is being automated away. That's not a bad thing for quality, but what it means is there will be increasingly fewer jobs to go around.

Try to have a device made without sourcing parts of China. Maybe an assembled PCB. Maybe it's a tool of some sort. You will find that this is impossible, or much more expensive/worse experience than sourcing from China.

Now, imagine a scenario where China collapses. (In the broadest sense). Whether it's a war as you say, or any other scenario. Imagine this happens in a few decades, after we (The world) has committed to this path. We will have lost so much of the tools we build our civilization on, and it will take generations to get this tacit knowledge back.

What's good: We (humanity) can build things cheaper, and higher quality than ever before, thanks to China's exquisite, vertically-integrated, and automated manufacturing capabilities.

What's bad: We are putting our eggs in one basket.

It's interesting that you mention this because most of the small-time inventors I've seen online in the electronics space either build things in their garage by hand or have them fabricated in China (or occasionally another poor country like Vietnam). Custom PCB production and assembly at places like JLCPCB and PCBWay (both in China) appears to be highly automated. But getting the same thing made in the US in smaller quantity is going to cost not a little bit more, but often ten times as much. And it will require "relationship building" with a job shop, rather than just uploading something to a website and paying for airmail delivery. And will likely have a longer lead time. To say nothing of the fact that most of the components you're buying are made in China anyway.

So it may be fine to manufacture a large run finished consumer product in the US, but it's very capital intensive. For new products that aren't attached to an existing massive corporation with domestic production capability, you basically have to outsource to be price competitive and do any kind of volume beyond your own garage. I would be love to be proven wrong and learn about other options in the US but when I looked around I wasn't too impressed.

The dip in number of manufacturing employees corresponds time-wise to China joining WTO, and the massive CEO hype of shutting down US factories and moving them to China, rather than super-duper automation hitting the scene and automating the factories in place.

I have a suspicion that the displayed manufacturing output chart is in dollars, not amount of stuff, and that is likely bumped up by highly automated IC/chip manufacturing that is high cost/value, but low tonnage work.

Politicians who pitch “I match your worldview and will implement the simple fixes you want” outcompete “I think your worldview is incomplete and this is what you really want instead”, by a lot.

Some might be very crafty and believe the second while shouting like the first. Many will actually believe the simple solution can work though.

It might well be true that we're never going to see the kind of employment in manufacturing that we used to, but a blanket "the jobs are not coming back" attitude doesn't match the data either.

1. During Covid, medical supplies were in short supply, to the point where the US government was flying in individual airplanes from China full of N95 masks and face shields. The guy making the video knew that Alabama (where he lives) wouldn't be on the priority list for where the masks and face shields would get distributed. His community's initial response was to 3D print face shields and donate them to healthcare facilities, but they knew that they had to step up to actual manufacturing to produce the face shields in necessary volumes. He was only able to find a single aging technician in Alabama capable of producing injection molding tooling, which he then was able to use to mass produce enough face shields to supply Alabama and neighboring states. If that one guy had chosen to retire before Covid, they would have not been able to make the injection mold locally. At a time where global supply chains were massively disrupted, they would have been screwed.

2. When an American company gets their products made overseas, the factory overseas that manufactures the product owns the tooling. This means that they're able to fill your order during the day, then at night make exact clones of your product with lower quality materials and undercut you, and you have no recourse. He brings up an example of a local small business that had this happen to them. Even though they had a design patent, they needed their lawyer to continually send letters to get Amazon to take down no-name clones of their product (and then the seller would just pick a new random set of 6 characters to sell it under). If US companies have no choice but to get their products made in countries that don't care about IP, then we're not just giving up on manufacturing, we're also giving up on designing products in the US.

When he was trying to get the injection mold for his grill scrubber made, lots of companies in the US were willing to do the actual plastic manufacturing in the US, but could only get the injection mold tooling done in China. He brought up that in the past, an American company would build a machine and then ship it away to the developing world to be operated there. We've now reversed this, so the high-skill portion of manufacturing is done overseas and the only Americans involved are just pushing the buttons to operate the machine.

Will we? It appears to me that modern war works substantially like modern factories - you don't actually want a large mass of semiskilled workers to pull the levers, each of which can substitute for a different one on about five minutes' notice. You want relatively few, highly-trained specialists to instruct the ~~robots~~ drones. It is perhaps less true in war than in manufacturing, quantity still has that quality all its own, but it seems very unclear that just raw numbers of soldiers will be an important bottleneck as between Great Powers.

When I buy an iPhone, a vacuum (robotic or handheld), a drone, a camera, a KitchenAid kettle, a silicone brush, an electric fan, a battery-electric drill, just about anything really -- the expensive models might say "designed in USA" but they'll still say "made in China". The US used to be the go-to place to make all of these categories of products. So I don't believe the only thing that's happened is that American factories set up robots, laid off the workers, and got more productive than ever.

E.g., in semiconductor fabrication - over the past decade, Intel’s chip production and process nodes have lagged 1–2 generations behind leading non-U.S. manufacturers.

And on top of it you retain the knowledge to build, assemble and maintain these robots. This is alone worth the effort.

Yay. Men get to spill their blood over a country that won't even give them enough pay to cover rent. The robots are cushy at home making weapons to kill more men with. Very good thing.

> If you expect someone with a high-school degree to be able to own a home today, the solution is not to put them to work in a factory, but to automate building houses and get rid of zoning/permitting constraints so that there are actually enough houses for everybody.

Yup, just automate out the construction industry while we're at it.

Sorry for the cynicism, but but somehow I don't think even with more houses that we're going to have Gen Z and Gen Alpha survive the way The Boomers and early Gen X did.

Edit: I looked it up, it’s a lot of things. Airplanes, military aircraft, helicopters, satellites, rockets, construction/agriculture equipment (Caterpillar, John Deere), ICE and EV cars, chips, medical equipment (MRI, CT scanners), lots of defense stuff, drugs and pharmaceutical, processed agri goods etc.

That said, we can bring manufacturing back stateside which can be highly automated and have high value while employing workers at wages much better than their service-job counterparts.

In addition, we don't have the same population growth we had in the post-war years, so we don't need to produce millions upon millions of jobs. What we need to do is stem the job losses and increase output.

We can be a bigger version of Switzerland. Sure, things get more expensive, but by and large folks live better.

I think that I have seen that this kind of "independence" has been a driving reason for China's strategies too. I don't think that it's necessarily a defence against a war, maybe more of an economic buffer, ensuring that China, and whomever follows the strategy is no longer dependent on any other entity for parts of their supply chain.

One of the things, too, that people seem to forget is that the West (in general) has neglected their manufacturing capability in favour of the "Asian Tigers" doing the work (Japan, Korea, Taiwan), China is just the current holder of the title (for how long is anyone's guess, Japan especially has endured a sustained stagnation of their economy over the last several decades).

Germany, for a while, was a strong manufacturer, and have (so far) been using the resulting economic position to their advantage inside the European Bloc. Perhaps that's the model that the USA (and others) should be looking toward?

If you really had an automation boom, this will show up as an increase in output. If there is no increase in output and an increase in demand, the prices/margins improve which might explain why producers are happy but they won’t be able to export their products; which they might not want to do as China has killed any possible margins.

The problem is that these two concepts are treated as one.

Also, a major pet peeve of mine for over a decade now has been the lack of granularity in classifying "high tech" jobs.

Most studies use BLS codes, but those are extremely dated - they still treat a typist like a skilled worker and a machinist as a semi- or low-skilled worker.

In reality, aside from macro-level production stats and private sector signals such as dealflow, we have no idea about the rate of production in the US.

From personal experience, I doubt any "make in America" policy would lead to more jobs - most low and medium level assembly roles have been automation friendly for decades now (even in India you can buy and install a programmable soldering robot for roughly the same amount as a year's salary for an employee).

Most discourse is divorced from reality, I blame this on the lack of engineers in the policy space - most of us with those backgrounds would rather remain in the private sector, because an LA or think tank staffer salary ain't making rent in DC.

If you do not know the difference between AC or DC or what solder flux is, let alone further intricacies, you have no position making industrial policy or grand strategy for American manufacturing or engineering (this is a shot fired at you so called "Software Engineers" as well - Leetcode doesn't mean you understand how Infiniband works). But this principal also works in reverse w/ regards to policy matters imo.

The military benefited from the massive industrial base that supported this production - but it didn’t create it.

And now the loss of that domestic manufacturing base is largely why military production - and indeed, any kind of large-scale endeavor in the US, including construction - is slow and expensive.

[1] https://fred.stlouisfed.org/series/CIVPART/

Many people and towns that lost work in the manufacturing shut downs still don't have replacement work, and I think part of that is we lost a lot of low-skilled labour work as the factories left.

Now a question would be, if the work does come back, will it be low skilled enough to be able to hire the same pool of people formerly employed?

> Besides that, bringing everything back would surely raise prices quite substantially and we've seen how voters reacted to COVID inflation.

Agreed, but if both parties get behind it, I don’t think it would matter too much.

1) Meet or exceed spec (this shouldn't be a problem)

2) Lower TCO than competition -- labor, automation (this is where the US is current uncompetitive on the lower-end, very competitive on the high-end).

3) Non-cost strategic requirements compared to the competition -- supply chain resilience, national security, lower lead time, consumer preference for US made (but not all products fall into these categories)

4) Benefit from policy intervention like subsidies, tariffs, tax incentives and regulations vis-a-vis competition (the problem with these protections is they make US products uncompetitive in the long run in the international market -- US cars for instance are not competitive in most countries)

Sanctions weren’t effective on Russia because they had most of what they needed domestically and partner markets to sell those goods to.

When the US tried to impose sanctions on China, China called the bluff and blocked strategic materials. The US “trade deal” wasn’t much different than how it started.

In terms of willing to pay for it; what’s having a country worth? Because if a competing country can withhold resources you need, you’re effectively a junior partner.

Ultimately, reduce over seas benefits, tariff and offer tax write offs to build on shore. Then you’ll have better higher paying jobs and onshore manufacturing. More real GDP from goods will not have a negative impact or cost, it’s part of why Germany and Japan grew rapidly (they had tight import controls, to build a domestic industry).

Also, the majority of the country voted for Trump and this was his #1 issue. Like him or hate him, the desire for domestic protection is what elected him.

When we started shipping manufacturing jobs overseas people in power would say that the future was in service jobs. Ha! What a joke. Every population has a bell curve distribution --i.e. not everyone can work toward being a high value-add service jobber.

We manufactured high end handsets (Motorola) stateside till roughly 2014. Sun manufactured workstations in the East bay. If you go back further Cisco and 3Com used to manufacture in the South bay.

It was better than working at Mickey D's. So, yeah, we'd want these stateside. Better than having people out in the streets strung out on drugs not even aware their lives are going down a whirlpool.

Everyone since Obama paid lip service to bringing back manufacturing jobs --they were doing this to pretend they cared about the blue collar folks Clinton, G "H" W and G "W" sold out. I blame Clinton the most because he just let China ascend to the WTO despite knowing the Chinese had loopholes allowing them to ignore much of the conditions. "W" just didn't care.

This is true even if you deal with companies that supply to the military.

> Just subcontract work to China.

The thing that kills me is that dealing with China is so much easier than dealing with anywhere else.

Part of it seems to be an attitude thing. Like, if I shoot somebody in China an email, it will inevitably be answered within 24 hours, and more likely within 4.

Send an email to an EU or US company, and you're often (I'd say typically) going to wait days for a response. I've never seen that, not once, in dealing with a Chinese firm. What's more, if you're buying from their B2B megamarkets (like 1688.com) they almost always have live 24/7 customer service and procurement support available on chat.

The other part is that, if you know what you're doing, it's less risky. I was chatting with a French vineyard owner a couple of years ago. He was pulling white vines to plant more red varieties, because his best clients, the Chinese, preferred reds. He told me that dealing with China was easy -- they'd always pay in advance, and a handshake deal was always honored. Dealing with the US, in contrast, was a nightmare of legal quicksand, double-dealing, and Net-30 that always seemed to turn into Net-90.

But once you're having your parts heat-treated by one Chinese company, electroplated by another, and over-molded by a third, you really may as well move the whole production line there.

To be fair, the current powers are trying to pretend we're rafting in a chocolate river, because we won a golden ticket and it's gonna make us rich. Whether that's on the adminsitration for lying or the people for believing, that's for the reader to place blame on.

Yep. I've watched things for some time, and I think almost everyone is stuck in a "I was 20 years old and things were like X" mentality. Including their take on China capabilities.

Yes, China was the place you outsourced cheap BS that had horrible quality to 25 years ago for stupid cheap labor and materials.

Today? You are not outsourcing to save money, at least in the direct sense. You are outsourcing there because it may be the only place in the world that can get shit done for you in a reasonable time with a reasonable competency level.

And at this point? It's basically the entire value chain short of product marketing and branding for many products. All the technical design knowledge is located there for the most part, and operates at lightspeed compared to the US.

If we went to war it'd be over as soon as the weapons stockpiles got depleted - only one side has the capability to manufacturer at scale. And it's not even like a mismatch - it's an ability vs. complete inability.