With all the doom and gloom in this thread, let us keep in mind... We are still one of the top manufacturing nations on this planet. Jobs are being created today, not lost. IMO, manufacturing has been one of the best performing sectors during this recession. Most shops are flush with work, and most customers are desperately seeking more manufacturers to handle their backlog of work. This is the real cost of not having an adequate supply of labor... Lost economic opportunity. There could be many more Americans working today if they only had the right skillset.
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Originally Posted by DSOs
C’mon andywire. Re-read post #37, it’s all there.
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What I said was shops have found ways to limit their need for engineers because skilled labor is doing much of their work now. Many of the "engineers" I have worked with are actually just machinists with HS diplomas and years of targeted experience. They get the job done faster, work all the OT, don't mind getting dirty, and many times work cheaper or appreciate decent pay for what it is. The engineer coming out of college expects the same wage that the machinist earns after 10 years of experience, so the graduate gets priced out of the market.
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Originally Posted by DSOs
It’s all right here in your quotes: They don’t hire expensive engineers because it hits companies bottom lines—especially when they’re standing idle because of the lack of work pertaining to their engineering skills. With a little imagination, you can connect the dots & realize that expensive skilled machinists ALSO affect a company’s bottom line.
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Yes they do. The company also needs them to keep the machines running, do the programing, fix the machines when they are down (down machines cost money in financing and lost production time), evaluate blue prints, consult with customers, develop manufacturing processes, figure out what tools the company will need, make the tools on occasion, figure out how to fix the many problems that always pop up, train new workers, hire workers who will be a good fit, figure out what machines will be a good investment... I could go on, but I will simply say, they earn their keep. Shops realize a skilled machinist is an absolute necessity and an indispensable asset.
Every employee affects the bottom line. You can't treat a patient without a doctor though... Just the same, you can't have a part made without a machinist manipulating the machinery. The only difference today is the machinery is far more sophisticated, and often times, finding the machinist who is familiar with your particular machine is quite a challenge.
At any rate, here's a quick question... Who is more likely to grab a broom and clean the floor if they have some down time... The machinist who started off cleaning the shop floors in their teens, or the engineer who graduated college and was handed a well paying job?
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Originally Posted by DSOs
Wrong! Do you realize how wacky/ ridiculous this sounds? I’ve had billboards by me too—a 10 man, pillar of the community machine shop that's located 45 miles away. Why would a BUSY shop want to hire a long distance employee with potential car/traffic/children/obstacles? There are other dubious reasons for billboards & chronic searches for employees!   |
Because for years, companies were not training because there was a glut of manual machinists to choose from an retrain accordingly. As technology reduced the need for machinists, companies had no reason to train. The wages were also pretty stagnant, and the young folks found many better opportunities elsewhere. Like any other profession though, there are always companies that do easy work, don't require high skilled professionals, and try to pay as little as possible. Not all machinists do the same level of work, and not all can transition from one area to another.
Another issue... Those older guys were easy to train on computer controlled equipment. They made things on manual machines, and everything going on in a computer controlled machine is the same as a manual machine. The only difference is the computer is doing what you tell it to do. Their skills were transitional, there was armies of slowly displaced manual machinist, and so you didn't have to pay much to get those workers. Today, those old school skills are being lost. You can train a kid on the computer controlled equipment, but if he doesn't have any idea about what's going on in the machine, he will not produce the desired results. Companies are finding machinists in short supply as they retire, and they are having trouble finding a way to train younger folks to run the machines, because they have no practical experience.
As I mentioned, I came to Chicago a year ago off a train and had a job at the end of the day. It's that easy, and the wages are decent. Our shop has gone through 3 CNC machinists in the past 6 months who simply could not do the job. They are not easy to find today. And the wages were $35/hr with full health insurance, 4% matched 401K, dental and life insurance.... Still couldn't find the right guy for the job. I would suggest that's good evidence of a labor shortage.
I also know Pratt and Whitney has been laying off engineers left and right while putting their machinist apprenticeship program into full gear... With a starting wage of $17/hr for someone with zero experience. Notice a trend???
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Originally Posted by DSOs
Wrong AGAIN! Automation is a real job killer for skilled labor. The idea of innovation/modernization is to make work simpler & more efficient. Steve Jobs understood that pushing green buttons & inspecting parts is where the skill/profits materialize!** Look around, 7-year-old children (proto-engineers) are using the relatively simple computers/cameras/etc...
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True for operator level jobs. You still need someone to program the equipment, know what is going to happen, know why problems are occurring and how to solve them... It's not nearly as simple as "pushing the green button" for higher level jobs. Computers reduce the need for an army of machinists, but it also creates a few positions in the process for considerably more skilled and knowledgeable ones. It also makes the job much easier on the body thankfully. The job today is more brains than brawns.
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Originally Posted by DSOs
**Cut me some slack; skilled engineering (methodizing) is important, but spitting out quality parts is just as important today IMHO.
Note: Arguably, aircraft & spacecraft may be a different story for now; but there’s no reason to think so for much longer.
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And medical, and diesel, and hydraulics, and pneumatics, and exotic materials, and some automotive... At the very least, you want someone whose not going to destroy a piece of metal that has already had 40 hours of work put into it. Try hiring $10/hr help for that job and see how long you stay in business
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Originally Posted by jimhcom
What are you going to do with someone with an associate degree? There is no real job and associate degree prepares you for that you could not train someone to do in six months.
Spending time in a classroom does not equate to intelligence.
What American corporations need to do, which none of them do, is to accurately assess the workers they have. Most people who work in the corporate world will tell you that some of the most intelligent and capable people they have are in lower tier positions due to the fact that they don't have a degree.
Today in this country, a degree is more a function of money and circumstance than intelligence.
How many companies ever give their employees an IQ test or an aptitude test to see what their real abilities are?
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At my current job, I had to take a math and technical skills exam to get the job. I did not graduate college mind you... Most technical and skilled labor jobs care about what you know and can do, not where you learned it. If I'm handed a blue print and I have that part by lunch time, I have the job. For such a job, I can work for $28/hr if I want to be worked like a dog, but I settle for the 40K-50K shop that will treat me like a human, and doesn't care if I don't want to work 80 hours a week.
But at any rate, many associate degree programs do provide adequate training without all the fluff classes. My brother jumped right into the engineering profession with his degree. When times got tight, all the engineers with bachelors degrees were laid off. Everyone else kept their job because they were willing to work for $13/hr while the auto industry sorted itself out. My brother went back to +$20/hr within a year, but it was scary I'm sure.
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Originally Posted by jimhcom
They come out of college and get on a management track with a company without ever learning a thing about the core business. Then when incompetent management runs it into the ground they blame the employees or the union or someone else that is not in charge. But they really don’t care because they have a golden parachute, and they will probably get bailed out at taxpayers’ expense anyway. It is all a freekin joke.
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I think things are changing. A few friends of mine graduated with business management degrees and can't find any work. My friends with technical degrees and degrees that actually teach you to do something are gainfully employed. I also have other friends in the manufacturing sector who did not go to college. They are buying houses, new cars, all the same things that other honest working folk do during a normal economy. There is still a place for the technically and mechanically competent in this country, but most people don't have exposure to that. I also helped a friend of mine who just got out of the military get a job in a fabrication shop. He's going to be working on some really modern and cutting edge technology that will make him very marketable in the coming years. People would be amazed by some of the latest technology, and how it is transforming the way things are made.
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Originally Posted by texdav
The name of the game is competing or going under ;as its always been. I agree that China is goig to be the fastest growig market i time and any nation not ahving acess will be reduced to grek type growth.All this China hate reminds me of the past Japanese hate ;but look at what has happened to the Japanese.
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Exactly. China started out doing all of our garbage holiday ornament, mardi gras bead work. That really sucked for those who made a career slapping a "made in U.S.A" sticker on the package. Just like Japan though, their wages will rise and they will realize the real money is in more complex, more demanding work like technology. They will have to evolve in order to keep up with rising wages. They will also find that modern machinery is going to be a far more significant expense than labor, just like in this country. At that point, having the most competent workforce will the the front and center focus.
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Originally Posted by bxlefty23
you commented on half of my post not the whole thing although i do agree with your reasoning
what your graphs show is the automation is doing most of the work and you can use anyone who isnt completely brain dead to do most of those jobs hence most people doing those jobs not being worth 30 dollars an hour
A perfect example is the drastically overpaid union auto workers
When you have people making 50 dollars an hour to do something that lots of people who are either unemployeed or working for penuts somewhere else can do as good or better then they are drastically overpaid.They are not actually producing anything of value to their company regardless of what the product sells for because tons of other people out there would be happy to do the same job for 15 dollars an hour and do it just as well. They are in fact costing their company 35 dollars an hour by being there.
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To a point, this is true. Those low skilled non union jobs pay about $10/hr, but most of that is due to illegal immigrants working and taking tax payer subsidies to make ends meet. That really defies the free market in many ways. I would rather have a country full of employed, well paid union employees than a country filled with parasites who drag the wage structure down for everyone, and suck more resources than they can produce. You could argue that those jobs would go to China, but many would not. You can't build an infinite number of cars and expect them all to sell. You have to have auto workers in this country making parts to match market demand. You must have those suppliers and plants close to the assembly point, and close to the potential market. That's why auto makers always build plants within the market they intend to sell.
And many jobs may be low skilled, but certainly not all. You still need someone to program the equipment (which can easily be a $30-$40/hr job) and you still need someone to set them up (which can be a $20/hr job on complex equipment). Mind you, I've made considerably more than I would have made had I stayed in my union position during and after HS. You also need maintenance workers, quality control inspectors, machine service personal, tool makers, vendors, suppliers, as well as a whole host of workers to perform additional operation such as grinding, lapping, heat treating... You also need people with brains to figure out the best process, stay on top of modern progress in the field, people to count the beans, people who know the work who can sell the businesses services... There are tons of diverse areas within the manufacturing sector that require advanced experience and skills.
You don't just walk into those jobs. You acquire those skills, generally by starting off on the floor somewhere and progressing. That's part of the reason there is a noticeable skills shortage. Smart people don't work for $8/hr doing crappy work. Immigrant perhaps, but not many Americans. If the boss doesn't have access to quality candidates for higher training, he will try to hire those skills outside, further depleting the pool of available skilled workers.
What I try to emphasis about automated equipment... Yes, they create the opportunity for the boss to hire low wage labor. It also serves as a roadblock to acquiring the people worth training for skilled professions down the road. You still need someone who knows what going on in that automated equipment. You still need to know how tools are going to behave when making contact with various materials at various speeds. Lots of little things that are only acquired by experience and exposure to the work.
And by the way... That $50 worker (management maybe???) is not costing his boss any more than the $10/hr worker if the boss is able to price his time into the cost of the product. For many years, workers were well paid and customers were able to afford the products. That worker was not driving his company into bankruptcy. What changed was the introduction of products made in countries with significantly lower labor costs and COL. No matter what field you work it, you will feel the effects when your customers (maybe lower paid manufacturing workers?) cannot afford your 100K/yr salary. Everybody has felt the effects as reflected by the stagnating wages in this country. I wouldn't be so quick to celebrate the demise of union labor, because they are consumers too.
Furthermore, very few manufacturing worker are unionized anymore. You're talking about an issue that may have been relevant a couple decades ago. Most of us do just fine without a union. As I've mentioned, automation has gobbled up most of those jobs.
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Originally Posted by bxlefty23
to be worth a lot of money to employers you must be able to produce money for them and be hard to replace- YOU NEED TO BE BOTH
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Many type of manufacturing workers today are as you describe. Research the skilled labor shortage in the manufacturing trades. It's no joke. Most of the machinists I work with are +50 and they are going to retire whether the boss can find a replacement or not. So far as I can tell, companies are raising wages for many of these skilled professionals to bring in the help they need. Many shops and plants are restarting apprenticeship programs to bring in new blood, and actually paying pretty decent. $15/hr and good benefits is pretty good for a HS grad that's good at math and quick with computers. And guess what... They won't make their boss any money for a good year or two. The boss also realizes he can't make any money down the road if he doesn't have the required labor to do the work. Automated equipment still requires a humans hand and brain.
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Originally Posted by bxlefty23
Its the same with any job
To simplify things
If you want to be well paid you need to be valuable to the company and hard to replace
If 2 salemen each sell a product for 1000 dollars that a store sells for a 50 percent markup the store has made a 500 dollar profit
But if one product is very hard to sell, and the other is very easy to sell both salesmen are not equally valuable. the hard product to sell all likelihood would not have been sold without an excellent salesmen and the easy product likely would have been sold if the salesmen was replaced with basically any random idiot.
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And what does this have to do with outsourcing?
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Originally Posted by cpg35223
Andy Grove did an interview on this very subject a couple of years ago. Essentially, a plant that costs one billion dollars to built overseas costs two billion to build in this country. And only 10% of that excess cost is in labor. The rest is in taxes and regulations.
For example, the United States has the highest corporate tax rate in the industrialized world at 35%. Even Sweden pegs their rate at 23.5%.
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Obama did lower the tax rate for manufacturers. There was the running joke that McDonalds was going to take advantage of this by calling their restaurants "assembly lines". Not true, but it sure ruffled a lot of feathers as people took it seriously. But at any rate, Sweden also has higher labor rates in manufacturing. They are also capable of some very high quality work to justify the expense. Where America went wrong was laying waste to our education system, so our HS grads aren't capable of matching the quality of other advanced manufacturing nations. Trying to compete with China is a losing proposition. We need to get our act together if we want to stay competitive in manufacturing. There is still plenty of opportunity, but quality labor is hard to come by in the trades.
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Originally Posted by cpg35223
However, it is interesting how some companies who don't have overseas subsidiaries are taking baby steps to bring manufacturing back into the country. Why? Because rising labor costs overseas actually make domestic manufacturing competitive again in some industries. For example, one of my clients is a furniture manufacture. Roughly 45% of his production has been in China for several years. However, more and more of his production is being brought back to the states. Why? Part of it has to do with the long delays from order to delivery, as much as 16 weeks in many cases. But just as much has to do with labor costs. His labor costs have risen roughly 25% over the past two years in China, even though the Chinese currency is nominally pegged to the dollar.
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As I've mentioned, JIT manufacturing is more favorable when demand is unpredictable. Unsold inventory is taxed, and overproduction is always a cost. With another 4 years of Obama, manufacturing will continue to do well as demand will be up, down, all around, but entirely unpredictable. Also consider the costs of commodities... According to BBC news, it's more expensive to purchase steel in China than America. Part of that is supply and demand, and the rest is due to our automated processes. There is remarkably little labor required to produce steel in this country. America is doing what it has to do to compete, and that means reducing labor requirements as much as possible. Work smarter, not harder.
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Originally Posted by cpg35223
For the large majority of manufacturing jobs, major technical skills are not the issue. After all, most workers in China and Indonesia do not have very good skills. Instead it boils down to the cost of doing business in the United States, both in terms of taxation and regulation, as well as what it costs to hire, employ, and fire workers in the United States. Until we change both, we will continue to see problems.
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For many jobs this is true. For the jobs that drastically reduce the needs for labor, you need few, but highly skilled workers. Your company would go bankrupt without it. If I'm programming a machine that will be producing 1000 parts in a shift, and I miss one little detail, I just cost my company the entire day of production, my labor costs, the operators labor cost, and the commodity required to make those 1000 parts. Like any other field, the jobs have advanced to the point where higher skills are required, as well as some common sense, experience and smarts. I could hire a worker for $15/hr who will screw up and cost me 80K for the year in scrap, broken tools and service calls for machine repair, or I could pay $25/hr and get the worker who will cost 5 or 6K during the year. Do the math. Manufacturing is like any other sector of the economy. You need smart and skilled people to make money.
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