There are so many underlying changes to the established relationship between Labor and Capital in the US that would be a necessary part of keeping jobs here that it would effectively make us a completely different country.
For example -- suppose one could snap one's fingers and "bring back" millions of manufacturing jobs. What would lead one to conclude those would be the kind of "good jobs" everyone is envisioning? Historically, they were better jobs due to a strong labor movement, but that movement has been largely destroyed.
Similarly, if we want widespread prosperity, there is no reason service jobs should not be "good jobs." There is no economic rule that says that riveting should pay more than taking care of the elderly or food delivery.
We have jobs, we have just decided that the people working those jobs are not deserving of prosperity. If we re-shore jobs, what would make anyone think we would treat those jobs differently?
> There is no economic rule that says that riveting should pay more than taking care of the elderly or food delivery.
There is, in fact. Baumol's Cost Disease, and it's a real bitch.
Manufacturing has compounding productivity gains - one worker today produces vastly more than one worker in 1950. Elderly care doesn't. You can't make a caregiver 10x more productive through better tooling. The productivity ceiling is fixed by the nature of the work.
Wages across sectors compete for workers. So service-sector wages only rise when they have to bid workers away from high-productivity sectors. This predicts: service wages are borrowed from productivity gains elsewhere in the economy.
This doesn't mean we shouldn't want caregivers paid well. It means wanting isn't a mechanism. The mechanism is productivity growth in tradeable sectors pulling wages up economy-wide.
Well we still have demand in the equation. If demand for service workers grows, so will their compensation. (And so will the cost for those services.) So the possibility is there.
People with more disposable income (the high-productivity ones I guess) demand more services. The question will be whether that demand will grow sufficiently to raise the compensation to where we want it to be.
What I also don't know is how we will respond to service jobs being automated. "Premium" service usually shuns automation. Will we have fewer fast food workers and more massage therapists?
I thought about addressing this in the original post, but I want to address part of your response:
> one worker today produces vastly more than one worker in 1950. Elderly care doesn't
Indeed, this is a core component of Capital vs Labor issue I mentioned. Productivity increases, workers generate more value, but Capital's share of the results increases nonetheless. The change in this relationship is why I would expect a reinvigorated manufacturing sector to be dominated by Bad Jobs instead of the Good Jobs everybody hopes for.
(There's also a measurement issue in comparing those two. The benefits of e.g. caregiving are measured by the ability of other workers to be productive. For ex if a high-wage worker has to stay home to care for someone, then they are not doing high-wage work, which reduces the overall GDP potential of the country.)
What you’re overlooking is that productivity doesn’t increase uniformly. The low paying service sector jobs aren’t any more productive today than they were 50 years ago.
You're overlooking the main thrust of what I am saying from my top comment to the one you replied to, which is the relationship between Labor and Capital:
> Productivity increases, workers generate more value, but Capital's share of the results increases nonetheless.
To your point, this is even more true for the jobs where productivity has increased the most. Agriculture is vastly more productive today, and the share of profit captured by Capital increases every year. The main point is that productivity gains do not really matter to Labor because the benefits of those gains rarely accrue to Labor.
Put another way: there was a value capture split operant in 1950s manufacturing that contributed to factory jobs being Good Jobs. That split hasn't been operative for decades. In all likelihood, re-shoring factory jobs today would just create crappy sweatshop jobs.
Manufacturing jobs bring the entire supply chain of the manufacturer with them.
The area where I live, Greenville, SC used to be the textile capital of the world and then became essentially destitute when the entire industry offshored.
BMW and Michelin locating their US HQ here essentially rebuilt this entire corner of the state with jobs and associated supply chains. Now, Greenville is booming with a more diverse economy but all that manufacturing is the root system of prosperity here.
> Manufacturing jobs bring the entire supply chain of the manufacturer with them.
Not really... Manufacturing today is a global process and the entire supply chain is usually spread around the world.
One example for a cotton shirt (https://apps.npr.org/tshirt/): the cotton is grown in Mississippi. It's then shipped to Indonesia to spin the cotton into yarn. The yarn is shipped to Bangladesh for rough cut and sewing. The shirt is shipped to Colombia for final assembly. And finally it's shipped to the USA for purchase. Move any one of those steps to the USA, and the other steps may still be located elsewhere.
Same is true of other items, like cars. Ford may "manufacture" in the US, but the parts and tooling are sourced from elsewhere. It can't manufacture the chips here, because the tooling and process are exclusive to Taiwan. Even if you bought the plant and moved it here, the making of the tools and the processes are still specific to Taiwan. And some steps may be impossible to "bring home", either because some other country has all the raw materials, or all the expertise, or local laws prohibit some part of the process being done here.
For return to happen you need to have a creative economy, not an extractive economy.
Offshoring happened for the simple, dumb reason that it's cheaper and more profitable.
For all the rarara about "America", shareholder patriotism extends exactly as far as quarterly returns. If that means selling out ordinary US workers - do it. Give me the bag.
What offshoring revealed is that the US is not a culturally integrated country. The culture of the top 5% or so considers itself completely separate to the rest.
It's a political fault line that was always latent, was somewhat suppressed from the New Deal to Carter, and then came roaring back with Reagan.
Now it's operating at pathological, self-harming levels. The marrow of the country has been chewed out, and a few dysfunctional shell oligopolies, propped up by a bubble, are keeping the lie spinning.
There won't be any significant reshoring until there's a cultural change. Reshoring is just too expensive for the owner class to do more than tinker with it. Without a cultural change the owner class doesn't care enough to change that.
Offshoring happened because people dont want to buy goods that cost 3x as much just because they were made in the US. If a clothing company tries manufacturing domestically no one will buy their clothes unless theyre already an expensive brand.
Partially true, but it also happened because companies wanted to reduce cost and logistics are cheap. Sometimes this was a necessity to stay competitive. You either prohibit some trade with taxes or it is a race to the bottom to concentrate all production into countries with the lowest possible wages.
Ecological factors from logistics are missed technological development opportunity from not having local production are not factored in here as well.
I think if the wealth class wants to avoid communism and heads on pikes in the longer run, they should absolutely start to be more concerned with community and move beyond the tunnel blinders of the next quarter over long term stability.
This goes for govt doing anything but working to ensure domestic production and dual/multi sourcing of essential infrastructure.
Unfortunately that's a wall street problem. I don't think wall street can be fixed, at least I don't have any clue on how it's possible to fix it outside of destroying it.
As long as the ownership class can continue tricking half the population into directing their lust for violence towards scapegoats like illegal immigrants, there's very little reason for them to change course. The remaining half of the population then gets most of their energy used up defending against "culture war" bullshit, with many even going on the aggressive there because it's one of the few types of allowable wins in the very narrow Overton window.
Illegal immigration isn't just a scapegoat... it's a large impact on social welfare spending, infrastructure costs and housing availability. Especially when considering an increase of over 5% of the population in under 5 years without an accompanying growth in production and wealth generation in general relative to inflation.
There are limits on migration for a reason... that doesn't even consider the impacts on the larger society by weakening social cohesion.
Even then, there's plenty of indication of movement from those who want a Communist society... you only need to look at the NYC election, and the Venezuela protests to see that. Without a longer term consideration for society as part of where business/corporations operate, you will only see more drift in that direction.
Sure, it's not just a scapegoat. I'm actually pretty ambivalent about the immigration issue itself [0]. But it is still a scapegoat - the people who were violently angry about economic disenfranchisement (due to overfinancialization and massively monetary inflation) are currently all-in on cheering for the New York financial con artist for performatively going after those scapegoats while making the real problems worse, right? That right there is the pressure valve popping off, and even if the tribal buntings change and those people go back to seeing the system as their enemy in ten years, history shows they will just get hoodwinked again.
If this tiny movement towards "communism" amounts to anything of note in 20 years, I will be surprised. The pattern I've seen is that even if the current push is headed by idealistic leaders who don't give in to self-interested expedience (ie corruption), the next crop won't be. And the corporatist structure has been very good at neutralizing any real reforms, especially in the US.
[0] given equity with things like people who have been here for quite some time - those are undocumented Americans. For comparison, adverse possession, by which you can gain exclusive title to a piece of real estate by breaking the law usually only requires a few decades
You’re cherry-picking examples. Manufacturers can and do relocate the entire chain (or a super majority of it). I live outside of Greenville, SC also (previously Charleston) and when Boeing or BMW or Mercedes or Volvo bring a product out here they also bring hundreds of small time suppliers with them. Maybe the cotton for the cloth seats still come from Egypt but this is immaterial to the overall operation and the jobs it brings to a community.
They didn't have those steps outside the USA in 1960, yet people wore shirts. Those steps can come back.
For cars I found it interesting that my water pump on my Dodge Ram is stamped with Made in Italy. Yet the part is fairly small that even if Italy continues to make it, they can ship 50k water pumps in one shipping container to Detroit, and the truck can still be assembled here. That's not an issue. The issue is when the truck is made in Mexico entirely (which I think they still are). I know that's not "the entire supply chain" but it certainly becomes a center of gravity.
Last year many people were talking about dev shops changing their "center of gravity" from the US to other places like Poland. In other words, CEO here, EVERYTHING else is in Poland. Wherever that center of gravity is, that's the country that will benefit the most. They may even hire a remote worker in the US that is up all night - but it will be the exception, not the rule to hire US people.
Clothes are much cheaper than they were in 1960. You could bring the garment industry back to the US but you wouldnt be able to sell your products because they wouldnt be price competitive with sweatshop products.
>> Manufacturing jobs bring the entire supply chain of the manufacturer with them. > Not really... Manufacturing today is a global process and the entire supply chain is usually spread around the world.
You're both right but you appear to differ on particularities, like if it's good to bring all manufacturing onshore.
I'd rather address Jensen's could-be-apology which pretty much mimics Grok's "Oops, I made some pedo images, sorry... but move on, nothing to see here."
Yes, Nvidia, Apple and AMD are the companies that drove the US chip manufacturing overseas. The problem is, thanks to that, they are now forcing us to pay for their enormous margins and for bringing chip production back here, all the while they swim in money.
On top of that, we are now supposed to appreciate their newly acquired wisdom and be thankful when they lecture us about what's good for America.
I'm not sure what you're arguing against, isn't that the point of the GP? That we can bring all that stuff back? Tesla makes things predominantly in-house and didn't use a supply chain all over the world. There are still garments grown and made entirely in the US, eg Duckworth. They're just expensive because there's not a lot of it left.
For manufacturing in the US to be economically competitive on the global stage (or even on the domestic stage), the actual work will mostly be performed by robots, not by humans. This will bring back profits, but not a lot of jobs.
In the specific case of these chips, the offshoring was to Taiwan, a democracy, and one of our geopolitically closest allies. This business went to TSMC because they did a better job producing these chips than either Intel or AMD (or AMD's successor, Global Foundries). The Twinscan machines that fab the chips are from ASML in the Netherlands, another democracy and geopolitical ally. The parts for those machines come from a truly global supply chain. Modern chip manufacturing is an absolute marvel of global integration.
American consumers and businesses benefited from this arrangement in the form of very competitively priced hardware. Most of the manufacturing was in Asia, but most of the profits were to American companies. This is why America is today the richest country on Earth. It simply would not have happened like it did without free trade.
China's low wages and integrated supply chain can beat American manufacturing. China cannot beat the combined talent of the free world. Along with immigration, from the likes of Taiwanese-American Jensen Huang, free trade and an open economy was what once made America great.
> In the specific case of these chips, the offshoring was to Taiwan
In the context of Jensen's would-be-apology, it doesn't matter where the offshoring went. Nvidia, Apple and AMD drove the US chip manufacturing overseas, and thanks to that, they are now a virtual cartel which commands enormous margins, so they can "mercifully" argue about bringing chip production back here... at our expense of course.
While paying through the nose, we're also supposed to appreciate their crocodile tears and listen to their drivel about what's good for America.
Yep. I live here, too, and it's a great place. My primary concern is that we're pretty reliant on just those two companies. If they decide to leave or make major changes, the impact on me (even though I work remotely as a software engineer) would be huge. I hope we manage to diversify.
To answer the GP, you'll have to take a look at why the entire industry offshored at the same time.
What makes you think the problem that caused the industry to go won't also cause it to fail if somebody forces them to stay or tries to bring them back? Also, why one industry leaving made people there destitute?
Those things are always more complicated than they seem.
Yep, it's definitely complicated from an economic standpoint.
There was a strong dollar making imports cheaper and exports more expensive. At the same time there were reductions in tariffs (Tokyo Round of GATT) as well as increased quota allowances from other countries, particularly China, than were previously allowed (the Multi-Fiber Arrangement).
At the time, this particular area of the country had turned into a global textile hub and it was devastated as a byproduct (over-saturation of a single industry). Now if you come to the area, you will see all of the old mills converted into apartment complexes, coworking spaces, wedding venues, etc just to preserve the architecture.
The whole area is beautiful now and has been one of the fastest growing parts of the country for almost a decade. I moved here 25 years ago when the changes were just starting but the natives will tell you the whole story. I think a PBS documentary was being made about it too.
We should still differentiate between low value and high value add manufacturing though. Building automobiles and automobile parts, great. Relatively high skill, high value add jobs. Spinning cotton, not so much.
If we have an infinite supply of labor with no better place to allocate them then sure, any additional job is good. But that's not the case. We have a constrained labor supply, so is it better overall to focus on high value, high pay jobs, even in manufacturing instead of aiming for the entire supply chain for everything?
So European companies brought new jobs and prosperity to Greenville, SC, and the local Americans thanked Europe by voting 60% for Trump in the last election.
How do you explain that? Why do the locals vote against the countries that provide them the jobs? Are you also pro-Trump because you live in that town?
To be fair -- there are a lot of people in the southern US who do the same thing to various demographics that HN users are likely to belong to. You can actually see serving politicians do that on TV, and have been able to see that for a long time. Not everyone does it, but not everyone on HN does it either. Indiscriminately doing the same thing back isn't good, but that kind of ugly seems to just be human nature.
I'm a liberal and I've lived in Texas (Austin) for 20 years. It is infuriating when I am on some liberal-oriented forum, someone says we should force Texas out of the union or whatever, and everyone cheers. ~40% of Texans didn't vote for Trump, and in absolute numbers are a greater number of liberals than most other states in their entirety ... yet my supposed fellows want to write us off. Ugly indeed.
Am I saying they should be disenfranchised from the country? Have I said they I have no empathy for their concerns and hope the worst for them? No.
What I said was it was infuriating when they are doing those things to the ~40% of Texans who are liberal. I didn't say it happens on all liberal forums, I'm complaining about the cases where it does happen. And please don't shift things because I said "everyone cheers" because it should be obvious it is a common phrase and doesn't literally mean I checked and every person on the forum commented.
Would you even call HN a liberal forum? It is full to the brim with profiteers who have no ethical framework except making money for US-based VCs.
The past years have shown that many have no problem to change affiliation with the zeitgeist. I feel many Americans are secretly pro-Trump as long as they make money. If there would be more liberals in US tech we would see much more leaks coming from companies such as Apple, Facebook, Reddit, Google, about how the senior leadership is supporting the government policies.
For example with Facebook it needed a woman to get sexually harrassed out of her job and write a book called "careless people" so that it is reported that Facebook engineers were actively embedded with the Trump campaign while at the same time democrat voters (black people) were shown literal fake news ads to keep them away from voting.
I have not seen one Facebook senior engineer being ostracized on HN for working on the trump campaign. Everbody made their millions and joined the next big thing, with us worshipping their amazing FAANG credentials.
If the people who worked on DOGE do a "SHOW HN:" nobody would call it out.
I just look at the patterns of things that are downvoted to death. Comments that would come out of Peter Thiel or Elon Musk's mouth any day of the week are regularly downvoted to hell here.
It's not a matter of 'liberal' vs whatever anymore, it's a matter of expertise and basic ethics versus corruption riding upon anti-intellectualism, cloaked in naked bigotry. Say what you will about the prevailing value system among HN commenters, this place isn't that bad.
My observation over the last 10-15 years here has been this is partially true. But what's more true is the Overton window has shifted. To use your example, the things that would come out of their mouths, especially Elon, has taken a decidedly right wing turn over time. So keep in mind you're also seeing people who have largely stayed the same discussing a culture that largely has not.
Stop playing the victim. When you have time to hang out on HN you're obviously part of the privileged class. The area is hugely profiting from "stolen" EU jobs, which according to Trumpistan logic is something that is not good. I don't see any uprising of all the "folks in the Southern US" against the lawlessness of your government. And if you're called out for it the victim reflex sets in.
The subsides were during Clinton and Bush 2. BMW and Mercedes were here long before Biden and Obama. It makes good sense to manufacture your product in the area it is sold - that's the real reason for their mfg base establishment.
Not only the direct jobs, but also the other support ones - automation, suppliers, maintenance, facilities work, etc.
Absolutely, especially with larger/heavier items like cars... I'm frankly somewhat surprised there aren't more assembly plants across the US just to reduce the shipping costs of the final product. Even with a more globalized supply chain of the component parts.
I'm talking of the Biden-era IRA here. BMW had to invest 1.7 billions in 2022 to manufacture most of its EV directly from there as you can compete in the US market without the IRA subsidies and the conditions severely limit even which parts you can import.
That's a significant shift moving from final assembly to forcing most of the supply chain to be relocated.
What countries, beyond the US, are you speaking to? I mean, I'm interested in what countries you're talking about that don't leverage tariffs and other restrictions to favor domestic industries in those countries.
There is EU / Schengen which immensely boosted local economies. We had TTIP but unfortunately it was killed by opposing forces, and there is still MERCOSUR. However, Germany with it's brilliantly corrupt leadership, changed that strategy to "trade facilitates change" ("wandel durch handel") and went all in to removing trade barriers w/ russia and china because the idea was to convince them if we trade they won't try to kill us. Obviously this approach failed.
Strategically, it does not make sense for democratic countries to have higher trade barriers with each other than with autocrat states. But over time the hybrid warfare by autocrat states leveraged social media to convice people to vote against their own interest e.g. brexit.
Tax revenue. The nation is tens of trillions in debt with a multi-trillion per year deficit. Tariffs are proportional to spending, and encourage domestic production and security.
There have been several favorable trade deals as well as several announcements for new production facilities in the US... this may cost more than imports, but there's something to be said for domestic security in terms of access, especially in the likes of a global pandemic or war.
I'm not suggesting it's a perfect solution, or situation, only in that it isn't exactly an idea completely without merit and just blindly applied at random.
You're description matches a well planned and communicated slow increase of tariffs targeting specific products or industries so companies have time to adjust (newsflash, US was already doing this). Trump used blanket tariffs as a hammer to extort other countries, but its not like we want to buy your shitty cars anyway. Most of these facilities already existed or were planned. hint: most foreign brands were building their cars in US already.
If the economy is doing so well because of these tariffs why are they hiding numbers?
Its not even the first time US tried tariffs like these, it didn't go well then but Trump talks about like it was a golden age.
I said "extended" not "opened". That's indeed intentional. Please don't use a strawman to avoid addressing the point I'm actually making.
Michelin invested significantly in the site recently and BMW added a ton of EV manufacturing capacities, we are talking of a 1.7 billions dollars investment.
All of this is linked to subsidies they got through the IRA on top of local South Carolina subsidies. They had to do these investments to remain competitive in the US market as the subsidies are tied to local manufacturing and the conditions significantly limit what parts they can import. It was a direct attack on European manufacturing masquerading as green investments.
Downvoted for a factual comment, I see the usual denial on the basis of party lines is still as strong as ever in the US. Here is a bunch of sources for the few who might be interested:
A line cook makes no more burgers per hour, a hairdresser delivers no more or better haircuts, and a daycare worker watches no more children concurrently than they could have 25 years ago. Meanwhile the Magnificent 7 have emerged. Baumol effects might have raised wages a bit, sure. How could the relative positions of these workers not fall as all these tech-enabled and scale-enabled neighbors come on to the scene?
The whole concept of buying services from people is either that their time is worth less than yours, or they have special skills that you need and lack. “No such thing as unskilled labor,” ok, but you are definitely get sorting on how useful people’s skills are and how difficult they are to substitute or replicate.
> How could the relative positions of these workers not fall as all these tech-enabled and scale-enabled neighbors come on to the scene?
I’d like to see this worked out for real.
On the one hand, sure, a hairdresser cuts the same amount of hair as they did 25 years ago, and a fancy tech worker produces enormously more output than 25 or 50 years ago.
On the other hand, why does it follow that that tech worker should have an amount of take-home pay equal to vastly more haircuts per month than a comparable worker 25 or 50 years ago? A modern programmer does not actually need more haircuts, or more food, or more lattes, or more housing, or more doctor visits than a comparable worker any other time in the last 50 years.
So maybe something is actually wrong with the profitability of modern non-labor-intensive companies and the tax system such that their owners and employees are wildly overpaid compared to lower-productivity workers.
I’m thinking more of paying people on the margin or of some kind on tax system that compensates for inequality a bit.
Not fully worked out, but consider: suppose there are 100 people in the population, and a bunch of them are ambivalent between tech work and jobs like hairdressing. If tech work paid 10% more than hairdressing, some would do tech work and some would cut hair. If tech work paid 200%, then maybe there would be too many applicants and the employers would reduce wages. (I’ve occasionally contemplated that perhaps one reason that the big Silicon Valley employers pay so much is kind of anticompetitive: they can afford it, so they might as well, because it makes it more expensive to compete with them.)
Or alternatively, imagine if taxes were structured so that owning more than one house were highly discouraged (with appropriate provisions to make owning properties to rent them out make sense, which is something that a lot of legislators get wrong), and if permitting to build houses were not absurdly restrictive, then many different jobs with very different salaries would could still result in having enough income to afford to live in approximately one house. Some might afford two (!), and some might afford one that is much fancier than someone else’s, but if the pressure that makes someone like a hairdresser need to compete against a highly paid tech worker to pay for a similar house went away, the situation could be much improved.
(California, like many places, has strictly too few residential units in the places that people want to live, so just adjusting prices won’t help much.)
> The whole concept of buying services from people is either that their time is worth less than yours
And if everyone else's time has become more valuable then too has the time that is being saved by buying services.
If my time as a programmer is worth significantly more now than it was 25 years ago, then the time I save by buying services is worth more.
There's a reason that someone making $1mil/year is going to be willing to pay more for the exact same haircut that someone making $70k/year also gets. The time being saved is worth more to them.
You're only looking at half of the equation here. Following your logic, if my time is worth $100/hr, I should be willing to pay $99/hr for a haircut. But reality is that a haircut isn't just worth some utility value based on time saved, it's worth the lowest amount where suppliers' willingness to provide it at a given quality and buyers' willingness to pay meet.
So while the $99/hr haircut might technically save me money/time, suppliers of haircuts are generally willing to give the same haircut for $30/hr. If one supplier tried to pin their prices to the growth of their customers' income, they would go out of business. That is because the value of the suppliers time isn't increasing at the same rate.
I'm mostly bald... I got tired of paying as much as I did for haircuts and now mostly just use a pair of clippers on myself, since my goal is to take off all of it. I've paid for more beard trims the past few years than haircuts, though I mostly do that myself too.
Note, I usually use clippers on myself about once a week. Sometimes I'll use a shaver to get a closer shave, but generally doesn't matter as I don't care if there's a little growth, which is noticeable unless I literally shave daily anyway... which I'm too lazy to do, and definitely not able to pay someone else to do.
> Baumol effects might have raised wages a bit, sure. How could the relative positions of these workers not fall as all these tech-enabled and scale-enabled neighbors come on to the scene?
Supply and demand? If the population of hairdressers was small, so they could charge more and more, then their wages could keep up as a percentage. And that would be possible if for example so many people moved into high productivity work that only a small percentage remained in low automation work. But if you have a constant influx of new hairdressers or a constant influx of people willing to do low automation work, that doesn’t happen.
But the relative value of those same labor (hairdresser, daycare worker) changes. If my labor as a tech worker was $50 / hour I'm willing to pay $30 / hour for a haircut. But now if I make $100 / hour I'm willing to pay $60 for the same haircut. And in both situations I still need a haircut and the hairdresser is still the place to go to get one.
Which is fine right? If both wages just keeps up with inflation, the gap will increase by the same amount as well. In fact in this particular case I wouldn't even expect the hairdresser's wage to increase the same amount proportionally, which is also fine. Not all wages should increase at the same rate.
The line cook is relatively as valuable as they were in the past, they're just being out leveraged by people asserting a self-centered entitlement mentality.
Manufacturing in particular... it's very easy for folks to say we should bring those jobs back to the US but people are often shocked when confronted with the prices of items manufactured in the US. I don't say that to dismiss the thought but it would be a lot more difficult for folks to swallow than they think it would be.
Theoretically wages should rise due to the increased demand in labor.
In practice, not sure. But it's not like the prices dropped drastically when mfg. was outsourced, the companies pocketed a most of the savings as profit.
Prices absolutely _did_ drop dramatically for many, many things that are manufactured overseas. Goods from from clothes to electronics are vastly cheaper.
For clothing, for the most part is an Indian woman that is moving the cloth on a sewing machine still. We have not LLM'd making clothes yet. Nike and a few other companies are working on 3d printing shoes, but it's not comparable to hand made yet.
For the most part, the price of a shirt made in India vs USA is the cost of labor. The Indian woman will work for $3 per hour which is a decent wage for that area (don't fact check me, it's just a guess here). She can probably make 5 shirts an hour.
A woman in the United States will make $16 per hour and still make just 5 shirts (or less - more rules in the US about breaks, and probably streaming Netflix too)
Now the company that sells the shirt at Walmart for $10 will have a profit margin of probably $5 per shirt from the Indian labor, and $1 from the US labor.
Technically after the industry is built out more we may be able to squeeze more shirts per hour if we start doing technical innovations (for example we make a machine that pre-sews 5 of the seams because of innovation. This is something that won't happen if the center of gravity is in India, but may happen in the US. (Actually today that may happen in India as tech is taking on its own thing there now).
If we cut costs and automate the way China has automated - some factories run without any lighting at all because it's all robots running in the dark - then there aren't going to be a lot of jobs created by on-shoring. And the only way to create a product on-shore that approaches the pricing of the Chinese equivalent is to heavily automate.
"Lights out" has been the big automation meme since before China joined the WTO. Everyone has gotten better over time but it's still "high school sex bragging rules": a few people are doing it but not nearly as many as brag about doing it.
Clothes are nowhere near as heavily automatable as people like to believe they are, is the problem. Unlike many other goods, nearly every article of clothing produced today is still produced with human hands. This does not mesh well with the fact that the modern public has been trained not to value apparel; people expect to casually buy items of clothing for less than they'd spend on a single meal.
It's not like the cost of clothes would be that much more if produced domestically though... the difference is the margins would be lower, a domestic employee would have a job and the domestic economy as a whole would be stronger as a result. Not to mention, the lower margin also means the wealth gap would be more narrow and there would be less incentive to stoke the flames of class warfare.
Why do people assume that clothes (and other goods, mind you) produced in the US are a mere hypothetical? There are plenty of brands that do so, and your general public overwhelmingly ignores them (and, as you have just demonstrated, don't even know they exist) precisely because they are way more expensive than consumers have been conditioned to believe that clothes should cost.
For instance, actual MiUSA jeans from companies like 3sixteen and Raleigh Denim retail for ~$200+, which is a far cry from the $30 to $50 that most people think jeans "should cost" (and that companies like American Eagle, who have long since outsourced their manufacturing, are happy to provide). Sure, it's not as if MiUSA jeans HAVE to be a few hundred dollars (I believe there are some Gustin's jeans you can pick up for $120 or so), and there are offshored jeans like Levi's which are already overpriced. But you'd have to be very naive to think that there would not be a massive and quite frankly unbearable sticker shock for the vast majority of people if you were to somehow force all domestic clothing demand to be met through domestic production. You could maybe sell it with some very effective austerity propaganda, but good luck with that.
Where did I say there are no clothes produced in the US? That said, I do think there's room to compete of most US clothes were produced domestically and that the pricing could come well below the existing US brands.
There's also brands made in China for cheap with Euro brand labels attached that sell for several hundred. Cost is not the same as price.
I've worked a wide array of blue collar jobs and manufacturing I always found some of the worst, even worse than stuff like general labor building houses or working on fishing trawlers in the Bering sea because at least that stuff wasn't nearly as rote.
You stand at a machine doing the same fucking thing over and over. Do one thing wrong, your finger gets chopped up -- you think that sounds easy but wait until you're up all night taking care of a screaming infant and then have to come in so your family doesn't starve, then you make a simple mistake and now part of your body is gone. Often a overnight shift. I would find myself waking up at 2,3 am moving my arms but completely unconscious. Sometimes I would catch myself before I stick my hand into something that would break it apart. One place I was working, about half the people were missing fingers.
I don't know why on earth you would want to bring back people getting burned alive in steel mills or their fingers chopped up when a stamping machine has all its safeties break because maintenance didn't maintain them right. Why we would trade away our comparative advantage in things like designing widgets and instead do the awful work making them is beyond me unless you are so desperate it's your only option.
> Why we would trade away our comparative advantage in things like designing widgets
As China has shown over the past 20 years, that advantage erodes quickly if you stop making widgets altogether. It's very easy for widget makers to move up the value chain into widget design. And once they do, you're cooked, there's nowhere to hide.
Not to mention, widget design can't absorb as much labor supply as widget production. And many people can't do widget design, still need a living, and would be perfectly competent widget makers. So...you gotta solve for that if you focus only on widget design.
Out of all the many industries out there, I don't understand why we keep glorifying and romanticizing manufacturing and trying to "bring it back." I've also worked a few of these jobs and you're right: THEY SUCK. Depending on what you are manufacturing, it can be boring, stressful, stinky, physically taxing, or dangerous. And most of them, even the highly skilled ones, don't pay well. For the sake of our own society, we should be getting rid of these jobs, not adding them.
Because there are 300M people in the US and not all of them can have your cushy SSE role. See all the homeless people - it's because we're selling them out.
Maybe not literally all but certainly most. We hardly have any farmers or factory workers compared to what we had at one point. They've mostly moved onto cushy office jobs.
Most is 12%? This is the problem with HN. You're all so bubbled it's ridiculous to think sometimes a HN'er will say something like "If I were President."
that's a very incomplete view though. How many of those would take up the newly created manufacturing jobs? How many of those can be trained to do other, better jobs? There are reason to bring some manufacturing jobs back for national security interests etc, but from a labor and economics perspective, it seems a better investment is first to try to invest in people such that more of the current labor pool can be engaged in "better" jobs first.
> For the sake of our own society, we should be getting rid of these jobs, not adding them.
So let me get this strait. You think these dangerous, monotonous jobs are bad for "our own society" so the best thing for "our own society" is to export these dangerous jobs to another society "own own society" doesn't give a shit about. Wonderful.
I can't believe how ignorant and callous people can openly be.
You can't seriously believe those other societies are taking manufacturing jobs because they are worse than what they already have. People in the 3rd world are less fortunate; they're not dumb -- they want the same as us: better lives for themselves and their family. If they're working in a factory and not the alternatives it's because they passed something else along the way that was an even shittier option than that.
Short of going back to a society of married families with a single income, there isn't really a solution to keeping everyone working and making an income though. Without jobs, we revert from a modern society to a third world nation.
There are some people who like the rote work. You and I may not but some of the people I talk to like that they can basically "turn their thinking off" and get paid.
>Do one thing wrong, your finger gets chopped up
This should not be possible in the US. OSHA is still in existence(you could argue that the future state is unknown)
https://www.osha.gov/laws-regs/regulations/standardnumber/19...
>1910.212(a)(1)
>Types of guarding. One or more methods of machine guarding shall be provided to protect the operator and other employees in the machine area from hazards such as those created by point of operation, ingoing nip points, rotating parts, flying chips and sparks. Examples of guarding methods are - barrier guards, two-hand tripping devices, electronic safety devices, etc.
> a stamping machine has all its safeties break because maintenance didn't maintain them right.
When the safety on a machine fails, the machine should stop. If it does not, then the safety was not installed correctly.
Or more likely, the safety measures were bypassed because they were a PITA. You can put all of safety measures you want on equipment, but humans have this insane mindset of faster = better. Yes, that includes top to bottom of companies.
Where was this? Because that's not true in the US, land of the personal injury attorney. My brother used to be a machine salesperson. He got a call from a law firm couple years after his company sold a machine asking about a particular one that was sold (not even by him) because their client lost a body part. Those payouts often end up in the millions.
It looks like a company was using uninformed and "scared" employee population to commit labor violations. Also using the same tactic that I alluded to in one of my other comments: Production workers are hired from a staffing agency and dispatched to the job site, that way the company HR doesn't know(and can't legally ask about work eligibility).
It looks like that plant in particular has serious issues. Someone else died after the 16 year old, bringing the number of deaths in recent years to 3.
This one in particular seems to know what it is doing: Googling "Mar-Jac Poultry" does not bring up any of the issues, nor are they listed in the Wiki page.
I've worked some in metal fabrication and supported some light industry. if you think anyone in a normal business in the US that hires less than 50 hourly people has even read the OSHA regs, you're completely unconnected with the reality
we really do call those stamping machines 'finger eaters'
I work in manufacturing and stamping machines scare the shit out of me, usually because of the forces involved but I did work on some that were not guarded. That was not in the US however.
My first job with a stamping machine was in a company with about 30 production workers. This was early 2000s in the southern US, all the workers were from Latin America and I think that most of them were not here legally(I say this because the company used temp agencies to employ the workers and at one point later they wanted to bring one of them on in a management role so they had me(also a temp) ask if the person wanted too switch the the higher paying but also requiring them to submit legal documents role).
Even under those circumstances, I never saw the company do something that skirted OSHA regs. Their stamping machine was a POS that was annoying as hell to use, mostly because the light curtain and other safetys kept tripping but it was never bypassed.
Because in a lot of people's minds having ~1/1000 of your coworkers killed for every decade you work at the factory still sucks less than taking orders from some algorithm crafted in a downtown office by someone who wants to exploit you at best and hates you and your way of life at worst.
In the factory you get both. With essentially zero chance to change the algorithm. When my father worked in the factory he found a way to manufacture the product faster and cheaper and just as safely, and rearranged the factory to do so. He was punished by management for altering the algorithm and also ostracized by fellow workers because they perceived it as reducing the demand for jobs.
Yup, that does sure sound like a silent-generation or boomer era story.
I'm sure pockets of that stuff are left but pretty much all of "those sorts" of "we don't pay you to think" workplaces either transitioned or went tits up over the course of the 1980s and 1990s as the Japanese management made its way to the US (though one could argue it's come back over the past 10-15yr).
Now, of course if you are doing something that's as unskilled as unskilled gets or in a particularly perverse workplace you'll encounter those conditions, but they are absolutely not the norm. The business schools these days teach various flavors of "it's cheaper to run a workplace people feel doesn't suck".
This stuff goes through phases to some extent. The 1920s and 30s were adversarial. The 1940s-60s were more cooperative. The 1960s-80s were not great. 90s and 00s were quite collaborative. Now we've kind of got another wave of "management knows best" and adversarial thinking that's waning.
That's the American dream story- always starts with dad getting yelled at for making things better and faster - the next sentence in the founding documents: So he went his own way and now we have NicoCloth Inc. which in the years since has become a global corporation.
Pretty sure they regulated that out of existence in the past several decades. Now best you can hope for is to be bought out by the competitor of the company you left sometime before the 50 employee mark.
(only partly joking, and that part is way smaller than I want it to be)
> You stand at a machine doing the same fucking thing over and over.
Grew up in a machine shop ran by my father and my grandfather ran a one-man tool and die shop and ran the OBI presses himself. I ran the press, milling machines, lathes and saws. No one in that shop was missing body parts. Sure, its monotonous at times but that can be said about many jobs. A well ran shop should not put you in harms way.
> I don't know why on earth you would want to bring back people getting burned alive in steel mills or their fingers chopped up when a stamping machine has all its safeties break because maintenance didn't maintain them right.
I don't know why on earth you seem to be content with other people being subject to the same conditions.
> You stand at a machine doing the same fucking thing over and over.
Grew up in a machine shop ran by my father and my grandfather ran a one-man tool and die shop and ran the OBI presses himself. No one in that shop lost a finger.
> I don't know why on earth you would want to bring back people getting burned alive in steel mills or their fingers chopped up when a stamping machine has all its safeties break because maintenance didn't maintain them right.
I don't know why on earth you seem to be content with people outside of your country So the laborers in other countries where safety is ignored aren't people?
> I don't know why on earth you would want to bring back people getting burned alive in steel mills
We don't want to bring back their 3rd world safety standards. We just want to bring the jobs. Factory work can be less rote if teams rotate or their employer provides enough rest. Unions are a potential solution to this issue.
This is part of the Labor vs Capital stuff I mentioned in my post. We're not likely to have strong unions again in the near future, so any jobs we bring are likely going to be dangerous in addition to carrying low pay.
OTOH if we posit strong Labor, the good news is we have a lot of jobs now that we can turn into Good Jobs. We could, for example, make it so that any large employer pay their employees enough such that nobody who works for them full time (including contractors) is eligible for income-based government assistance at the state or federal level. We could choose to expand those rules to any organization over a certain size. There's a lot we can do to turn Bad Jobs into Better Jobs without boiling the ocean and moving industry supply chains.
Doing rote work is better than no work and living off the government.
People in those rote jobs enjoy the camaraderie, the beers after work and putting their kids through school. Something an unemployed person has more difficulty doing.
Even the great USSR had huge amounts of rote work. People found a way to live life.
Sure, let's adopt the Soviet model of "we pretend to work, and they pretend to pay" because what could go wrong there!
You're basically asking every consumer to pay more for goods so someone can feel better about themselves personally (at the cost of someone who they don't share a country with). I'm not sure if you've met many people, but it's not a very compelling argument, nor a morally superior one due to the global impact.
It’s going to cost the consumer one way or another. Either taxes, (cities still need to take in taxes, so if they lose taxpayers, their option is to levy more taxes), quality of life (more homeless, less municipal money for maintenance due to social costs, etc.)
I’d prefer things to cost more than to have cheap crap but at the cost of social/employment issues. I don’t need new fashion every year. I don’t need new appliances every few years. I can do with less consumerism in exchange for my neighbor being able to have a job, boring as it may be. At least he’s not calculating the cost of suicide and wondering if he’ll be around for the kids 18th birthday.
> It’s going to cost the consumer one way or another. Either taxes, (cities still need to take in taxes, so if they lose taxpayers, their option is to levy more taxes), quality of life (more homeless, less municipal money for maintenance due to social costs, etc.)
It's actually not, because people aren't required to live near people who consume more in social services than they contribute in taxes. Areas like you describe exist, but basically contain the people who are unable or unwilling to leave an economically depressed area. Most people just leave.
> I’d prefer things to cost more than to have cheap crap but at the cost of social/employment issues. I don’t need new fashion every year. I don’t need new appliances every few years. I can do with less consumerism in exchange for my neighbor being able to have a job, boring as it may be. At least he’s not calculating the cost of suicide and wondering if he’ll be around for the kids 18th birthday.
I don't disagree entirely, but most people do based on behavior.
It's not a simple problem at all, including what is fair to consumers and the businesses themselves which have to compete with other companies that don't have artificially inflated expenses.
Pretending to not understand how game theory works is a choice -- more of a choice than customers have.
Companies are also constrained to do labor arbitrage once the rules allow it, but they were the ones who lobbied the rules into place and they were the ones to profit from the rules, so they have far more culpability here.
It would be a virtuous cycle, though, right? If we had the right incentives for keeping manufacturing here, then sure, prices would be somewhat higher [0], but so would income for the very people who would be buying.
[0] But how much higher, really? On a mass production line, what is the actual contribution of wages to the cost to produce?
Assuming the local versus offshore good is a perfect substitute, that means that the value has not changed.
Paying more for the local good means your money is worth less, as it buys less value.
Your question on the production line doesn't account for all of the precursors also being local, plus the local energy rates, local taxes, local rents, and so on. Everything tends to be more expensive, otherwise the cost of managing offshore production wouldn't be worth the effort.
Total isolation only works when there's still room to grow by way of some underutilized resource- cheap labor, land, or something extractable from the environment like wood or minerals.
From purely a price perspective, sure. But there are other advantages to maintaining production capacity within our own country.
Plus, doesn't offshoring effectively push the whole world towards a common cost-of-living/income ratio? Great if you're labor in a struggling country, bad if you are labor in the richest country in the world.
That's why I do blame corporations for outsourcing. The companies outsource every time they select for more profit for their owners and not for sharing among the workers.
And if corporate officers don't select for more profit then their stock goes down, shareholders become unhappy, officers could lose their jobs and the corporation could even fail b/c they have competitors and their competitors will likely select for more profit.
I'm not aware of that many times where I've had a choice. I could get a nice, expensive dress shirt made in the US but for general clothing it's extremely difficult to buy domestic.
Frankly, a lot of the corporations are still to blame because they're the ones actively concentrating wealth at the top. If I had more disposable income I'd buy more made in the US products but my budget simply doesn't allow it.
But you wouldn't. You, and everybody else, would see several shirts that looked basically the same and not pick the expensive one without giving it any more thought. If you think I'm wrong, go start a company that makes shirts in the US. You will make a fortune because demand is completely unmet.
Even expensive brands are usually made overseas. I looked at a couple of random pieces of expensive Patagonia outerwear in my closet. One was made in Vietnam. The other in Bangladesh.
Sure, you can get custom/semi-custom dress clothing made in the US. Probably other things (at an eye-watering premium). Which may be OK if you buy very little clothing. But mostly forget about going into a store and picking things off the rack.
IIRC the last company that manufactured men's dress shirts in the US closed not too long ago. They really were dedicated to making stuff here. The economics just simply did not support it. Which is another way of saying people would not pay the necessary price premium.
Right, because there is virtually no difference in quality so companies go with the lower labor costs (as does basically everyone else on earth who is looking to have a task completed).
The expertise to do that isn't here anymore on a scale to satisfy the majority of the market.
However that is likely exactly what happened when it was finally pretty much killed of in the 90s. At some point clothes were made largely domestically. Some manufacturers started offshoring while others didn't. At that point consumers had a choice, the choice they made was to drive the onshore industries out of business or offshore.
There might be some argument people have more surplus wealth now though, and they'd rather en masse buy those domestic products than healthcare, healthy food for their children, education, housing, and the other stuff that absorbs all the income we can muster. Of course I think there is always a market for people with money for luxury goods, some of them buy USA because it is USA.
This is true, but let's not pretend that "healthcare, healthy food for their children, education, housing" is what's absorbing all the money. Average car payment is around 700 bucks a month now.
~75% of cars are bought used and according to Experian only 33.5% of those are financed. When adding 80% new cars financed you're already under 50%. Then consider already paid off vehicles.
I recently came to a tangential realization (obviously I'm not the first to notice) regarding "cheap Chinese knockoffs":
The US company outsources the manufacturing to China because "they have to" (I don't necessarily agree with that), Chinese company keeps the assembly line running a few extra hours and resells the units back in the US under a slightly different name.
This equation is so comical to me:
The greed-driven US company screams that it's "fake", yet they didn't do anything illegal by outsourcing, just put Americans out of jobs. But if they don't build in China, a competitor will.
The Chinese company is driven by the same "profit over everything" motive and doesn't infringe on the US companys trade mark, but competes with the US company with essentially an identical product minus the R&D costs.
US company cries foul, "they're stealing our trade secrets!" Creates FUD about China but has no legal standing to do anything about it. Reeks of the same "immoral but completely legal" argument the former/would-be employees make
That's what tariffs are for. These are macroeconomic decisions, not decisions that should flow down to individuals, to be thought of as their responsibility and their moral failing.
Individuals shouldn't be expected to choose to buy American. It's a cost with an at best extremely distant (in time and space) benefit for an individual, and a non-existent benefit unless everyone does it. Instead, when goods are produced by foreign slavers and polluters, they should either be barred from import (if they're morally impossible to support) or taxed arbitrarily in order to optimize the local market, for which discriminatory taxes are not a factor.
But all if this is bad faith reasoning in general. What is produced is shit clothing, with shit treatment of the workers producing it, and intentionally outmoded by planned fashion cycles. If it were quality clothing being imported, labor costs would be a much smaller part of the costs, and therefore of the potential lost margins if owners failed to maximize the exploitation of labor. Tariffs wouldn't even effect quality imported clothing. What they would do is kill the shit imported clothing market, and allow us to redevelop a shit domestic clothing market if the minimum wage were low (i.e. sweatshops), or if we raise the local minimum wage, force a quality local clothing market.
> I'm wrong, go start a company that makes shirts in the US. You will make a fortune because demand is completely unmet.
The belief that macroeconomic problems should be solved by spontaneous generation is a form of religious capitalism. The fact that it doesn't ever happen is pointed to as the evidence that we are always at an eternal maxima. It's a practiced, self-serving denial that our economy is always actively managed by a very few people.
You seem to think I'm trying to make some moral point but nothing I said has the slightest thing to do with morality. It is simple fact of incentives and human behavior.
It isn't. I'm saying that people select for cost because corporations are actively engaged in pooling resources for the rich. If they didn't people wouldn't need to select for cost as much as they do.
>I'm saying that people select for cost because corporations are actively engaged in pooling resources for the rich.
People select for cost when resources are finite. This is going to be the case until we reach a post-scarcity economy, rich people or not. It's not like under communism everyone was driving around in lambos on gold paved streets.
When do you intentionally overpay for goods or services?
Are you haggling with your mechanic, landlord/mortgage lender, or grocery store to pay them more money than they're asking for, or do you purposely seek out suppliers that do not provide the offering with the best value?
Clothing is one of the hardest things to automate production of. We have had the "women at a sewing machine" since about 1850. Bring that 1850 women to 2026 with the latest computerized sewing machine and she would be equally productive as she was back then in an hour, and even after working that machine for a decade would not be much faster than she was. We can do a few fancy stitches today that she would have had to do by hand with the machine - but mostly we do them less know even though the machines are faster.
Nonsense, it's just cheaper to pay someone without any rights 50c/h then to automate it
If that industry was still in the area, they'd be automating the shit outta it. It's just not worth it right now considering there are always literal wage slaves in some place they can ship in for their sweatshops
Also, even locally produced premium clothing uses materials sourced from literal slave labour. There is no consumer decision anywhere, because the immorally sourced materials are just too cheap... And if you're willing to pay a premium for your morals, someone in the middle will just take it and fulfill the order with the cheap stuff.
They have been trying. Clothing is hard to automate. It needs to stretch and flex which is a problem for machines. We need many different sizes which makes things harder
The first is that much of it is optional. Stuff like fast food. People can do without it much easier than doing without a washing machine.
The second is, for many services, such as child care and elderly care, most adults are terrible at assessing quality. This creates a race to the bottom much like you see in manufacturing, making the jobs low wage. Because humans are humans you can't really point to a specific consequence of this either.
Market forces are what cause different jobs to pay different amounts. Welders don't get paid high wages out of charity or respect, they get it because welders with sufficient skills are rare, so if you don't pay up you won't get your welding done.
If service jobs can be differentiated (e.g. by training and licensing) then scarcity can be created.
For best results buy a political or ten and then enjoy the profit of having government violence chase away much of the "maybe not just as good but good enough for a lot of the demand that's out there" competition that doesn't have your training or license or belong to your professional group or whatever.
And the best part is the public pays for the privilege of having supply be constrained because the state forces that constrain it are not paid by those who benefit but by the taxpayer.
Manufacturing jobs were only "good jobs" in comparison to the alternatives available at the time. The other options in the US have gotten better in the last 50 years. As much as people hate on service industry jobs, they're much less physically dangerous than working in a mid-20th century manufacturing plant.
>> We have jobs, we have just decided that the people working those jobs are not deserving of prosperity.
I read an article years ago talking about a man that worked as a janitor for a US public school. He was just getting by on whatever that job paid. Someone (school board, business person, IDK) said if he wanted to make more money he should get more education himself, or learn some new skills so he'd be worth more and could get a "better" job. And hey, I'm all for some amount of meritocracy and all that but... If he did improve himself and get a better job the school would presumably find someone else to be the janitor for similar pay. The bottom line is that they expect an able-bodied adult to work a job that most people look down on for barely a living wage. At some point it's not about him needing to upskill it's about expectations about who gets paid how much, and America expects a lot of people to "make a living" at just above poverty wages.
I'm not sure how you change that, to some extent employers can't pay more because it's become structural and they don't actually have the money to pay those jobs more. So I have to agree with parent poster:
>> There are so many underlying changes to the established relationship between Labor and Capital in the US that would be a necessary part of keeping jobs here that it would effectively make us a completely different country.
If you upskill enough people, companies will need to start paying more for those services. And once they need it, they will find the money.
There is a reason unemployment numbers are always within the same small band. There's always money to employ around the same ratio of the population. And when people get richer, that ratio gets slightly smaller, not larger.
This really doesn't work because there is not enough demand for people to upskill. Even during boom periods like 1999, there were still janitors. Janitors did not suddenly earn more money because white-collar hiring was exploding.
You can look around the world, janitors consistently earn more in countries with a stronger middle class.
What you are calling "boom periods" are not composed of lots of people upskilling and moving into a higher earning partition of the middle class (or leaving poverty). I have no idea why you expected then to behave like something they are not.
_DeadFred_ says: "Fox News host Brian Kilmeade saying that homeless people should receive "involuntary lethal injections"
Yeah, that kind of thought crossed my mind when a homeless guy, unhappy that I wouldn't let him sponge my car's windshield, grabbed my lhs rear view mirror with both hands and broke it (the mirror no longer responds to its dashboard control). But the moment quickly passed, leaving me only with a new item for my to-fix list.
FWIW we still worship cowboys. They differ greatly from today's urban homeless.
Note that the "Labor vs Capital" distinction mostly means "workers vs retirees". The reason more money goes to capital these days is not necessarily that each retiree is getting more but that in an aging population, there's more retirees so it takes more resources diverted from workers to support this larger non working population. This problem can be solved with more babies 20 years ago or more immigration of workers now to share the burden (unless AI makes everything weird).
I undestand what you are saying but retirees are not what people mean when they talk about Capital. They are talking about executives, fund managers, billionaires, and so on. People who actually control much of our society. Yes many of the funds are managing the retirements of working people but that does not necessarily need to be the case, nor do those retirees have any active ownership of the companies those funds invest in.
Right but the majority of people holding significant amounts of capital is retirees or people saving for retirement. There is a small minority of people wealthy for other reasons. It doesn't really make sense to strongly associate these people to "capital" since they are a small minority of capital holders.
Do you have a link? What I've seen in most discussions is obscuring of the fact that the majority of "capital" is directly or indirectly retirees or people saving for retirement. Those in the top 5% wealthiest often need to survive on that wealth for decades so it's not as if they have per year spending power that is that high. You too will be at your top percentile wealthiest of your life when you are nearing retirement.
Honestly? Your favorite LLM will be able to build you a syllabus better tailored to fit your current level of understanding. But in short, Capital is the people making decisions about how money is expressed through the economy.
But to make concrete what I am saying. Take a VC fund like Lightspeed that manages tens of billions of dollars. They do this on behalf of LPs, of which the largest are typically large pools of long-term capital like university endowments and pension funds.
Lightspeed, for example, has received ~$400m in investments from CalPERS (retirement program for some California public employees) alone. That represents tens of thousands of employees and former employees. Even if the notional value of one of their retirements is (say) $2m, that person is still Labor. Capital is represented by the people at CalPERS who decide where to allocate money, and by the Lightspeed GPs who decide which startups to fund. A former county attorney who has money in CalPERS has essentially no say over how her retirement funds are invested (if she's on a pension); that decision is down to a relative handful of people she will likely never meet.
A quick way to know the difference: top 5% wealthy people can buy the house next door and make it ugly, being a small nuisance. Capital can crash the entire economy with bad bets or get laws changed/ignored at their behest (we are watching this right now with X's CSAM generation on demand).
I think with the advancement of manufacturing techniques the future is in small run manufacturing. Manufacturing won’t return with a few companies employing thousands of people. My thinking is that manufacturing will return with thousands of companies employing around 10 people. The future will be more customized solving detailed problems with unique specification.
> There is no economic rule that says that riveting should pay more than taking care of the elderly or food delivery.
There kind of is - it's the same reason B2B SaaS tend to make more money than B2C - it's easy (easier) to sell someone something if they can make money from it.
If I can pay you Y to rivet some sheet metal together and sell the finished product for Y * 10, that's a much better outcome for me (economically) than paying someone to take care of my elderly parents. In fact, maybe I'm not mean, maybe _I_ don't make enough money to afford to pay someone to take care of my elderly parents.
Economic rules are all subject to externalities like the effects of taxes, regulations, etc. I mean there is no rule in the sense that some of the jobs that are poverty wage in the US are not poverty wage in other countries due to the impact of regulation.
It's a policy choice to allow Walmart pay full-time employees so little that taxpayers have to subsidize their food. We are free to make different choices.
Riveting ends in a real item that can often be used to produce further economic value. Elder care is not analogous to this, and the economic value is only what the elder can pay for it.
It’s almost entirely a leverage problem. Insofar as we rely on the labor marketplace as the primary “prosperity” distribution mechanism for the majority of people the power balance between labor and capital will determine the average person’s level of prosperity. The following increase the leverage of labor: collective action, high competition between firms, near-zero (actual) unemployment rate, strong labor laws. The following increase leverage of capital: monopoly, monopsony, cartel action, high unemployment rate, weak labor laws.
Obviously the cost of converting wealth into tangible “prosperity” is an additional factor, so inflation of the cost of goods and services will factor in.
So if we wish to promote broad prosperity over ultra concentrated wealth we need to address the above factors: enforce anti-trust, break up firms as needed, promote labor protections and organizing, make taxes more progressive than regressive, make stock buybacks illegal again. The hyper mobility, political ties (with low national loyalty) of the capital class make this difficult but not impossible.
We will probably have to de-emphasize some sticky cultural memes around individual merit and everyone “deserving their fate” to accomplish the above. A surge of empathetic humanism would likely do wonders for the mental health crisis as a bonus.
If we were more invested in each other’s well being, especially if we had more capacity to put that care into action, wouldn’t that improve the support network surrounding those suffering from chronic mental health conditions?
Have you ever dealt with an alcoholic when he's drunk or a schizophrenic when he's acting out?
You use the word "suffering" as if they had no part in their own condition. I'm reminded of Duke, the skinhead in "Repo Man" who, as he dies, says "I blame society!":
I think you should read up on comparative advantage and the roy model of labor. Forced onshoring is likely to hurt US productivity and large wage gaps arise because of self-selection driven by correlations in productivity across jobs.
> Historically, they were better jobs due to a strong labor movement, but that movement has been largely destroyed.
There's something to be said that the labor movement was destroyed by eliminating the need for the labor. Bringing the labor back would see the labor movement return.
Not really sure how you come to the conclusion that I was under the notion that nobody is working. Union membership has been in decline for decades. Labor jobs have been leaving the country for decades. Bring back the labor jobs that the unions represent and the union membership will go back up as well. The labor jobs that still remain are what's left of the union membership.
> Bring back the labor jobs that the unions represent
Please research which are the largest unions in the US. I'm curious why union representation would work for labor jobs, but not for the millions of jobs* represented by unions now.
* These are all "labor jobs," because otherwise you're not talking about a job
Most people referring to "labor jobs" are manual labor and not some laborious butt in a chair behind a keyboard banging code all day. While there are unions for the tech industry, the entertainment industry, and other non-labor industries, labor is pretty well understood in its meaning even if you don't understand it.
You're missing a giant class of workers. Janitors, retail employees, warehouse employees, home health workers, physical therapists, etc. And jobs in retail, food prep, hospitality (certainly the folks who clean hotel rooms would be surprised to find out they are not engaged in "labor jobs".)
Might be an interesting exercise to consider why you consider those jobs as not being "labor jobs."
Service jobs are hard to export, it's just moving money around inside your country. Riveting is a job that produces goods that can be exported for incoming cash, elderly care isn't.
That is a fundamental distinction, yes. But the notion that exporting brings wealth to a country is… kinda not really the case anymore.
If that wealth is ending up in very few people’s hands, and if said people are wealthy enough that they keep their money offshore (which is the case a lot of the time), what is the big difference in making something you can export?
This makes next to no sense. Service jobs aren't "just moving money around inside your country" for the same reason that exporting goods isn't "just moving money around inside your planet".
Services sell time and skills directly, instead of in the form of a tangible good. That's it.
Unless elderly care is too expensive and people have their parents live with them.
In the late 90's when we talked about the transition to the Service Economy, jobs such as call center were touted as the way forward for the recently unemployed textile workers. Until we found we could move those to the Caribbean, Philippines and India.
I remember a number of people talking about how they could make decent money bar-tending and waiting tables. Until the economy slowed down and people stopped eating out.
Service is job that you pay someone else to do because you don't want to do it, which is great until you have less income. Then it becomes a budget line item that can be cut.
> Riveting is a job that produces goods that can be exported for incoming cash, elderly care isn't.
Where's the distinction between "moving money around inside your country" and "goods that can be exported for incoming cash"? If you go to mcdonalds to buy a burger instead of making it yourself, is that also "moving money around inside your country"? What about paying some carpenter to make a chair rather than making it yourself? Should we just cancel all jobs that can't plausibly produce stuff that can exported?
It wasn't about the labour part and whether that is exportable in the off-shoring sense.
It's about the product being exportable (in the sense of being able to sell it for money outside of your country) vs. just having people within your own economy doing "left pocket <-> right pocket".
And even with that, you can sell a waiter's service to other countries. You just have to first make them come - it's called tourism and comes with a whole lot of other jobs / supply chain(s) as well. Some of which can themselves be off-shored!
Jobs aren’t good or not because they government declares it so by fiat, there’s substantive differences between different kinds of jobs. “Service jobs” are bad because they typically require little skill, just a human body physically present in the U.S.
In contrast, many people will never be good riveters. They lack the strength, coordination, and stamina to do the job. Similarly, many people cannot be plumbers or electricians. Those are jobs that require intelligence and skill.
Reading this, one would make certain incorrect assumptions about pay in service jobs based on imperfect knowledge of skills required. One might assume service jobs in general do not require any skills at all beyond the capability to slightly warm a room.
The famous counterpoint is obviously "teacher" with its starting salary in the $20 range, but that's too easy so I will start with phlebotomist (starting under $15/hr). And I'll toss in chef (~$22/hr-$25/hr in my city) as an alternate to suggest that even in service industries skill matters (because there is a range here).
I bet many people would find that job a lot more appealing than risking your life doing shopping gigs under time pressure, without even getting health insurance.
How exactly is doing instacart runs "risking your life" without using a definition for that term that involves any task where you're required to leave your house?
> Historically, they were better jobs due to a strong labor movement, but that movement has been largely destroyed.
This is a widely believed narrative, but not necessarily true. The competing narrative that better living and working conditions arise from better technology and cheaper energy is just as supported by the data. Perhaps even more so because it also explains the post-1971 decline.
This seems like a non sequitur to me. What does (general) better living and working conditions arising from better technology and cheaper energy have to do with which jobs are considered "good" and "bad"?
How does the explanation without labor power dynamics explain the post-1971 decline? Electricity is cheaper inflation adjusted than it was then, and technology has certainly progressed since 1971.
I think even more important than the difference in taxation is the difference in freedom of movement. There are heavy restrictions on labor moving between countries, capital has no restrictions at all (except kinda in China) and can move instantly to wherever it is most useful, i.e. wherever has the most human rights violations and lowest wages. We need to eliminate this asymmetry: either get rid of all restrictions on freedom of personal movement and selling ones labor, or lock down the flow of capital with serious capital controls.
It'd be a very interesting thought experiment to completely redefine the economic and fiscal plan of the US.
It'd be interesting if we greatly reduced personal income taxes in the majority of cases. Removed corporate income tax (the idea being corporate income tax hurts all equity owners, whereas we specifically want to target the very wealthy), and then implemented a progressive wealth tax that kicks in starting at 7.5M or something (maybe something like 1.5% from 7.5M-15M, 2.0% from 15M-50M, and then 3% from 50M+, this could be done more smoothly if desired). We'd need to penalize capital flight with something (something like a 40% exit tax or something). The IRS would have to be greatly empowered to support this, net worth declarations would all be declared by the tax filer, and if audited and found to be incorrect, the IRS will purchase the asset at 70% of its declared value (or some other better mechanism can be thought of to ensure that NW is declared accurately). We'd also simplify the tax code in all other cases, removing all forms of credit/deductions/etc on income. This will free up IRS audit resources to focus on declared net worth fraud. Remove all forms of non-sin tariffs entirely.
Get rid of entitlements taxes and spend and replace it with a negative income tax that is calculated to provide a very base level of existence that never disincentives work.
Then remove government backed student loans, but make them treated the same as other loans (ie. students can declare bankruptcy). Kids should also get a 5k per annum payment that's held in trust by the government that's invested into the US total market that gets linearly released to them from the age of 18-30.
I also propose that we remove all consumption taxes that aren't a sin tax. Ie. keep taxes on alcohol, gas, etc. Implement a very high luxury goods tax.
Then completely change the medical system to be more similar to Singapore with mandatory copays of something like $20-50 (to prevent abuse), but also provide universal coverage with the government setting prices with pharma/providers.
Dissolve the ability of states to collect taxes and provide federal funding per head. Standardize/centralize all stuff like the DMV. Ie. have a single federal agency to de-duplicate work.
I don't think this stuff is viable at all (would require dramatic tweaks), but it'd be a very interesting thought experiment to see how something that tries to encourage business friendliness, the strength of the income earning population, and incentives capital effiency (over tax effiency) and investment does.
I really think that the fundamental market forces of capitalism are very powerful, we just need to change the incentives structure so that the benefits aren't captured strictly by the ultra wealthy.
>Removed corporate income tax (the idea being corporate income tax hurts all equity owners, whereas we specifically want to target the very wealthy),
I'd back this whole plan to a hilt but want to highlight this section.
I'm on board with eliminating corporate taxes under 1 condition: the company, its executives, and its board - are fully 100% banned from participating in politics in ANY way besides each individual citizen voting in normal elections.
Lobbying? Banned. PAC contributions? Banned. Campaign contributions? Banned. Hiring former government workers as "government liaisons" or "government relations" consultants? Banned.
If a corporation wishes to not pay taxes to the government, it has ZERO business involving itself with politics.
> What would lead one to conclude those would be the kind of "good jobs" everyone is envisioning?
They wouldn't all come back, many of them would be automated to keep costs down. Fortunately, this would also be good for us since automated systems require engineers to design them and technicians to maintain them.
I think that "good jobs" is a red herring for manufacturing jobs. The important question is whether they have positive externalities. According to one argument (which I'm reconstructing), working one manufacturing job improves dexterity and spatial reasoning, as well as motivating workers to learn basic math and science. These (may) continue to provide benefits to the economy after the worker leaves the position, hence being unpriced. How we manage this at a policy level is not obvious.
(OTOH, there is also an argument that manufacturing has an important negative externality — pollution)
To some extent, the pay rate for a lot of jobs comes down the available candidate pool for those jobs. The easier/simpler a job is for anyone to step into, the more likely it is to have a lower pay associated with it. As an addition, regarding service jobs, a lot of the times, you get what you put in... at this point, most customer service interactions I've generally seen have been poor at best.
Craftsmanship, pride in work, and just caring about doing a good job just aren't concerns a lot of the workforce has at this point. That's not to excuse efforts to offset employee pay into a forced tipping culture. Neither does it excuse efforts to use foreign labor as a lower paid under-class either... I think jobs for foreign workers should have pay floors that force them to be more expensive than domestic labor. If there really isn't a supply, or they really are that skilled, then pay up.
Part of the problem is the idea of fiscal duty has been tunnel visioned into what the next quarter looks like over anything resembling longer term health of a company and the communities they operate in. Not to mention VC corporations swallowing industry sectors and "extractive value" to the point those sectors collapse altogether.
Govt has largely sold out to corporate interests over the people's best interests and they are emphatically NOT the same... govt policy should be to encourage or even require competition in practice. Shared essential infrastructure should require dual/multi-sourcing with a healthy portion required to be domestically supplied as well.
I truly believe that it's in everyone's best interests to refocus beyond the next quarter, and I don't mean woke lip service... just actually considering organizational and community concerns. If we/they don't do it, communism will only grow and take over.
Because nobody actually wants to talk about the core of the problem or how to address it. They see different, seemingly unrelated problems depending on what their priorities are. The democrats are also not on the side of actually solving the problem.
"We" have not "decided" anything other than collectively making decisions about what we are willing to pay for a given service. That ultimately is what sets wages. The only reason software development pays so well is because the market will bear it, and the market isn't some cabal of fat cats in top hats, monocles, and tails (or hoodies and Patagonia for that matter). It's the collective decisions of 330 million people.
The largest reason software development costs a lot is that a cabal of people had been desperately trying to lock out smaller companies from having access to software engineering resources at such a cheap rate and eventually get taken out.
I get that from another perspective your answer is also correct, but the reality is the large pay is really so that EA's blockbuster video game sells and a small upstart of 45 software people that want to make their own amazing game does not beat them. Those 45 people will take the paycheck rather than collectively start a game company now.
What happens next no one is sure, but I can tell you, that if the amount of cheap software surfaces because 1 man army companies take out TeamViewer, Photoshop, Jira, etc... because of LLMs - then those wages will drop, and drop fast and it has nothing to do with the 330 million people "having a say".
There are also hundreds/thousands of elections annually through which we collectively set policy directions. Contrary to belief, politicians are responsive to voters over long periods of time. So over time, the policies that are continually ratified do reflect our collective choices.
And for at least the last several decades, yes we have collectively decided through our policy directions that there are classes of jobs whose holders are not deserving of material prosperity.
> What would lead one to conclude those would be the kind of "good jobs" everyone is envisioning
Your entire political statement aside manufacturing was always a good job. I’m not sure if you realize what kind of skilled labor went into manufacturing:
1. Machining
2. Tool and Die
3. Welding
4. Etc
Hell when I was working in construction I was making 20 dollars an hour at 18. That’s good money, and at the time if I would’ve stuck to it I would’ve been able to afford a decent life. My stint as a machinist while backbreaking at times was a good highly rewarding job.
Now, to address your political point. Yes, jobs should pay a living wage. Unfortunately even with such “wage suppression” America is still one of the most expensive countries to live in. We subsidize global food, drugs, etc. I can only agree with your point if we simultaneously become an export economy, and reduce or remove all global subsidy. But the party who supports raising wages also supports near limitless spending on the less fortunate countries. You cannot have both.
"The United States provides over 40% of the world's humanitarian aid, and spends around 1% of its budget on foreign aid, including military aid. Surveys suggest that Americans believe 20% of the federal budget is spent on foreign aid, and that 59% of Americans believe the government spends too much on foreign aid"
Your unwillingness to read the primary sources linked in the Wikipedia article because they show how you're flat out wrong indicates that your entire thought process can be disregarded at no cost.
Do you have a primary source showing that "the party who supports raising wages also supports near limitless spending on the less fortunate countries"?
- your suggestion that we become an export economy, here on a forum where many people are working on products that will be purchased by the world but not counted as exports (examples of non-exporters who collect money from around the globe: Meta, Google, OpenAI, Anthropic, JP Morgan Chase, Citibank, AWS)
- the idea that the way to prosperity is for Americans to move back into lower-productivity jobs. (Here I ask you to look up the revenue per employee of Costco and JP Morgan and on the other hand good manufacturers like Steelcase and Lockheed Martin and Eaton. What do you think happens if we move the workforce from higher-productivity jobs to lower-productivity jobs?)
- your confusion of an economic point with a political point
What’s your point? Say everything you just said again, but with software engineering and Indians, instead of manufacturing and the Chinese, or textiles and Vietnam and Pakistan.
There’s no reason American cars need to exist either, they basically all perform worse dollar-for-dollar, feature-for-feature, than foreign cars.
In fact, let’s offshore everything. There’s no reason not to use Filipinos for McDonald’s and In-n-Out drive-thru speakers.
Let’s all adopt Chinese tang ping. Lay down and die. Treat every effort of labor as replaceable and void of respect.
If China and India wanted to wage effortless war with the US all it would have to do is stop exporting goods and labor to us.
Please read my comment again. This time, consider that our laws and regulations are not laws of physics or axioms of mathematics and are therefore able to be changed. The comment will make more sense in that light.
We have shipped millions of jobs overseas, and ... a strange situation, we have a process in Washington where after you serve for a while, you can cash in, become a foreign lobbyist.
We have got to stop sending jobs overseas.
You're paying 12, 13, 14 an hour for factory workers and you can move your factory South of the Border, pay a dollar an hour for your labor, have no health care. That's the most expensive single element making a car. Have no environmental controls, no pollution controls and no retirement and you don't care about anything but making money.
Indeed, this was one of the first things I thought of too. I remember well the jokes about Perot being crazy, frequently used to dismiss his views. I'll never forget talking with an educated Perot voter (a friend of mine) at the time and actually being confronted with the real views, not a shallow strawman, and realizing I didn't have any good answers because I hadn't actually thought about it. That was a good maturation point for me when I started realizing the power (and danger) of bubbles.
>I remember well the jokes about Perot being crazy, frequently used to dismiss his views.
Was he crazy or was he made to look that way as an excuse to dismiss his views? Sitting here in the 2020s knowing what we know now about "how it all works" it sure does cast a lot of doubt upon the past.
Isn't is similar to Carter being depicted as a 'weak president' because he had more progressive ideas than an average US president, which make similar amount of sense.. and hence best ridiculed as a threat to "greed is good" prevailing ethos.
He was depicted as weak because during his time an entire US embassy was held hostage in Iran for more than a year. Couple that with inflation reaching 14.8% and now you understand why.
He was a super-rich guy, who had had too many people telling him he was a genius for way too long (reminds you of anybody?), and so was way too sure of himself. A bunch of his ideas were crazy, which doesn't mean others weren't trying to dismiss his views.
All shoe sizes should only be small, medium, and large. He really did have a lot of very ridiculous ideas. He also had a lot of extremely good ideas and incredible understanding of socioeconomic conditions.
His book “United We Stand” with modern context is quite amazing considering it came out in the early 90s.
If you're interested and aren't willing to take OP's word for it, the 90s are recent enough that you can probably read contemporary news articles/opinions pieces about him online (and almost certainly at your library). You can also read up on his views/life on Wikipedia.
Powerful people like those who control both parties and our news media don’t tolerate outsiders. When you have the power any deviation from status quo is a threat. A side effect of this is that voters stop listening to the talking heads and politicos when they call some political outsider a dangerous loon even when that may be a valid point.
I had a similar experience when I learned about Ron Paul back around the 2008 election. It was also the first time I had my eyes opened to information suppression when Fox News edited some of his answers out of rebroadcasts of debates.
Same! I actually watched the debate live (on AFN) while in Iraq (deployed), and when I got home and got into discussions about it with friends I had a hard time believing we had watched the same debate. Turned out we didn't, they had watched the edited version. That was extremely eye opening
The GOP/Bushes blackmailed him into dropping out of the election by using his daughter, threatening to out her as a lesbian right before her wedding. How thick a skin do you need for that?
My comment was more in general, not about any one event. Apparently he was also a conspiracy theorist and this whole thing about an attempt to disrupt his daughters wedding seems to be one of those, and he admitted he had no evidence.
I remember the debates around the time, though, and what most people said was that shipping manufacturing jobs out of the united stated would actually create prosperity here so that the manufacturing types could "move up" into less menial work. They're saying the same thing now, and although it _does_ seem that that did happen in the 90's when all the manufacturing jobs went offshore, it doesn't seem to be happening now.
One of my main arguments for a universal health care scheme in the united states is how horrendously expensive, for employers, health care is. Lets totally ignore efficacy, moral arguments, expense for the patient, etc. If you are a company in the US a large percentage of the effective compensation of employees is healthcare. A moderately good PPO is like ~$10k+ a year per employee. You can pay workers in some other countries less than just the cost of paying for health insurance for a US employee.
As someone paying for a family on a marketplace bronze plan, that’s a bargain! I think our premiums will exceed $20K this year.
With all of the medical group consolidation, all of the wait time woes our Canadian friends always complained about are the reality here now as well. So I’m paying more than anywhere else on the world and have to wait 6 months for a PCP appointment. We have the worst of both worlds.
I'm curious to compare this to other countries that have state owned/mandated insurance and are so far still mostly covering everything and which are always touted as "superior" to the US, who "have the most expensive health care system". Can't use Canada as OHIP et. al. don't cover much and the same employer tied insurance scheme as in the US exists and is necessary.
An example of a country with "good healthcare" and such a system would be Germany. Extra insurance does exist there as well nowadays from what I understand but health insurance isn't tied entirely to employment and the extras are things like a 20 EUR per month to cover the co-pay on large and expensive procedures. While private insurance exists there too, I want to compare to the often touted "free healthcare" i.e. public system. There are still different providers even under the one public system.
So from a quick search, Germany has insurance rates from ~14-16% of gross salary, half of which the employee pays from their gross salary. But most insurances have an extra percentage they charge on top. I found one as an example that charges 17.29% total, which if you're self-employed, you have to cover yourself (to be comparable to your marketplace bronze plan being entirely self-paid).
Now the question becomes: Are you paying more or less as a percentage of your salary and by how much?
(and side question for your parent I guess: how does that compare to the $10k the employer pays, which would be 8.645% in this example)
It is actually more complicated than this implies. For example hospitals are often held afloat by Medicare/Medicaid spending (25%/19%). Private health insurance is about 37%, so larger than either, but smaller than both. But then you have to remember that some of the private health insurance is being subsidized by taxpayer dollars (e.g.: the ACA subsidies), and that private health insurance is largely coming from tax exempt dollars (a form of subsidies). So where the costs are actually being paid is more difficult.
I am not sure where your question about a percentage of your salary is valid on the face of it. Do you count the employer portion of your medical coverage as part of your salary? Do you count the tax exemption? How do you figure the taxes taken out to support Medicare/Medicaid/Veterans Health (all of which are required to support the system as it exists)? And how do you figure that for single payer systems?
So a much more direct way of comparing is to look at total costs per person, and then figure out how outcomes compare. When you do that the U.S. comes to about double the cost, and generally worse outcomes. Conservative politicians will scream about how long it takes to get procedures, but the research shows that elective procedures take about the same time (and no-one waits for emergency procedures in comparable systems).
I asked from an employee and cost perspective. So whether or not to count the employer portion depends on whether we're comparing one or the other. If you buy on the marketplace in the US, compare with the full cost in the example I gave for Germany. If you get insurance through your work the US/CA, compare with the employee only portion (as the employer pays part of the insurance there as well).
Theoretically it's even more complicated as at least in Germany private insurance also exists and is cheaper if you're a healthy single youth and more expensive if you're an older family ;)
But again, like you say, it is totally valid to also compare outcomes / wait times per dollar spent of course.
Canadian (OHIP recipient) here. As a long time employer, and former employee, I can tell you that no one takes a job here for the heath care.
Some things like dental and vision are not covered (unless you are under 18, over 65, or low income), but everything else is.
Over the course of a decade my father in law had 3 heart attacks, a stroke, and ultimately lost a year long battle with lung cancer. The total health care bill to him (or his employer) was $0.
Now the downside … because health care is free, everyone uses it and the wait times are longer. My grandfather recently required an MRI (non life threatening). The wait time in Ontario was 3 months. He drove to the USA, paid out of pocket, and had it done within in week …
> Now the downside … because health care is free, everyone uses it and the wait times are longer. My grandfather recently required an MRI (non life threatening). The wait time in Ontario was 3 months. He drove to the USA, paid out of pocket, and had it done within in week …
Imo, singapore solves this well, by ensuring that some cost is borne by the patient at point of use, but it's never anything excessive. No one goes bankrupt from emergency hospital visits.
> Can't use Canada as OHIP et. al. don't cover much and the same employer tied insurance scheme as in the US exists and is necessary
False. From what I know, only prescription drugs, dental, and vision are not covered. And since Americans frequently drive to Canada to buy prescription drugs, we can assume that's not as big a burden as in the US. But hospital stays, surgeries, lab testing, imaging, doctor visits, vaccines are all fully covered.
Fair enough, I guess I got carried away given the private insurance has to cover drugs, which would otherwise be covered by the provincial insurance (like OHIP), if you have it.
Private insurance also can cover a higher percentage, i.e. provincial plans do not always cover 100% of everything. Also, Health Care Spending accounts are in many cases part of private insurances and can be used to cover things that provincial plans do not cover at all (unapproved drugs et. al.)
And just for context … if medication is not covered and has to be paid out of pocket, the cost is generally under $100. Canadians don’t have $1000 medical costs
The first info about what's not covered for example is concerning diabetes. There's a limit to the number of test strips for example. I'm no diabetic, so I don't know if these numbers are "enough" or not but there is an actual limit. It also then states:
Syringes, lancets, glucometers and other diabetic supplies are not covered by the ODB program.
If you're a senior with "too much income" you also have co-pays/deductibles, meaning the coverage is less than 100% of the cost of the drug:
A single person aged 65 years or older with a yearly income above $25,000 after deductions pays:
the first $100 of total prescription costs each program year (August 1 to July 31 the following year)
this is called the deductible and is paid down when you fill your prescriptions
after paying the deductible, up to $6.11 for each prescription, filled or refilled
this amount is called the co-payment
I'll stop here but I'm sure this is both similar in other provinces and/or other limits may apply in specific cases.
Just to be clear: I'm not saying the OHIP / other Canadian insurance programs aren't great overall in comparison to the US. But neither they nor I suppose Germany's "full coverage" actually are in all real world cases.
I'm pretty sure the original 10+k/yr/employee for good ppo coverage is a radical underestimate, for what it's worth, though I guess "way more than ten" is technically part of the "ten+" range, haha.
The last time I had reason to look at full market-rate price for a family of four for a good PPO (Seattle market, circa five years ago, large tech company), it was around 3300 USD per month, or over $39k/yr. That was for cobra coverage, so a combination of what I would have normally paid and what the employer would've (about one third us and two thirds them when I was employed by that corp). I can only imagine it's gotten more expensive since then; we left the country three years ago.
I got the $10k a year employee from chatgpt with "Assume I have a company with 100 employees in New York, how much on average does it cost to provide health insurance" and it gave me poor, moderate and good ppo plan prices. I figure this seemed reasonable for ballpark figures from employer friends, so the numbers may be very well off.
Just as an FYI, that is a massive outlier based on available data.
My employees are about $500 per month in a major metropolitan area, and a family of 4 can run up to $2000 a month for the most expensive plans (I cover individuals and their spouses in full for standard plans, and could cover one dependent for basic plans).
I looked at marketplace plans in WA because I was curious, and it looks like it's about the same as where I am but nowhere near what you were quoted 5 years ago.
So the ~$10k a year is just what the employer is paying in my example, taking some numbers from chatgpt for a medium sized company in new york. Not even counting the employee side of the premiums, which can be crazy high as well.
The key part of your statement is that you're paying for a family.
Individuals do not cost $10k per year under any normal circumstances, and if you're paying almost $2k a month for a family bronze plan, you either have a lot of kids, you have some unusual needs, or you are getting ripped off. Even more so if you're waiting for a PCP appointment, because that is unusual as well.
This is true, but frontline healthcare staff wages are only one part of the problem. For specifics you can see details here (e.g.: US average front-line healthcare worker salary: €74.450, Germany: €40.522):
But even absent any movement there you have a lot of savings to be had away from that:
1. The U.S. medical administration costs have ballooned, in large part because of the highly adversarial billing system between insurers and practitioners. Medicare/Medicaid is much less (but not completely) unpredictable. Doctors complain bitterly about the prices at times, but the system is much more efficient.
2. U.S. insurance companies are woefully inefficient. To the point that companies complained bitterly when the ACA required them to pay out 80% of premiums as medical payments. Before that there were companies making more than 20% profits. The most efficient insurance companies today use about 12% of their revenues for non-medical care. In comparison Medicaid uses about 3.9%.
There are lots of other parts you could address as well:
1. Fraud drawn to the huge payouts for medical bills. If people's accidents were just covered as a normal part of life those payouts, and most of that fraud just goes away.
2. Malpractice insurance. This is like the first, but would mostly be solved by a combination of single payer and a working medical review system (seriously, what we have now is the definition of regulatory capture).
Wages for doctors and staff are not the cause of high medical bills.
The US spends something like $4.9 trillion dollars on medical care, and employs around 1 million physicians, 4.5 million nurses, or 9.8 million health care workers in total [1].
If this was paid out in wages the average health care worker would be make almost $500k/year. Compare that to the wage of the average doctor at $335k/year [2] or average nurse at under $100k/year. There is a lot of money in medical care that is not going to wages.
Doctor and nurses are not bureaucrats. Single payer would significantly reduce the bureaucracy in healthcare, and simplify everything for citizens and businesses.
The main cost driver in medical care is provider (nurse, doctor, etc.) wages, not bureaucracy or drug prices (though they're frequently cited). I have tired of posting sources for the statistics, but they are very easy to find.
From what I've heard from doctors online, a large chunk of their time is basically spent just coaxing insurance. They waste time figuring out what they can and cannot bill, tailoring that to every patient, and constantly keeping records of everything. I think, for many doctors especially in small practices, treatment is a minority of their time.
Obviously, paying someone 300K a year to sit on a 1 hour peer to peer explaining why they think they should do a surgery is just bad business. But, we do it, and I think a lot.
Exactly. You can believe the "main cost driver in medical care is provider (nurse, doctor, etc.) wages" all the live long day, until you realize they too spend a lot of their time dealing with bureaucracy. The true cost of bureaucracy cannot be accounted for by simply tallying the number of bureaucrats and their salaries.
So, let's look at UnitedHealth Group; do they deliver health care?
If there were single payer, what would their role be in the healthcare delivery process?
Apparently they made 2.3 billion in profits on 113 billion in revenue in Q3 of 2025. How much of that friction would evaporate if they weren't in the healthcare delivery infrastructure.
Compare UPS or FedEx to USPS; the first two companies are profit-seeking, yet very competitive with the 'public-oriented' (and legally privileged) USPS. Having the government in control does not necessarily lead to better value.
I've lived in cities where the city ran the utilities; they were generally way cheaper than the utilities from PG&E.
The USPS is obligated to deliver letters at the same cost to everyone in the country, and they do a pretty okay job at it -- I've certainly had horrid events from UPS and FedEx, and those guys get to just pass the crap delivery tasks off to USPS if they don't like it.
Lots of old people in the USofA seem to like their government run medical insurance, same with people in the VA system.
The Doge crew spent months looking for fraud waste and abuse and I don't see any big law enforcement results from all the fraud they found, and I don't see anyone crowing over all the waste they curtailed.
It's possible that the world's more complex than you imagine, and that sometimes people just do their jobs (IE the bureaucrats) and hard problems get solved.
Now, tell me again, what part of the health care system is UnitedHealth? What critical problem do they solve?
They are very competitive in the places where most people live, but the USPS delivers to many more places that the others do not, and still maintains cost competitiveness.
This turns out to be a decent analogy to healthcare: insurance companies do not provide the coverage, universality and simplicity that a single payer system would; instead, you'll get something like insurance coverage networks providing spotty and inconsistent care.
Either approach has upsides and downsides, but single payer, universal coverage for basic and emergency healthcare seems like a no-brainer.
$2.3 billion is nothing in a $5 trillion system. Doctors make around $500 billion in the US. Their wages are much more significant than insurance profits.
That's 2.3 billion in ONE QUARTER of 2025, on a revenue of 115 billion. In a quarter. There are four quarters in a year.
$5 trillion is how much is spent in all of healthcare in the USA for the whole year.
UnitedHealth's revenue was $500 billion (and net profits is 10 billion) for the year. For one insurance company. There are 6 that each have more than $80 billion per year in revenue. This isn't to mention the billing departments for each hospital, the claims processing providers smaller doctors need to enlist, the endless hours interacting with insurance companies, etc.
And tell me, please, what specific healthcare outcomes are driven by insurance companies?
Insurance companies are instrumental in ensuring that useless procedures arent performed. Over use of service is one of the biggest reasons for inflated costs in our healthcare system. Now to be clear I would prefer a medicare for all system implementing that, but under m4a doctor salaries are still a major issue that need to be addressed.
Basically all healthcare spending in the US goes through insurance companies, Im not sure why you have a problem with that. Under m4a medicare would spend trillions a year, would you be complaining about that too? Large profits would be a problem, but that doesnt exist. Our healthcare system is rotten top to bottom, insurance is part of that but imo it gets way too much blame for existing in the system the government has created.
Insurance companies basically mirror the reimbursement policies put in place by medicare. I'm sure most providers would gladly take lower reimbursement from a single provider over the chaos and pain driven by insurance companies right now.
Basically every provider does not take medicaid so I suspect you are wrong about that. Again Im not happy with the insurance situation, I just think its barely top 10 in terms of problems with our healthcare system. The bureaucracy is required because of our horrible fee for service payout system. Without getting rid of that m4a would still requires an army of billers because republicans would constantly be screaming about the government being scammed(and they wouldnt really be wrong, healthcare providers do tons of wasteful procedures and the bureaucracy is the only thing slowing that down(recent example I came across, currently we wake up obgyn's to perform emergency medically required abortion services at the hospital even though abortions can be done with a pill and the nocturnist can safely oversee the whole thing, no need to wake anyone up. This is only done so providers can charge us more money. This shit is happening constantly over and over again every time providers can find ways to nickel and dime us and patients have no choice)). We dont actually need single payer to get rid of fee for service so really I think private insurance is an orthogonal problem to the billing army.
$2.3bn is profit after subtracting costs. Doctors charging time to deal with bureaucracy needed by insurance adds to the costs that are already factored into the revenue. Single payer wouldn't just eliminate the profit, but also those costs.
>The United States medical industry is one of the highest paying in the world.
Which the industry views as a historical accident, and now that they basically own all the hospitals and other companies, you can expect them to fix it.
I would expect neutering Doctor labor power will happen soon. This admin will get a small donation or two, and the republicans will insist that letting doctors have high wages is the sole cause of our expensive healthcare. They've never really cared about the truth, seeing as they have often claimed "Medical tort" is the cause of healthcare costs, even though places like Texas, which have limits of Medical tort payout don't have cheaper healthcare.
Medical tort is a large part of our bloated healthcare costs. The problem with these discussions is that our healthcare system is horrible and has many things going wrong, so both sides can simultaneously be right.
The problem is that in the US it's a fixed amount vs in Germany a proportion of your income. This works OK for higher incomes but for lower incomes it's a big problem. And as always, the people in the middle get screwed. Not enough money to afford the premiums easily but too much money to get subsidies.
SO this is just what the employer pays. The employee then pays premiums monthly as well for access. Employers pay somewhere between $5k and $25k (or more) per employee a year for health care depending on quality and portion of premiums they pay for the employee. Usually its split, so someone makes $80k a year, they pay $10k a year in premiums, employer pays $10k a year in premiums.
The irony of the situation when you realize that you can probably get healthcare yourself in India (not sure about other countries) but for even a very good healthcare program to be around 25$ per month
And that 10k$/year can be considered middle class / heck I can even argue just slightly above middle class in India
And you can actually enjoy food and a lot of things really cheap as well
Usually the only problem becomes if something is inherently expensive (think college or land) which is where PPP does hurt but in everyday life, I think India's decent to live in.
Now I want to ask you but even if someone spends around ~$10k+ a year, even then I have heard people describe american healthcare subpar. Like why? Is it just corruption at healthcare level and lobbying efforts?
Is there truly nothing that the average american can't do about to make things better for the healthcare situation. To me its feeling like america's moving even backwards right now from cutting medicaid putting even more strain on the amount and still even on the average person themselves as well.
There is no simple explanation, but an important issue is that there is no price discovery mechanism or system pressure for efficiency. You also may not know that the US healthcare system is also an elaborate jobs program. Walk into any hospital and you will see 5-10 mostly young women doing basically nothing. I don’t know why the powers that be decided that the US should divest itself from any useful work, but here we are. Now we’re a couple generations into this social experiment by “smart” billionaires and their courtiers, and the military industrial complex is begging the Taiwanese to hold our soft hands and teach a blossoming generation hipsters and resentful immigrants how to build the computers we invented. We had a good run, but we’re Rome circa. 400-500 AD. Don’t let the marketing in Venezuela fool you. I’m just hoping the robots give us a few more decades of working plumbing.
It's like every other compliance cost. It hurts the little guys more than the big guys. Too much of the US economy is big players so the status quo persists.
"how horrendously expensive, for employers, health care is."
So why aren't they pushing for abolishing employer-based health insurance? They had no problems getting rid of pensions but for some reason nobody really lobbies for employers to get out of the health care business. The same for 401k. Why do companies have to manage those instead of just contributing some money and let the employees find the right package on the open market?
Union employees have negotiated healthcare into long-term contracts, making it hard for those employers to switch. (Feel free to read up on so-called "Cadillac plans" during the original ACA negotiations for more details). The size of this market makes employers exiting a non-starter IMO. Any org that wants to exit will see a huge resistance to this change even if they can showcase all the common benefits.
Because if they let employees manage their own retirement accounts some of them would gamble all of it on crypto or options and lose it all. Then, because our society has become fundamentally incapable of saying "You are an adult. You have nobody to blame but yourself, and now you will face the consequences," this will become someone else's problem to pay for it.
>Because if they let employees manage their own retirement accounts some of them would gamble all of it on crypto or options and lose it all.
This part is true.
>Then, because our society has become fundamentally incapable of saying "You are an adult. You have nobody to blame but yourself, and now you will face the consequences," this will become someone else's problem to pay for it.
Except that's an incredibly stupid short-term way of thinking. Because regardless, we end up paying for people's mistakes. As we should, because that's the whole point of society - we need to take care of the failures, the degenerates, the pieces of shit, etc because they play an important role in society - they too are humans and some of them weren't gambling away their savings out of a sense of fun, they did so to be able to continue to live in a day and age where costs continue to skyrocket, job growth is negative, and the economy is being hollowed out. We have many tools and mechanisms to help the winners in society. We need that for the opposite party, too. In winner-take-all capitalistm, the losers will always outnumber the winners. And you need to make life palatable for the losers, in hopes that their luck may one day change. Because if you don't take care of people who continue to lose and have nothing going for them, they will grow in numbers and eventually eat you.
And besides, we've bailed out enough bad actors in important sectors of the economy that main street deserves to be taken care of too.
Someone will always have to pay for it, because we don't generally just let people die. And even if we do, someone still have to scrape their rotting corpses off the street, no?
Radical individuality is an illusion. Yes, it would be nice if everyone could be solely responsible for paying for their healthcare or retirement. But is it possible? If you can't answer if it's possible or not before you do something, you probably shouldn't be doing it.
It's a price to, in a way, handcuff workers. Systemically combined with policies that make sure unemployment doesn't get too low, weaken labor power, tie other benefits to employment, etc. Workers know they need your job to have affordable healthcare, so they have no choice but to stick with it even if it is somewhat crappy.
And yet they never lobby for nationalized health care.
Because "Deal with our illegal, immoral, or stupid work requests or literally lose your healthcare" is such a massive bargaining chip for them.
They would rather spend more money and have more docile and controllable workers, but not spend that money on paying workers more to be docile and controllable.
We almost do. Employers must provide insurance. If you’re unemployed you can probably get Medicaid. We have private entities handle the details instead of something that looks like the Post Office. There is nothing anyone in Congress can do which results in all 8 billion people on Earth having instant access to all conceivable treatment in any location the the US. Like socialized medicine, there is no meaningful price discovery mechanism in the US. Unlike socialized medicine, it’s a lot harder for political parties to conduct pogroms by rationing resources and euthanizing demographics that don’t vote the way they like.
Not sending production to the place with the cheapest labour is great way to have your companies being outcompeted by foreign actors. Unless we want to return to mercantilism a global empowerment of organized labour globally is the only real way to fix this.
The only reason offshoring is ever done is because leadership does have a vision beyond the next quarter. Offshoring takes years to pay off because of the upfront costs and time it takes to work out how to run the new operation efficiently.
I guess, but the real issue here is that capital will mount a concerted, decades long effort, to prevent global organization of labor. Its not like its per se impossible to get enough global labor organization: its just profoundly, aggressively, even murderously, opposed by people who have power.
I guess we could think of that as just "part of the reality," but I think its a little silly not to at least mention it.
It is not realistic but even worse it isnt even desirable.
There is huge swaths of opposition to "global organization of labor". The last thing you want is to oppress a bunch of people under your vision of perfect government.
Labour is still going to be cheaper in offshore countries simply because of purchasing power parity.
Even good conditions and everything in country like India paying them around 10-30k$ is seriously really really good (source: I live there) and its english speaking and well integrated etc.
I saw another comment which mentioned that just merely healthcare in america can cost around 10k$/year
So Labour should be empowered in a good way but this idea still won't help america simply because of power purchasing parity.
Not to forget that America is going through some really tough economic crisis right now which it needs to figure out on. The deficit is still high and everything and companies are favoured completely capitalistic and so combined with all of these factors, we really come to the situation where it is.
I appreciate your optimism but I have my doubts. Especially when one reads the tense atmosphere of America right now
I think it's hard to overstate how big of a deal "Labour needs to be empowered globally" is.
Think of it as two huge reservoirs of water, one of which is at a higher altitude. If you connect them with a pipe, they will inevitably tend to equalize - this is what is happening with globalization. It's good for the developing world but bad for the developed. The labor class not only needs to demand better working conditions, but also standards of living, environment regulations, housing, etc. etc. until equilibrium is reached. The owner class will be exploiting the difference until that happens.
I doubt that an equilibrium can ever be reached tho.
The biggest issue is that even if one provides better working conditions, but also standards of living, environment regulations, housing, etc. etc
Even then, there would still be an imbalance and equilibrium would still not be reached simply because of power purchasing parity and other factors.
Plus another issue is corruption. There are rules and laws already in place but corruption takes their way
Also another thing but corruption can actually also take regulations and hijack them and actually penalize things simply for reducing competition etc.
Corruptions also the reason why we have enough food to feed the world but corruptions in the way and I am not sure if there is a way to solve it
y'know I have this pet theory that corruption is everywhere but the incentives of corruption/ways changes.
In the UK, the prices of rent are so damn high, this is a developed country.
In America, corruption takes place in the form of lobbying and the coupling of politics and finance and also the immense parity of money between the average person and the CEO salary's ratio being one of the highest and the shrewd incentives being one causing these issues in the first places being written almost in law, CEO's of major companies will fire 10_000's of people or more in a blink of an eye.
China, although secret, In my opinion has corruption inside the country as well from a more political standpoint as well
In India, there are some regulations and systems meant for good but people skirt through them via corruption.
So I don't know but to me corruption feels natural in the sense that altruism can't be the only gene and biology would dictate maliciousness to be present
This does make me sad thinking about it but I think that the nash equilibrium is unfair. This is how the system works, this is a cycle and Countries Like India/China once were super rich then became poor then are getting on their path again
At the end of the day, the person speaking about this Jensuan huang is corrupt as well selling AI hype in the first place, spiking actual prices of actual goods people buy thus contributing in inflation but also that some people accuse them of even writing this statement as a way to people please
When I had thought about it previously, I think um the best things we can do is probably reduce the incentives of corruption and then the nature of good ideas would take prevalance.
It's also just not a developing vs developed countries thing anymore as I said. We see in the news cycle how much blatantly corrupt America's current administration is becoming.
At the end of the day, facing reality is hard but that's the only way we can really put real change in the world.
if you have some thoughts about how to counter corruption in your idea/ actually creating incentives to be good and not corrupt or even malicious compliance in your idea and I am listening and I'd love to discuss more about it.
I wish there was less corruption but I am starting to think that incentives are set this way to help corruption and those themselves might've been/were brought by corruption themselves as one wrote on HN once that corruption brings more corruption , so how can one stop this vicious cycle? Because if that happens, I am telling you that America has enough money but the corrupt forces distribute them in a concentrated manner, even solving that problem to me feels like something which can help empower the labour globally
perhaps the rich can be taxed for what they deserve and that money can then be spent in developing countries labour class in your idea? This to me feels the most okay way to help but the problem is, nobody's taxing the rich/its hard because of all the loopholes/malicious legal compliance in many places.
> Not sending production to the place with the cheapest labour is great way to have your companies being outcompeted by foreign actors.
Or it's a great way to spur innovation in automation, which has other beneficial downstream effects. This is what people always seem to forget to consider, and I don't know why.
That's like rich people threatening to leave if taxes are raised. It's always a bluff.
And, the cheapest labor is slave labor like Dubai and the US (via prison labor in current use by multiple major corporations) use already. If there's no floor of standards, that creates perverse incentives and ridiculous instability.
> Not sending production to the place with the cheapest labour is great way to have your companies being outcompeted by foreign actors
This is is a fallacious argument. Most or even all of those places couldn't have hoped to out-compete the domestic companies without the traitorous companies shipping complete factories to them. The reason the Soviets didn't outcompete us wasn't down to just incentive structures (though that was part of it), quite alot of their failure was down to being locked out of the market on machine tools.
Basically, A company is bound by legal precendence to focus on capitalistic gains. It would be better if we argue the existence of other structures/their prevalence but I don't think that we can blame the entire companies but the darn structures that they are in
A CEO makes 100x (yes its not becoming hyperbole, sad reality) than workers. He is given power and he is given incentives to cut money wherever he can. He sees off sourcing and does this.
But I am not seeing America go towards a path like this, on the contrary, we are seeing America try to actively talk about workers in here and then talk about businesses without doing anything about all the issues in the first place.
There is a fundamental conflict of interests and America's promising both sides. It honestly feels political to me now because the news cycle for America is moving so damn fast (which is really really bad) that nobody comes to question these things in the first place or most aren't because they aren't literally having the time to do such with all the news cycle imo
I don't really know what America can do at this point.
> This is is a fallacious argument. Most or even all of those places couldn't have hoped to out-compete the domestic companies without the traitorous companies shipping complete factories to them. The reason the Soviets didn't outcompete us wasn't down to just incentive structures (though that was part of it), quite alot of their failure was down to being locked out of the market on machine tools.
Do you have any sources for this, I found it quite fascinating that machine tools can play such a big impact.
If it is, is it a sort of chicken and egg problem where machine tools require factories themselves which again require machine tools. If so, why couldn't Soviet Union just import some from other countries to bootstrap the production of tools which could then bootstrap all factories?
This just comes down to their incompetence. They were communists so they refused to just let thousands of domestic companies start up to produce the machine tools domestically to solve their problem. China did.
It’s true that American companies have benefited from sending jobs overseas. Instead of trying to stop them, perhaps we could explore ways to share this money more fairly across the country.
Everyone in business seems allergic to "pay domestic workers living wages and provide flexible working arrangements with good work life balance" so we will only arrive there through politics, unions, and structural labor shortages as the prime working age population cohort continues to shrink, imho.
Honorable mention to Senator Bernie Moreno of Ohio for introducing legislation to tax outsource payment flows.
> Everyone in business seems allergic to "pay domestic workers living wages and provide flexible working arrangements with good work life balance" so we will only arrive there through politics, unions, and structural labor shortages as the prime working age population cohort continues to shrink, imho.
I think its because I suppose we can either talk about small businesses who can be very cost cutting because their overall profits are very thin (you really can't blame them that much I think)
And the medium to large corporations either take Venture funding and want to cost cut to show more growth or maximizing share holder profit
The case you're referring to is Dodge v. Ford Motor Co., decided in 1919, where the Michigan Supreme Court ruled that a corporation must operate primarily for the profit of its shareholders, rather than for the benefit of employees or customers. This case is often cited as a foundational example of "shareholder primacy" in corporate law.
This is the root cause of the issue.
Do you know that there is a solution to it
They are called social enterprises and there are legal frameworks to do that. You might've seen some labels given by independent parties to show that as well
So they exist, but nobody creates them, why?
Because, its insanely hard to raise funding in them compared to the average structure. I looked up into it and the system of funding is just created such way where it rewards any and every cost cutting
I think that just like non profits get good value from doing good. A middle way where a company's purpose becomes some aspect of social good and not entirely profits. This might help but we need govts supporting them (similar to perhaps even non profits)
I have a hypothesis that if you provide easy access to lower interest loans with less collateral overall (perhaps even none?, provide micro-grants perhaps) at a federal level/banking level might be the best way to really start up some new innovation whose idea is social mission
Most people have an idea of enough, I think that academically inclined people who create companies would really appreciate this and this could even include the creation of things like google etc. which really just turned evil from dont be evil because of the wiki link/case that happened imo
Taxation as you say in the 25% tax won't really work that well imo as we saw recently in the tax scandal recently in America where billions were lost.
Although so much of US especially its politics is so much lobbied etc. that I find the idea of this change just stopping because it could prove a real threat to the completely capitalist corporations which will fire 1000's of people in an instant
Also whenever you position something as tax, the capitalist forces would find ways to evade it anyway, here let me give some ideas on top of my head
What would happen if people paid outsourcing companies via stablecoin crypto, how would you tax that?
What if things like this can count as gig work and laws related to that?
What if an outsourcer creates their own mini company and such creates an invoice, I am not sure but this would be considered a service so how would that work, is there a service tax if so how much %?
Suppose somebody got a consultancy company to work on a project and then just created the project end to end and deployed it and just tweaked it enough where its a mini saas designed just for that company, the company/consultancy can argue its a saas, so how would the taxation work for saas. Are we gonna reach a point where even things like saas could be highly taxed?
The easiest way seems to me crypto for (bootstrappable outsourcing?) but depending upon the size of the outsourcing, they can employ multiple methods as I gave.
How would the govt approach the multiple loopholes as such?
The whole issue stems from a pure capitalist system where it sometimes rewards to do malicious things so long term, countries need to find ways of supporting social entreprises/funding them.
If we had some tariffs that somehow just canceled out the exploitation (of people and the environment), that could be interesting. “Stop sending jobs overseas” is too blunt, create a fair international market and let winners win.
But, I don’t think anyone is naive enough to propose such a thing seriously. It is impossible to believe that some administration wouldn’t use it for political favors.
> create a fair international market and let winners win.
Why? It's selfish, but since the US and EU sent jobs out to India and China. India and China, have created protections that make getting those jobs back nearly impossible short of stopping payments. At the same time, these countries have huge trading imbalances (see FR complaining that their CN trade imbalance is untenable) and have become the defacto for cheap labor.
I’m not sure what the “It’s selfish” part means, did you leave out a suggestion of some selfish action you think we should take?
I’m hoping that free markets tend to produce winners more often than protectionist ones. I don’t really want stagnant US companies to just stick around because they cozied up to the government.
Doesn’t HN have some system for lowering threads that have, like, acrimonious voting patterns? Under the assumption that they are producing more entrenched argument, instead of informing discussion.
The dignity of three presidential candidates who disagree with each other, sitting quietly while allowing the other to finish using their allotted time…
And yet the timeframe Huang mentions does not go beyond 20 years ago, indicating his statement is little more than political posturing.
Also, last I saw, he wasn’t prevented from speaking at any point in those past 2 decades and I don’t remember any mention from him about these issues despite the fact that there’s been bipartisan concerns about manufacturing in China for at least a decade.
It’s almost like he’s trying to position his company’s profit growing enterprises as a part of helping the poorest Americans to justify the U.S. taxpayer paying for a lot of it, or at least assuming all downside risk…
>And yet the timeframe Huang mentions does not go beyond 20 years ago, indicating his statement is little more than political posturing.
20yr ago you could at least plausibly lie to yourself and say that things were ok. The seeds were sown back in the late 60s early 70s at least. Fair amount of gas was put on the fire in the 80s.
Fatten up the pig, then carve it can you fatten it up again?
American leaders lost hope in Americas ability to build the future. They decided this was as good as it's going to get and squoze the people at every level with unproductive IT, bureaucracy, consumerism. This country doesn't have a workforce capable of building the future anymore, it's dropouts and druggies the lot of them.
He is not causally connecting "AI" with industry and manufacturing here. Building data centers isn't manufacturing. He says in this piece that energy production needs to come first, and manufacturing later and not the other way around. Is he saying that AI will require building out energy production and the increased energy production will be used for... manufacturing? But it'll be used for the data centers.
What, exactly, is the kind of manufacturing he's envisioning AI will bring? He's not saying. Is it perchance weapons systems? It's weapons isn't it[1].
That will only make sense if we go back in time a few decades and some assholes instigate more wars and global destabilization, because manufacturing weapons and stockpiling them is pretty pointless and resource ineffective otherwise. We know this from before.
Or is he saying chips? So is he against offshoring all chip manufacturing to TSMC? That's basically been a huge part of continued security guarantees (if you can call them that when they are unproven), and also he's Taiwanese isn't he? I don't get it.
Now, one of my errors here could be that I'm trying to make sense of the things Jensen Huang says, because he rambles incoherently quite a lot, after all, to such a degree I am not sure he's "entirely there".
I don't know about Jensen specifically, and I can't remember the guy at the moment, but there have been a few tipped hands including one where the guy on national TV said something about "Americans should be gluing the iPhones together in the factory, not Chinese" and it really made a lot of this stuff click for me: they want to provide low-paying American jobs in American factories. That's probably not the whole vision, but it is a big part of it IMHO. I'll try and find the quote or video but if someone else remembers this, please share a link
That was Howard Lutnick. He's said a lot of, let's say "out-of-touch", things. He's not living in the real world, though.
Motorola tried that not too long ago. Didn't go well. If you want to decimate American wages, you could do it, but if you at the same time deport people who were the most ready to work for a pittance, it's going to be hard to do this without riots. Then again, Stephen Miller wants those riots, so maybe you're right.
The crux of the matter is that those workers won't be able to afford the iPhones they're assembling, however.
Despite their belief to the contrary the executive branch is in charge of very little in this country. They are harassing and extorting in legally dubious and often outright illegal ways, but companies and institutions and individuals are getting wise to the fact there’s very little power these guys really have because the law is structured to prevent executive abuse of power. All you have to do is get your suit filed and get a stay, and sooner or later the governments case likely falls apart. It’s frictionful for everyone involved and will sooner or later cause serious damage to the economy, but increasing as the initial shock fades, everyone is realizing the president is fairly weak and his antics and his hand picked but of loonies undermine any power they might have. It’s not Howard Lutnicks world, and as time goes on it becomes less and less so as they squander the reputation of the presidency tilting at windmills.
The old chestnut that Henry Ford didn't actually say comes to mind though: "I wanted to pay my workers enough so they could afford the cars they were building."
If they were making them in the US, Tim Cook could pay them enough to afford an iPhone on a payment plan with Verizon or AT&T. Even if he didn't want to, there's a federal minimum wage US workers employers are required to pay. What's frustrating is the investment Apple made in China is double the size of the Marshall plan the US invested in rebuilding Europe after WWII. That money could have been spent on America, but Steve Jobs spent it on China instead.
This is wishful thinking, and similar to how how video game producers think if they stop N people from pirating a game, there will be N more copies of the game sold.
No, instead of that the game will be played less. And analogously, less iPhones would be produced.
You could argue that less iPhones would be good for the world, but that’s orthogonal to the topic.
IPhone production cost in China is between $10 and $30 per item. I believe a factory with US-level wages would not increase its price but it would definitely decrease Apple's profit margin.
You're overestimating the proportion of the price attributed to labor that goes into an iPhone. The reason that production is offshored is to shave off a few percentage points. The price difference is almost nothing to the buyer, but a lot to the owners of Apple.
iPhones have nothing to do with videogames. They are material objects, not zero marginal cost copies.
edit: and the point is that, across the economy, it is very good for labor. While the iPhone's cost would rise a little bit nominally, it wouldn't rise as a portion of income, which is the only important number. The retail price would probably rise a bit more than that, but that's because it is a luxury good and its price would rise as incomes rose.
> price attributed to labor that goes into an iPhone
Oh, that was not my point at all.
It's that we simply do not have the scale and manpower to do it. Maybe in ten years with more automation sure, but definitely not in the Steve Jobs era.
Interesting take. I would happily give up my iPhone if, instead, the US Department of Education got an extra $55 billion/year and US would pay people to go to college.
US pays people to go to college, but just the outliers.
It's an interesting tradeoff, make the outliers the best in the world at what they do, or make the average person slightly more competent.
I think it's difficult to design a system that makes both outcomes true at the same time. The countries that have succeeded in doing it so far have a tiny population compared to the hundred millions of students US/China/India has now.
China seems to be slowly moving to a system comparable to the US one where outliers are prioritized. India has avoided it so far, which is why we see so many generic software engineers from India. I wonder if that stance will change with that category of jobs rapidly shrinking.
> The crux of the matter is that those workers won't be able to afford the iPhones they're assembling, however.
Of course they will, Americans banks and “tech” companies are always coming up with creative ways to extend shady lines of credit to the poorest Americans.
1. Low paid American workers glue iphones together in sweatshops
2. Low paid Chinese workers glue iphones together in sweatshops
3. Well paid American workers glue iphones together in sweatshops, and to make this possible we have a massive tariffs regime that makes consumer goods massively more expensive and massively increases the price of all manufactured goods.
Pick your poison. They call economics the "dismal science" for a reason.
Chinese workers are not "low paid" relative to prices of goods in China though. A Chinese worker gluing an iPhone together can afford a decent middle class lifestyle, the Chinese version of the "American dream".
What America really needs is massive deflation in the cost of everything, curbing income inequality (which is driving inflation) and moving to renewables (cost of oil/gas also drives inflation).
Deflation is never going to be allowed to happen even if economic conditions allow it. The reason that the Federal Reserve wants inflation at ~2% is so that nobody hoards cash in their home and instead spends it before it loses value or puts it in a bank to lend to the economy or invests it. Deflation would mean that you could hoard cash and it would grow in value, leading to less money available for economic growth.
>> Chinese workers are not "low paid" relative to prices of goods in China though. A Chinese worker gluing an iPhone together can afford a decent middle class lifestyle, the Chinese version of the "American dream
I'm pretty sure this is what Apple wants you to believe, while Chinese company offers minimal wage for workers who assemble phones. One could never afford a decent lifestyle on a minimal wage.
Yes, and a big part of the reason labor costs are so high is that living costs are high. The US worker is saturated with debt, fees, payments, rents of every stripe.
If the US minimum wage is what we have agreed is the minimum amount someone should be paid to have a reasonable quality of life (and it can be argued that it is still too low), then number 3 is the only ethical choice.
>and it really made a lot of this stuff click for me: they want to provide low-paying American jobs in American factories.
This isn't a fair characterization. The people on reddit who complain that the coffee place is only scheduling them for 10 hours a week and that people are being stingy with the tips might actually prefer the factory job with a regular 40 hours, occasionally mandatory overtime, and $5/hr more than what Starbucks offers. If you disagree, then I suspect that there's no universe possible where you're satisfied without the population of the United States being cut by three quarters.
the price of metal, raw metal, coming out of factories like aluminum, steel, titanium is high because the cost of energy is high.
I think it’s 30%-40% the cost of smelting it. Unless you can drop the price of energy and cheapen the raw material cost, the entire manufacturing industry will be uncompetitive.
Primary smelters currently run pretty efficiently but are bottlenecked by two main factors in the USA: raw energy prices and regulations. (there’s likely some modern process improvements they could add too but those won’t increase productively as greatly).
To reduce energy costs… you’ll need about double the current energy production we have today. That sounds like a lot but it’s very doable (the US has been neglecting itself for 50 years). It could with a little push from the Government catch up in 10-15 years, think lots of nuclear and solar.
Bringing energy costs down. I see. While I'm not super well-versed in the US energy market, and I understand it's a bit complex, I do believe it's a mix of regulated and deregulated private monopolies under a bunch of regional ISOs, but there's an energy trading market down there somewhere setting spot prices, correct? So are you saying the US energy market should be, if not fully re-regulated, regulated harder, or perhaps abolished and everything should be brought back to being state or federally run (I'm not sure the US ever had that)?
It is not always in energy producers' interest to have really low energy prices, after all.
There are still a few regions that are fully vertically integrated and fully regulated with no market prices. However, much of the US is under a regional ISO that sets hourly day ahead prices and 5-minute nodal spot prices. Under an ISO the utility still handles distribution and often transmission, but generation decisions (like when should I turn on my plant and what should my output be) are handled by the ISOs optimization auction based off various inputs from the generator such as costs and constraints.
In theory, this ISO setup has saved untold millions of dollars (probably billions), by operating the grid regionally in a much more efficient manner than in the days of old. It is hard to tell though as you can't do a direct comparison very easily. The economists certainly like the price signals though, but there are numerous issues.
I believe you have it right. In theory, power generation should have been a well-regulated monopoly. Unfortunately, as soon as you add investors, aka rent seekers, the system is pushed to increase profits at the expense of the customer.
We should reset the monopoly by publishing and documenting tariffs for power and carriage. Third-party power suppliers should still have access to the power grid, with complete, transparent, and understandable costs for consumers.
There needs to be a plan for continual upgrades and maintenance, rather than starving the grid and then requiring big bursts of funding that go in part to the rent seekers.
Snark aside, let me remind you of the term "enchitification": it came about because companies in theoretically competitive markets make good products shittier.
>The entire point of producing more energy is to consume it.
If the point of producing more energy is to produce more products, and instead it gets gobbled up by idiots giving us the next crappy phone app that runs in the cloud, then it's not me that's missing the point si it?
>All those computers in the data center are just as much products as anything else.
Sure, and if they were cranked out of American factories, that'd be awesome. But since they're shipped across the Pacific on a boat, they're not really the kind of products that help.
>If you don't like the apps, by all means don't buy them.
If apps are all we get out of doubling power production, then I'll do one better and we'll just not double power production.
> It's ok to double power production for things you want,
For things that strengthen our country's economy, and provides a future for Americans, sure.
For some internationally-owned corporate conglomerates to churn out more brainwashing software garbage, no, I don't think me or other voters should give any support for that.
Manufacturing means, realistically, bootstrapping the general purpose robots that will foment the “third Industrial Revolution”, which will revolutionize capital and make money largely irrelevant. Energy, materials, and automation are the only relevant factors for capital in the post-employment era.
Oh yeah, I also like post-scarcity SF like Iain M. Banks. Funny names for those ships, right? So we're betting everything on infusing humanoid robots with "AI" and abundance will automatically follow? I'm missing a lot of steps here inbetween. Will we live in harmony or will it be a massive scramble by the various nations to extract every single piece of natural resource by way of PvP? Oh right, the robots will fight. It'll be like that ancient robot-fighting show. We'll have that show too, but it'll be AI slop now, and it'll be entertainment for the robot warfighters while they charge their batteries.
Can't we just make the billionaires buy everyone a robot from China instead? Oh wait, their money will be useless in a post-scarcity society and they will just be like any regular Joe. Wait a minute. That seems like a massive conflict of interest. Hmmm.
> Can't we just make the billionaires buy everyone a robot from China instead? Oh wait, their money will be useless in a post-scarcity society and they will just be like any regular Joe. Wait a minute. That seems like a massive conflict of interest. Hmmm.
Dude it’s all good. Just snort another line and fall in the techno-delusion.
The counter point here is that the US and EU have benefited with a lot of economic growth in the past few decades. The fact that this growth effect has now run its course just means that things may need to change again and that old assumptions may need to re-evaluated. Which might include looking at strategies to re-shore.
Not because off shoring was a mistake 40-50 years ago; but because technology now enables automating a lot of the type of jobs that we off shored. I'm referring to robotics and and other innovations in manufacturing and assembly that reduces the amount of cheap labor needed and calls for higher skilled labor that the west can still provide.
The higher cost of skilled labor can be offset against the also substantial cost of shipping. A typical car from China costs between 1-2K $ to transport. And that's of course before tariffs. Also shipping is slow and building locally means faster delivery of custom orders, which is another thing enabled by modern manufacturing technology. There are many valid reasons to re-shore and re-thinking supply chains.
The Chinese are moving ahead applying the same kind of technologies in e.g. automotive than many other manufacturers with the exception of maybe relatively new companies like Tesla and Rivian that have embraced a software intensive approach to cars already. And that includes spinning up BYD plants on different continents. Compared to a BYD factory, GM and Ford look like they have a bit of catching up to do. Their lack of competitiveness on the international market has a lot to do with the fact that they failed to modernize their businesses. Also, they seem to be repeating their mistake of the nineteen eighties when the Japanese kicked their behinds with better cars and more modern manufacturing. Their reflex to blame the Japanese, Koreans, Chinese (or whomever) for their own failings is not a great one. It's going to yield the same result unless they change.
A bunch of assholes in offices (edit: and a handful of C-suite above them of course) got rich on RSUs at the expense of the entire rest of the economy. The factory shut down and all those workers are getting screwed driving for some gig service or order picking for ecommerce or whatever.
Number go up only matters if the number going up is strongly associated with things getting better.
And it didn't even necessarily get better for the asshole in the office. A few of them won but most of them can't afford to live within an hour of where he works, have a family, etc, etc.
The 2-3%/year economic growth that has been common since the 1980s. People getting rich is nothing new. You can go back 50 years, 100 years, 150 years, etc. and find the same kind of debates.
The difference is that people work less than ever and obesity is now a sign of poverty rather than wealth. Depression era US had people actually starving. The relative wealth of the middle class in the sixties and seventies is something you might rightfully mourn a little. But even then, there was a lot of poverty.
This is the "but iPhones and avocado toast" argument.
Calories and consumer goods are cheaper than ever. Housing, education and healthcare are more expensive than they've ever been. There has been a marked decrease in the amount of personal and economic autonomy available to the middle class and below over the past 40yr. Look at how medium skill level workers lived in the 1980s. It's basically a foreign country compared to today.
Having a robot vacuum to smear your dog's shit all around doesn't actually make you wealthier if you can't afford a house for the dog to shit in and apartments don't allow dogs.
What people want is a comfortable and fulfilling life, both of which are assessed on a relative basis. The modern economy has given them a rat race and shitty highs and they know it. Happy pills don't make depressed people happy. They just make them not depressed.
What people want never existed. You always find people that want more. But the same apartment that currently houses a couple of people used to house entire families. And it wouldn't have had a lot of the comforts people take for granted these days.
I don’t think Democrats are virulently anti Nuclear the way Trump hates wind farms. Unlike Trump, I don’t think they’ll just stop a popular project meant to provide power for a region.
And in any case 3 years might not finish projects but it might seed a lot of private investment and R&D
It's not a question of being anti-nuclear, is just that nobody is going to pay for it if there are cheaper sources of energy. The only thing that would keep it alive is if the government keeps intentionally killing solar and wind projects.
There is no such things as "democrats". There are individual politicians that usually group together. 30 years ago I would confidently say most democrats would be against nuclear, but the political winds have changed. I think the old ones would still be strongly against nuclear, but the younger ones don't care as much.
You cannot replicate the situation where the US was the workshop of the world at a time when other major industrial powers had been smashed by war...unless you try to smash them or encourage them to have a war....
Other countries develop and need less of the basic products that they can begin to make for themselves, they create trade blocs where they can begin to achieve scale greater than the US or they simply are bigger anyhow. If the US can substitute imports then so can they.
IMO the US has ridden the wave because that was the only sensible thing to do and it has stayed rich as a result. Adjustments may be needed - it's not safe to not be able to make fairly modern chips - but the whole world will get poorer if one splits it up and prevents scaling.
This doesn't make sense. Nvidia literally has offices all over the world including India (a country that gets the most flak for offshoring). So why now ? Suddenly, "offshoring bad" ? I don't buy it. I think it is more about AI data centers. I could be wrong.
Either political posturing, or he sees the United States beginning to rapidly accelerate ($$$) certain sectors or companies as part of a strategic development effort, much like China often does. Possibly a mix of both.
Every country, or coalition of countries, need to have public manufacturing run by their respective governments where their main purpose is to raise the bar on product quality, r&d, and employee care.
Let the private sector battle it out in their race to the bottom on everything, but ensure there is an ethical and trustworthy alternative to create the necessary competition in the marketplace to secure progress, both technological and social, over stagnation and eventual necrosis.
This is part of that "national security" we hear so many go on about when defending their policies of hate.
I do think that this is at the heart of the problem. The issue is not an overall lack of wealth, but how it is distributed. This is not going to change, no matter how many data centres or factories are built in the US. Ultimately, all the wealth will still end up in the hands of a select few.
Not to mention that we are already exceeding a number of planetary boundaries, which endanger humans. The ever-growing demand for natural resources and energy, which is directly coupled to GDP growth, is not likely to end well.
After spending quite a long time on this thread writing my thoughts etc, I feel like this is the most correct explaination of the situation
Distribution of wealth is the biggest issue and In my opinion, the most tangible way to solve things but then again, this is the core of the issue
Either you need a really anti corrupt body which can do their work and fight against such issues
But with causes like lobbying etc., those get washed up
Or we can have new people (like Zohran etc.) who try not to take lobbying money and then America can have new people who genuinely want to help and not be corrupt
But I am not sure what would happen, perhaps more people follow the example of zohran perhaps not. People are keeping an keen eye of the progress and what can happen. But one of the things which we saw was that although zohran won, I just didn't expect so much competition in the first place when Cuomo got around 40% I think?
it's wild because zohran's message was so well put out and received and this is the state then, I doubt that the voters might replicate it or not
It really depends ultimately on the voters. The truest form of responsibility but its also the lack of options and the two party system which is really bad in America ultimately causing the problems to exist even further.
> Either you need a really anti corrupt body which can do their work and fight against such issues
If changing the system is off the table, then this is what any solution would inevitably look like. I do not think the problem is a flaw in the system though. Calling it a systemic issue is misleading, because the system is largely functioning as designed. The logical response, therefore, is to change the system itself.
That idea sounds frightening, largely because most political parties treat the system as untouchable, presenting it as if there are no viable alternatives (thus convincing people that there are none, making them feel helpless). This creates a dead end: people experience the full force of the system's pressures while being told that nothing fundamental can be changed.
In that vacuum, scapegoating becomes an easy outlet. When the system itself cannot be questioned, frustration is redirected towards marginalised groups, under the implicit belief that punishing or excluding them will somehow relieve the pressure on everyone else, and that's how we ended up at this point (imho).
A system centered on people's needs would judge success by outcomes like health, stability, and quality of life rather than by growth metrics. If a policy reduces stress, improves wellbeing, and lowers long-term costs, it should be pursued even if it shrinks parts of the economy or even the economy overall. The fact that we currently treat any reduction in economic activity as a failure, regardless of human benefit, reveals how misaligned our priorities are.
I hope Zohran succeeds in improving people's lives, but I'm not holding my breath. I've been burned too many times before...
> But one of the things which we saw was that although zohran won, I just didn't expect so much competition in the first place when Cuomo got around 40% I think?
I think this primarily relates to how people are socialised. In Germany, we call this an 'elbow society', i.e. a society where people aggressively push their own interests and compete ruthlessly, showing little regard for cooperation, solidarity or fairness. People feel so lost in the world that they are losing their humanity, only looking out for what maximises their own outcomes. I believe this can be changed, but it will require a large-scale cultural shift driven by society, education, the media, and so on - the same institutions that pushed us in the other direction in the first place.
I Agree with your comment but one of the idea that terrifies me is not that change is impossible but rather change requires the whole world to do something about it and I am not that optimistic about it simply because of what you call about "elbow society"
> I think this primarily relates to how people are socialised. In Germany, we call this an 'elbow society', i.e. a society where people aggressively push their own interests and compete ruthlessly, showing little regard for cooperation, solidarity or fairness. People feel so lost in the world that they are losing their humanity, only looking out for what maximises their own outcomes. I believe this can be changed, but it will require a large-scale cultural shift driven by society, education, the media, and so on - the same institutions that pushed us in the other direction in the first place.
I so so agree with this statement, this is probably what I thought as well but one of the most terrifying things about this is that its sort of like a chicken and egg problem because the media,education and so much more are so influenced by policies/directly by the govt and the elites that I would doubt that making such change or giving people the idea that "change is possible" is itself possible
But there have been instances in the past where we pulled out of things but I am not sure how we can do it right now.
A large-scale cultural shift.
> the same institutions that pushed us in the other direction in the first place
So the thing which worries is me that I don't see a reason why these institutions would change? Do you see something in this perhaps?
I think that the best way is probably via at a small scale level and then having that grow up. Adopting it ourselves and discussing about it like we are doing right now is the only thing possible that we can do
My issue with this is that the incentives just aren't there for something like this. Let's say I want to create a social company and I just want "enough" and afterwards I'd just do it for helping etc. and getting miniscule gains because I think that the goal of money and only money itself is very dim
Even if we do something like this, the incentives really change because companies wont invest, you wont get funding etc.
So in a way, I think that the best way is probably getting attention of like minded people and having them invest with such knowledge but we really haven't seen such platforms. I think Kickstarters are a good idea for small scale projects but even they feel like you still have to get yourself a promotion or attention itself to fund it and it just becomes really 10x harder imo
I feel like microgrants are genuinely the best way moving forward. If people can provide 1-10k$/perhaps 50k? for an idea with intentions of good once it scales. To me it feels like the best way and I found ways to look at microgrants and they exist but I dont see many of them in much action either.
We really need to change incentives where doing good is favoured more than doing bad, We can even start small because sometimes even small good incentives are all one needs for real change.
I wish there was more interest in microgrants, I must admit that I had thought about working in this space or similar and perhaps I will jump back to it someday but what are your thoughts on it? Do you know of some mechanisms where good incentives can be generated at a societal rate?
The distribution is a problem, but not for the reasons people think. At these amounts (billions) the money stops being human-scale and starts to become civilization scale. You can accomplish big things with 150 billion. Things like: installing a gigawatt of solar, building a 1000km HVDC line, etc.
The issue is that when that 150 billion is concentrated into one person's hands, it tends to be inefficiently allocated. This is the argument against central planning; it's inefficient, it does not actually go where it would maximally benefit society.
We have, with the amount of wealth inequality, essentially re-invented central planning. It's arguably worse today, because rather than giving central control to a worker's council which is nominally accountable to regular people, we've given it to Larry Ellison who is going to build yet another datacenter for AI, instead of spending it on energy or manufacturing capacity.
My home electricity bill has doubled since AI came out. That is my evidence that this concentration of wealth is egregiously misallocating capital. It is a civilization-scale self-own. Countries that allocate capital properly will wipe the floor and we are beginning to see that play out.
Yep. The structural incentives for the bosses don't change when their employees are assembling cars or treating patients or serving coffee or writing code. Power is tipped towards capital and against labor. The owners extract wealth, which tips the scales further. Labor organizing has been kneecapped in this country and it will only get worse (there is an ongoing case trying to get basically the entire NLRB declared unconstitutional).
To who? There are ~300 million people in the United States. He could give each one a $500 check (assuming he didn't want to keep any of his $150bn). Or should he give it to the U.S. treasury? It's $38 trillion in debt, so he could give up all of his money to pay off 0.004% of it.
There are three things that I think go underrated about America's manufacturing problems:
1. A lot of industries offshored simply because the owners of the facilities just sold and shipped off rare/expensive/important equipment to other countries without a second thought. Especially tool and die equipment. So a lot of industries in countries like Korea and China or India literally use the exact same equipment we used 80+ years ago. Even if we wanted these jobs back, the countries & businesses in question are too smart to ever sell the equipment back at nearly any price (why we can't manufacture them again is a whole other problem).
2. As Jensen alludes here, the cost of energy in the US dropped through the 60s but then flatlined. We became too dependent on fossil fuel and "comfortable enough" consumer prices. But the energy intensive heavy industry all moved to places with nuclear power or heavily subsidized power sectors.
3. The lack of any sort of public welfare solution is a distinctly American industrial policy failure. Manufacturing depends on labor force flexibility - both in finding the right people for jobs, as well as just dealing with stop-and-go or seasonal work. But Americans having their healthcare and retirement tied to their jobs and full employment is a huge boat anchor on both the workforce and industry.
As long as you have power structures in place in society where labor is weak and capital class is strong the capital class is going to use all their wealth and power to extract everything they can from the rest of the society.
Regardless of whether you bring or do not bring manufacturing back you also have to fix these socioeconomic issues before all can prosper.
Do we (or someone better informed) understand the impact of re-shoring ?
In my mind, the reason (or the original intent) for off-shoring was to reduce costs to be able to sell more X (because cheaper is easier to sell) and selling more X means more profit and better market capitalisation (if the company selling X was public)
If re-shoring is adopted, my assumption/understanding is that X will retail at a higher price. Oversimplification maybe, but higher retail price means lower sales means lower profit (means lower stock price if the company selling X was public)
The solution to that would be higher/more automation i.e. less (or minimal) manufacturing related jobs I think ?
And now the situation would be that while there was capital-return-to-shore happening but went into automation and the jobs recovery was not what someone would have expected (both in terms of scale and skill)
But because the jobs were virtually re-shored the off shore labour market now suffers ?
What’s missing from these conversations are the cost of living.
We’ve financialized the housing market, meaning the very basic needs of shelter now rises in price in accordance to the market. If tech workers make 2x or 3x the median annual salary, it makes housing prices rise for everybody else in the city.
In order to pay a “living wage” employers have to pay enough for their workers to make rent and groceries. In america, one of the highest GDP per capita in the world, the “living wage” is somewhere between 3x to 10x the offshore salary.
If you could house millions of people at the bare minimum cost, if you could provide them food and healthcare at prices that aren’t inflated, then the living wage doesn’t need to be so high.
We talk a lot about raising the minimum wage. What about lowering the minimum costs? That would mean a less stressful life for workers and cheaper labor for employers.
The financialized housing market is only a symptom of the over-regulation (through zoning and permitting) of housing, construction, and real estate in general. This over-regulation is itself a microcosm of the petrification of the majority of the economy.
Whilst this is true, there is some distortion to that statement with measuring by value. If I produce a screw for the US military (a scenario where supply chains are highly regulated and thus may be unable to buy cheap from a foreign country) and sell it for $1, I have produced a dollar of manufacturing by value, but If I produce exactly the same product in China for $0.1, I've only made 10 cents by value, despite the fact I have made exactly the same product.
There is a reason why for instance ships and raw materials output is measured in tonnage, since that is the actual thing produced, the value is secondary to that. That is you would want to measure the actual amount of goods produced rather than what they sold for, obviously only amongst comparable categories.
Also US unemployment has been low. The idea that Americans need more jobs just doesn't fit the numbers. There are plenty of good paying non-backbreaking jobs for Americans but they just don't seem to believe it.
you can get a job as a long haul truck driver in texas with no education and paid for training paying 80-100k and live in an area where houses cost 300k, within 5 years starting from zero with no education you can own a home and have a nest egg big enough to become an owner operator or invest in a small business.
so thats the floor for anyone willing to put in a few years of work.
Also, US manufacturing already struggles to find workers.
The problem, though, is that 70% of US manufacturing happens in small town/rural areas, which is not where the people looking for jobs are found, so you get this curious disconnect.
This is self serving nonsense. “ai infrastructure” here isn’t manufacturing its enormous data centers that have so few humans the lights are off in every area other than where physical maintenance is happening. It’s about building enormous caverns that consume enormous amounts of power and warehouse the products his company manufactures offshore. The only thing he wants to onshore is spending on those offshore made products he sells. There’s no meaningful jobs in “AI infra” that outlive for the original data center build. He’s advocating for huge investment in energy production to ensure there’s capacity to run his products he’s selling that his company produces off shore.
Andrew Grove, in his later years, held the same view. He explained essentially everything we had seen till then and since: the decline of US semiconductor manufacturing, the loss of talent, critical dependence on foreign nations and companies, etc.
It turns out you can't cherry pick the intellectual work and fob the rest off on foreign supply and still maintain global leadership and domestic prosperity. The whole stack must be at least competitive domestically. Only trade policy can achieve this.
Could a company other than Taiwan Semiconductor Manufacturing Company manufacture the chips that Nvidia products are made of, and could that happen in America? The answer is yes to both. But if Nvidia attempted it today, it would be doomed. Jensen knows that sometimes it's more convenient to be Jen-Hsun.
This ship has sailed. Economy will not revert back to what it was with wishful thinking. Especially offshoring jobs is the utmost goal of every CEO, even if the wage is one dollar less. This benefits himself and his customers giving no f... for the unemployed.
China is living its 1990's this decade: the boom is starting to wear off. Next comes India which is living its 50's. Next will come Nigeria which is in it's 20's. Offshoring jobs will continue until the end of modern civilisation.
If maximizing profits is the primary thing that matters (and in the US, amongst other places, it is) then nothing will change about this. It's also why unions are so opposed by certain groups and it's why we have such an obscene wealth imbalance. Shareholders and profits matter more than people.
Martin Luther King Jr. expressed it well when he said, "when machines and computers, profit motives and property rights, are considered more important than people, the giant triplets of racism, extreme materialism and militarism are incapable of being conquered,"
I think people are ignoring the reciprocity in the global trading system.
People and news articles always talk about goods trade deficits for rich countries, but never their almost universal services trade surpluses, and the profit margins are vastly different.
For manufacturing, a large part of the revenue goes to materials costs, but for services, almost all of it are net incomes.
Yes you can bring back manufacturing jobs, but your services surpluses would also shrink, because when you don't open your market, countries were not obligated to let you reap profits there too.
There’s a huge downside to manufacturing and that is pollution.
IMO, I’d rather china be the economic super power and the US leeching off that technological progress and manufacturing the same way say Scandinavia or most of Europe currently does.
Those Europeans get 2 months off while china and the US duke it out and they get all the technological benefits with no downsides. It’s genius.
Everyone talks about the US being number one, but no one wants to put in the effort. You all want to sacrifice work life balance and give up those remote jobs to push the US back to the top? Thats what it takes.
The problem is that nothing really stops people from going up the ladder. You mention leeching off technological progress but the reason some are concerned is because they will simply conquer the whole supply chain.
Take an example of tesla vs byd. Heck, The electric MI car I saw looked so good and nice, its wild
Most of the money I feel like America's still has lots of influence is probably from well established tech corporations or similar but even those get challenged by leaner companies but also that all of them have bought into the hype of AI
America's economy is on such a weak line in my opinion because the only thing which stops all hell from breaking loose is that stocks are doing good just because of the AI bubble.
When the AI bubble bursts, I have a predication that all hell might loose free (I sincerely hope that I am not right though)
Ironic that the thing which would in the end hurt america is the company selling hype who is trying to doublespeak itself into showing something but being completely different when you realize the downstream effects of the AI bubble crashing
Yeah I’m saying drop the concern for another country conquering the supply chain. Let China dominate.
Europe is unconcerned. And they benefit from that. I mean real benefits like work life balance not benefits like talking points about which country has the bigger dick.
Do you really want America to be number 1 while you’re slaving away at your job 996 in pollution infested cities?
I agree with what you are saying about Europe being better in work life balances etc. in my person opinion as well and I admit it so I am just going to write a message about the things I have been seen written by Americans in the first place/gist of them for the sake of providing a (full picture?)
I wouldn't say Europe is unconcerned either. Europe has less issues than America because its collective debt feels very low compared to America
France recently went into all out stalemate of sorts and in countries like UK as well there are some really systemetic issues and not vice versa
Namely the most heard is the lack of innovation. People (here on HN) have compared Europe to a colloseum, saying its stuck in time and that there is a lack of innovation.
The startup culture is disfragmented etc.
There are some real concerns about Europe as well being impacted because a huge chunk of jobs were in the manufacturing business (think cars) and with things like BYD etc., Europeans themselves are worried about being able to compete with their price.
the point being that Europe has some concerns as well and they stem from their decision. The regulations make businesses genuinely hard to start.
(Note that I still believe that Europe is really good compared to America in a lot of genuine metrics in my opinion as well but then again, its not really a fair discussion if we don't discuss both sides of the coin)
1. Offshore jobs, maximize profits and take advantage of incentives to offshore.
2. Political winds shift.
3. Talk a good game about needing to onshore, make some token moves to move a small token amount of manufacturing back to the US. (You are here).
4. Once the admin changes and/or mid terms, continue to spend more on offshoring.
> In a recent speech, Nvidia CEO Jensen Huang outlined his plan for bringing manufacturing jobs back to America: force companies to build AI infrastructure in America.
Not self-serving at all.
> Since founding Nvidia in 1993, he has overseen its transformation into a central supplier of computing platforms for AI, data centers, and high-performance systems. That position provides direct exposure to the industrial requirements behind digital innovation, including power generation, fabrication capacity, and workforce availability. From this vantage point, energy is the basis of the economy from which everything is built.
This reads just like AI slop: I am applying for a government advisor position. Can you please write me a short paragraph linking the work experience listed in my resume with the position?
That's all well and good, but he is literally at this moment attempting to export industrial capacity to China at a direct tradeoff to it's availability to the US, even when he could sell it at the same price.
Please let me put a data center in your back yard. Please just one more I promise the chat bots will help you email faster please bro AGI is just around the corner I promise it wont be an exponential multiplier on wealth concentration.
In quite a few places in the rural US (especially the mountain west), people are asking for that. Those companies usually build out a lot of needed infrastructue (power, water, even roads) as part of the deal, and it provides job opportunities (a ton up front, and some (though fewer than many people realize[1]) in perpetuity).
50-100 jobs long term for a town, for noise and environmental effects in perpetuity, plus tax cuts as incentive from the locale to hire a handful of mechanical/handyman type jobs. Likely the skilled labor will be imported.
Makes sense. There is no real functional difference though between offshoring a job, or importing cheap (H1B or other) labour to do it in the home country.
My grandfather worked in the aleganey forge running the tempering ovens for very large metal forgings.
Raised a family,4 kids, kept the farm, retired and lived 30years more, and there was some money left for everybody.
He bemoned the selling off?, out, of american manufacturing that began in the 1970's.
He was the kind of american who was comfortably unaware of the rest of the world, perhaps ever so slightly embarassed by his unworldlyness, only having a high school educatiin, but also completly untroubled by anything, anywhere, ever bieng a real concern.He had worked on the 16" guns
that are still to be seen on the decks of WWII battleships.
But instead of an enduring world peace and prosperity he got to see the errosion of the american dream, and the desruction of americas strength from within.
As a further illustration, granpa and grandma, used to go visit "uncle kieth"in
NYC, St.marks place, 6th st, between 2nd and 3rd ave, manhatten, in the 70's ,80's and early 90's, stayed in the truck camper, parked on the street,an unspoken,unwritten imunity convieghed by that little bit of mud in the fender wells.
People love the abundance of cheap affordable stuff more than they love their neighbors having work.
It's also a positive feedback loop, where the less money people have from a lack of good jobs, the more they will choose cheap foreign goods to buy. Never mind that if you are in an economically productive sector, this whole cheap shit bonanza is just pure upside for you (with a touch of dissonance to maintain moral purity, of course).
Bringing jobs "back" probably isn't going to do much. We need a cultural shift away from Temu, Shine, Amazon, Walmart, Dollar General and towards spending more money for less goods.
Which is going to be about as popular as proposing we go back to land lines.
"Corporate welfare recipients that got free money to build data centers, testing the water on asking for more free money to hire employees."
The cycle repeats: send jobs somewhere else, hold those jobs hostage until the government pays you to bring them home. It will take the form of tax holiday on bringing foreign cash home, etc.
Data centers provide jobs. Not as many as manufacturing, but the difference isn't as large as you would guess. A modern data center needs 50-100 people to repair/replace hardware, maintain the generators and such. A modern factory needs 200-500 people to do the assembly, shipping, and other such work that isn't automated.
Of course if labor is cheap you can use a non-automated factory and then you will have 2000-10000 people needed. However those are not coming back to the US (or Europe).
Is that comparison similar square footage? I know of factories that have 10 employees and are small machine shops, and factories that have a few thousand employees (even ones that are highly automated). The difference is scale.
I’m not sure square footage is what matters here, though comparing the overall market for datacenter/manufacturing jobs would be more useful than individual installations anyway. It’s not like the U.S. is hurting for physical space in which to put factories or data centers. Speed of light isn’t that slow — the big New York IXP is actually in New Jersey and it would be fine even if it was further away.
Yes, but I'm comparing a specific factory with a specific data center that I happen to know enough about to compare. There are larger factories that have more people.
The factory I'm thinking of had 2000 people in 1950, and around 250 today - while producing the same amount of product. Automation is continuing to come to that factory - there are number of things that could be automated but their volumes are not quite high enough today to justify the upfront costs.
One CNC laser cutter replaces the 40 humans in a factory. I don't know how many people the automated paint system replaced... factories are not near as labor dense these days as you would guess.
same reason why america has been protecting their oil with wars.
energy is the basis for everything. cheap energy is what you want. cheaper than the next guy. it doesnt matter if its for AI, transport, refining goods, etc. its the same problem.
I used to agree with this (at least the headline), but then I lived through the Biden administration.
Fundamentally Americans want to consume more services and especially goods than the people living in America produce. The only ways to square that circle are
1. To get more people. But by 2024 prime age labor force participation was at essentially record numbers[0] so there aren't more people available domestically, and we saw in the election that swing voters are not fans of mass unskilled immigration.
2. To produce more with the same people (i.e. increase productivity). But in most cases this is up to technological advancement and not in the hands of policymakers. There are probably some sectors that could benefit from deregulation (e.g. construction) but those regulations have their own constituencies that don't want to see them go.
3. To force people to consume less (i.e. inflation). Voters hate this.
4. To import more from abroad.
In the end "offshoring" is the only politically viable option.
>3. To force people to consume less (i.e. inflation). Voters hate this.
Inflation from immigration/offshoring restrictions is not evenly distributed. It's essentially a purchasing power transfer from everyone else to low-skilled workers (who no longer face competition from cheaper overseas labor, so have more bargaining power and hence can demand higher wages from society).
So fucking just go ahead and make your own foundry then, go ahead and make an EUV machine instead of buying one from ASML, get slave wage Americans to assemble chips and boards, better ban foreign developers abroad and domestically because they might send those pennies you give them back home.
Traditionally, economy are typically divided into three sectors: Agriculture, industry, and services. Service industry contains everything from nursing to software development and sales. The problem with this division is that there is an extreme productivity gap within work in the service industry. A software developer's work can serve 100 million people at a time, when a nurse can only serve one customer at one specific time.
The reason why highly developed economies have become so service driven is because they have become sort of bimodal: The cost of labor is such that only jobs that are productive enough (profitability per hour) are done in these countries, and jobs that absolutely have to be done there to sustain the population. Jobs in the middle, everything that is not highly profitable or location-dependent, is offshored to lower-cost countries due to the cost of labor. This results in these developed countries having issues: Cost of living is high due to labor cost and there's high economic inequality due to wildly differing productivity.
The solution would be to bring these "mid-productivity" jobs back to developed countries. However, the main roadblocks still remain: The cost of labor is too expensive for most of these jobs to be competitive globally. However, I think there might be a way to do this in the near future: Advancements in robotics would mean a higher level of automation for industrial work, meaning more industrial jobs would become viable in high-cost countries. Each worker would be productive enough that the cost of labor is not critical anymore.
To make this happen, I believe it's important to ensure that the country is viable for this kind of manufacturing: Energy supply needs to be abundant and cheap, workforce needs to be educated, outside the "elite" students, and there needs to be low trade barriers. Low trade barriers are needed, because virtually all manufacturing is part of a global supply chain where parts cross many borders before the product is sold (and (high-value) products are sold globally). Additionally, the viability of automation will vary between different parts of the supply chain, and so you likely cannot automate everything.
Hmm
Could Jensen's statement be motivated that by forcing companies to build AI infrastructure would ensure more of his Nvidia AI chips to be sold? I keep seeing him say things that makes him appear bias towards more sales. Like dismissing any possibility that an AI bubble is growing. To admit the possibility may hurt sales.
Sadly, even the offshoring centers are losing to automation. I’ve personally seen even modest tools automate away 10s of jobs in a factory in the 2010s in India. Cutting, Punching, bending and moving metal sheets just done by 1 machine.
Today We have lights out manufacturing.
One thing I would highlight, is that the issue with offshoring wasn’t the loss of jobs as much as it was underemployment.
Going from factory foreman to burger flipper is what hollowed out that class of workers.
The Root cause failure for the offshoring model for the offshoring nation is retraining difficulty.
If people could be magically retrained into new roles, then offshoring would always work.
Outsourcing manufacturing was very short-sighted in light of the automation which was taking place and accelerating.
No doubt this short-sightedness was the result of our debt-based monetary system. The disconnection of money from long term value-creation created a cycle of speculative booms and busts which made short term bets the most viable strategy to ensure that execs would get their bonuses.
Also, the perverse legal concepts of 'corporate personhood' and 'limited liability' sealed our fate, ensuring that companies could pollute our land and water with chemicals... China was all too happy to send children's toys full of phthalates and other endocrine disruptors our way, ensuring that the next generation would be pacified and struggling with hormone-related issues (I leave you to infer cultural implications...)
Seems like China got their revenge for the Opium wars!
Easiest way to do it is to financially and legally cut off all avenues to offshore and outsource.
Then make it litigative open season for any affected or displaced person to court mandate a near-blank check to make up for the generational contempt of US citizens.
You exploited underpaid labor or the globe for the benefit of yourself and American customer. Minority of Americans are workers, but all are customers. You did well.
From reading the article and having listened/read a lot from Jensen and his ilk, I feel pretty comfortable saying the "we" is referring to the system we have built in the US. Basically the era of free trade. He and Trump and that group generally think we made a mistake by allowing free trade, and the solution is to "force" that away with a mix of taxes (tariffs), laws, incentives (subsidies/grants/etc) and others.
This is a summary FTA, not a direct quote from Jensen, but it's a pretty good one IMHO:
> In a recent speech, Nvidia CEO Jensen Huang outlined his plan for bringing manufacturing jobs back to America: force companies to build AI infrastructure in America.
For sure, it's quite possible he doesn't really believe this stuff but is evangelizing it because of the benefits of being in good with this administration. It's sad but important to keep in mind as a possibility
Sure, like the dot com bubble it will burst. But like the internet, AI is here to stay. The real bottleneck is electricity supply. CEO of Microsoft has even said, we have the chips but not the electricity to power them. The chips are sitting idle.
I’ve noticed again and again what’s missing from the often repeated by media blame game of “they’re taking our jobs” is the fact that it was US corporations purposefully offshoring in the name of maximising profits at the expense of paying US wages locally, rather than countries “stealing” the jobs ffs! It’s. Pure. Xenophobic. Deflection. FFS!
“They’re stealing our jobs!”. No… corporate America applied the Ferengi Rules of Aquisition #6 to whole industries for a quick buck.
Onshoring manufacturing and bringing back the US manufacturing base is a critical issue. This is from a social and security pov. Having millions of young men wallowing around playing video games and drugs all day and not working, raising families, is disgusting and a sign of collapse. We need manufacturing back in a big way, unfortunately I don't think that Trump, despite also thinking that, has the vision or ability to make it happen.
The $US as world's reserve currency played a big part in why manufacturing was offshored. As manufacturing processes mature they move to the periphery. Because of the reserve currency status of the $US, this periphery meant outside the United States.
The periphery got the jobs and the US Elite got the $$$'s. What should've happened though was the Elites should've invested their cash into in technologies. Sure they did to some extent (NVIDIA is an example) but mostly what they did was pile their money into fixed assets, hence the inflation (e.g. housing) we have today.
The Blame lies with the Investment class elites, the Bankers, and the Donor Controlled politicians. Washington D.C. (Donor Controlled).
Similar things can be said about LLMs replacing jobs. I'm all for governments regulating such changes, but at best they can only slow things down.
But that said, there is a balance to be had. Ultimately, quality of goods and services, and the competitiveness of the country as a whole must take priority. Not jobs. The whole idea of creating jobs for the sake of creating jobs is perverse. It doesn't help anyone and harms the public in the long term. If we want a way to give people income, UBI or similar welfare-like approaches make sense. They might even be more profitable in the long-run.
With offshoring, has the quality of software gone up or down? If it has gone down, then these companies are harming the country. If they can improve quality by offshoring, then so be it. That only means whatever we're doing isn't working in terms of generating quality software, and we need to fix that. But I think it is a bit more nuanced, offshoring to certain countries tends to have higher quality than others, so that should be taken into account.
My wish is that we all (not just the US) go back to the 50's and 60's space-race era mindset of competitive innovation. I think (and I hope it isn't too controversial to say) that culturally we've been abandoning nationalism and nationalistic-pride, these were the drivers back then. Whether it was Nazi germans, USSR scientists, NASA scientists, bell labs,etc.. there was a strong sense of country/nation and that our work was contributing to that, that something we're building as a collective that will be our legacy to be passed on to the next generation.
The offshoring and general enshittification culture today is not that. It's Reaganism turned pandemic. The only thing that matters it the thickness of the shareholder's wallet. What I expect from governments is to take a bi-partisan approach to this, we need some sort of nationalistic pride to get us back on track. With EU for example, I can see a sense of European identity and choesion being formed now that the US is turning more and more hostile towards the EU. In the cold-war era, we had russia to unite us. Now, we're more concerned about other americans in the US than we are about China or Russia, our sense of partisan/sub-culture identity is much stronger than the national identity, there is no expectation or pressure from the government or the public for companies to work in the best interests of the country. At best we expect them to be proxies for welfare programs.
In other words, whether it is LLMs or offshoring, we should expect them to not do that because the alternative is better. The educated workforce in the US is not looking good,it's pretty dismal. Even the population attending college has gone down dramatically. Companies like TSMC struggle big time when trying to open plants in the US because there is no talent here. From what I hear from teachers all over, the post-covid situation is very scary, it is perhaps more concerning than anything else for the future sustainability of the US as a country.
I agree that we've done a great disservice to the country by offshoring, but only in part, only in cases where the quality of the work was poor. For example,I reckon (and i could be wrong) there are more developers and with better talent per-capita (not by volume) in certain western-european countries than the US. Even in India, for a long time there was this bias that outsourced talent there is of lesser quality, but over the decades I thing things have improved - but you do get what you pay for. My point is, coupled with this sentiment should be how we've also done a great disservice to the country by screwing up education, government and a several other things. It isn't just offshoring, there is a more fundamental mindset that is corrosive and must be addressed.
STFU Jensen, why don't you stop making circular deals and build a Fab with the 5 trillion dollars that you have - rather than having TSMC and Samsung make them?
There are so many underlying changes to the established relationship between Labor and Capital in the US that would be a necessary part of keeping jobs here that it would effectively make us a completely different country.
For example -- suppose one could snap one's fingers and "bring back" millions of manufacturing jobs. What would lead one to conclude those would be the kind of "good jobs" everyone is envisioning? Historically, they were better jobs due to a strong labor movement, but that movement has been largely destroyed.
Similarly, if we want widespread prosperity, there is no reason service jobs should not be "good jobs." There is no economic rule that says that riveting should pay more than taking care of the elderly or food delivery.
We have jobs, we have just decided that the people working those jobs are not deserving of prosperity. If we re-shore jobs, what would make anyone think we would treat those jobs differently?
> There is no economic rule that says that riveting should pay more than taking care of the elderly or food delivery.
There is, in fact. Baumol's Cost Disease, and it's a real bitch.
Manufacturing has compounding productivity gains - one worker today produces vastly more than one worker in 1950. Elderly care doesn't. You can't make a caregiver 10x more productive through better tooling. The productivity ceiling is fixed by the nature of the work.
Wages across sectors compete for workers. So service-sector wages only rise when they have to bid workers away from high-productivity sectors. This predicts: service wages are borrowed from productivity gains elsewhere in the economy.
This doesn't mean we shouldn't want caregivers paid well. It means wanting isn't a mechanism. The mechanism is productivity growth in tradeable sectors pulling wages up economy-wide.
> It means wanting isn't a mechanism.
Well we still have demand in the equation. If demand for service workers grows, so will their compensation. (And so will the cost for those services.) So the possibility is there.
People with more disposable income (the high-productivity ones I guess) demand more services. The question will be whether that demand will grow sufficiently to raise the compensation to where we want it to be.
What I also don't know is how we will respond to service jobs being automated. "Premium" service usually shuns automation. Will we have fewer fast food workers and more massage therapists?
And then you get to the reason why everyone complains childcare is expensive.
I thought about addressing this in the original post, but I want to address part of your response:
> one worker today produces vastly more than one worker in 1950. Elderly care doesn't
Indeed, this is a core component of Capital vs Labor issue I mentioned. Productivity increases, workers generate more value, but Capital's share of the results increases nonetheless. The change in this relationship is why I would expect a reinvigorated manufacturing sector to be dominated by Bad Jobs instead of the Good Jobs everybody hopes for.
(There's also a measurement issue in comparing those two. The benefits of e.g. caregiving are measured by the ability of other workers to be productive. For ex if a high-wage worker has to stay home to care for someone, then they are not doing high-wage work, which reduces the overall GDP potential of the country.)
What you’re overlooking is that productivity doesn’t increase uniformly. The low paying service sector jobs aren’t any more productive today than they were 50 years ago.
You're overlooking the main thrust of what I am saying from my top comment to the one you replied to, which is the relationship between Labor and Capital:
> Productivity increases, workers generate more value, but Capital's share of the results increases nonetheless.
To your point, this is even more true for the jobs where productivity has increased the most. Agriculture is vastly more productive today, and the share of profit captured by Capital increases every year. The main point is that productivity gains do not really matter to Labor because the benefits of those gains rarely accrue to Labor.
Put another way: there was a value capture split operant in 1950s manufacturing that contributed to factory jobs being Good Jobs. That split hasn't been operative for decades. In all likelihood, re-shoring factory jobs today would just create crappy sweatshop jobs.
Thank you, I learnt a new term today.
Manufacturing jobs bring the entire supply chain of the manufacturer with them.
The area where I live, Greenville, SC used to be the textile capital of the world and then became essentially destitute when the entire industry offshored.
BMW and Michelin locating their US HQ here essentially rebuilt this entire corner of the state with jobs and associated supply chains. Now, Greenville is booming with a more diverse economy but all that manufacturing is the root system of prosperity here.
> Manufacturing jobs bring the entire supply chain of the manufacturer with them.
Not really... Manufacturing today is a global process and the entire supply chain is usually spread around the world.
One example for a cotton shirt (https://apps.npr.org/tshirt/): the cotton is grown in Mississippi. It's then shipped to Indonesia to spin the cotton into yarn. The yarn is shipped to Bangladesh for rough cut and sewing. The shirt is shipped to Colombia for final assembly. And finally it's shipped to the USA for purchase. Move any one of those steps to the USA, and the other steps may still be located elsewhere.
Same is true of other items, like cars. Ford may "manufacture" in the US, but the parts and tooling are sourced from elsewhere. It can't manufacture the chips here, because the tooling and process are exclusive to Taiwan. Even if you bought the plant and moved it here, the making of the tools and the processes are still specific to Taiwan. And some steps may be impossible to "bring home", either because some other country has all the raw materials, or all the expertise, or local laws prohibit some part of the process being done here.
For return to happen you need to have a creative economy, not an extractive economy.
Offshoring happened for the simple, dumb reason that it's cheaper and more profitable.
For all the rarara about "America", shareholder patriotism extends exactly as far as quarterly returns. If that means selling out ordinary US workers - do it. Give me the bag.
What offshoring revealed is that the US is not a culturally integrated country. The culture of the top 5% or so considers itself completely separate to the rest.
It's a political fault line that was always latent, was somewhat suppressed from the New Deal to Carter, and then came roaring back with Reagan.
Now it's operating at pathological, self-harming levels. The marrow of the country has been chewed out, and a few dysfunctional shell oligopolies, propped up by a bubble, are keeping the lie spinning.
There won't be any significant reshoring until there's a cultural change. Reshoring is just too expensive for the owner class to do more than tinker with it. Without a cultural change the owner class doesn't care enough to change that.
Offshoring happened because people dont want to buy goods that cost 3x as much just because they were made in the US. If a clothing company tries manufacturing domestically no one will buy their clothes unless theyre already an expensive brand.
Partially true, but it also happened because companies wanted to reduce cost and logistics are cheap. Sometimes this was a necessity to stay competitive. You either prohibit some trade with taxes or it is a race to the bottom to concentrate all production into countries with the lowest possible wages.
Ecological factors from logistics are missed technological development opportunity from not having local production are not factored in here as well.
I think if the wealth class wants to avoid communism and heads on pikes in the longer run, they should absolutely start to be more concerned with community and move beyond the tunnel blinders of the next quarter over long term stability.
This goes for govt doing anything but working to ensure domestic production and dual/multi sourcing of essential infrastructure.
Unfortunately that's a wall street problem. I don't think wall street can be fixed, at least I don't have any clue on how it's possible to fix it outside of destroying it.
As long as the ownership class can continue tricking half the population into directing their lust for violence towards scapegoats like illegal immigrants, there's very little reason for them to change course. The remaining half of the population then gets most of their energy used up defending against "culture war" bullshit, with many even going on the aggressive there because it's one of the few types of allowable wins in the very narrow Overton window.
Illegal immigration isn't just a scapegoat... it's a large impact on social welfare spending, infrastructure costs and housing availability. Especially when considering an increase of over 5% of the population in under 5 years without an accompanying growth in production and wealth generation in general relative to inflation.
There are limits on migration for a reason... that doesn't even consider the impacts on the larger society by weakening social cohesion.
Even then, there's plenty of indication of movement from those who want a Communist society... you only need to look at the NYC election, and the Venezuela protests to see that. Without a longer term consideration for society as part of where business/corporations operate, you will only see more drift in that direction.
Sure, it's not just a scapegoat. I'm actually pretty ambivalent about the immigration issue itself [0]. But it is still a scapegoat - the people who were violently angry about economic disenfranchisement (due to overfinancialization and massively monetary inflation) are currently all-in on cheering for the New York financial con artist for performatively going after those scapegoats while making the real problems worse, right? That right there is the pressure valve popping off, and even if the tribal buntings change and those people go back to seeing the system as their enemy in ten years, history shows they will just get hoodwinked again.
If this tiny movement towards "communism" amounts to anything of note in 20 years, I will be surprised. The pattern I've seen is that even if the current push is headed by idealistic leaders who don't give in to self-interested expedience (ie corruption), the next crop won't be. And the corporatist structure has been very good at neutralizing any real reforms, especially in the US.
[0] given equity with things like people who have been here for quite some time - those are undocumented Americans. For comparison, adverse possession, by which you can gain exclusive title to a piece of real estate by breaking the law usually only requires a few decades
You’re cherry-picking examples. Manufacturers can and do relocate the entire chain (or a super majority of it). I live outside of Greenville, SC also (previously Charleston) and when Boeing or BMW or Mercedes or Volvo bring a product out here they also bring hundreds of small time suppliers with them. Maybe the cotton for the cloth seats still come from Egypt but this is immaterial to the overall operation and the jobs it brings to a community.
They didn't have those steps outside the USA in 1960, yet people wore shirts. Those steps can come back.
For cars I found it interesting that my water pump on my Dodge Ram is stamped with Made in Italy. Yet the part is fairly small that even if Italy continues to make it, they can ship 50k water pumps in one shipping container to Detroit, and the truck can still be assembled here. That's not an issue. The issue is when the truck is made in Mexico entirely (which I think they still are). I know that's not "the entire supply chain" but it certainly becomes a center of gravity.
Last year many people were talking about dev shops changing their "center of gravity" from the US to other places like Poland. In other words, CEO here, EVERYTHING else is in Poland. Wherever that center of gravity is, that's the country that will benefit the most. They may even hire a remote worker in the US that is up all night - but it will be the exception, not the rule to hire US people.
Most clothing worn in the U.S. was made in the U.S. even in the 1990s. In the 1980s it was over 70%.
Clothes are much cheaper than they were in 1960. You could bring the garment industry back to the US but you wouldnt be able to sell your products because they wouldnt be price competitive with sweatshop products.
You can just ban imports of the sweatshop products.
like all Apple products?
The problem is that people like sweatshop products. If you ban them you get voted out because of massive inflation.
>> Manufacturing jobs bring the entire supply chain of the manufacturer with them. > Not really... Manufacturing today is a global process and the entire supply chain is usually spread around the world.
You're both right but you appear to differ on particularities, like if it's good to bring all manufacturing onshore.
I'd rather address Jensen's could-be-apology which pretty much mimics Grok's "Oops, I made some pedo images, sorry... but move on, nothing to see here."
Yes, Nvidia, Apple and AMD are the companies that drove the US chip manufacturing overseas. The problem is, thanks to that, they are now forcing us to pay for their enormous margins and for bringing chip production back here, all the while they swim in money.
On top of that, we are now supposed to appreciate their newly acquired wisdom and be thankful when they lecture us about what's good for America.
Then why is Germany bemoaning and suffering from their Mittelstand jobs going to Eastern Europe and Asia?
I'm not sure what you're arguing against, isn't that the point of the GP? That we can bring all that stuff back? Tesla makes things predominantly in-house and didn't use a supply chain all over the world. There are still garments grown and made entirely in the US, eg Duckworth. They're just expensive because there's not a lot of it left.
For manufacturing in the US to be economically competitive on the global stage (or even on the domestic stage), the actual work will mostly be performed by robots, not by humans. This will bring back profits, but not a lot of jobs.
In the specific case of these chips, the offshoring was to Taiwan, a democracy, and one of our geopolitically closest allies. This business went to TSMC because they did a better job producing these chips than either Intel or AMD (or AMD's successor, Global Foundries). The Twinscan machines that fab the chips are from ASML in the Netherlands, another democracy and geopolitical ally. The parts for those machines come from a truly global supply chain. Modern chip manufacturing is an absolute marvel of global integration.
American consumers and businesses benefited from this arrangement in the form of very competitively priced hardware. Most of the manufacturing was in Asia, but most of the profits were to American companies. This is why America is today the richest country on Earth. It simply would not have happened like it did without free trade.
China's low wages and integrated supply chain can beat American manufacturing. China cannot beat the combined talent of the free world. Along with immigration, from the likes of Taiwanese-American Jensen Huang, free trade and an open economy was what once made America great.
> In the specific case of these chips, the offshoring was to Taiwan
In the context of Jensen's would-be-apology, it doesn't matter where the offshoring went. Nvidia, Apple and AMD drove the US chip manufacturing overseas, and thanks to that, they are now a virtual cartel which commands enormous margins, so they can "mercifully" argue about bringing chip production back here... at our expense of course.
While paying through the nose, we're also supposed to appreciate their crocodile tears and listen to their drivel about what's good for America.
Yep. I live here, too, and it's a great place. My primary concern is that we're pretty reliant on just those two companies. If they decide to leave or make major changes, the impact on me (even though I work remotely as a software engineer) would be huge. I hope we manage to diversify.
To answer the GP, you'll have to take a look at why the entire industry offshored at the same time.
What makes you think the problem that caused the industry to go won't also cause it to fail if somebody forces them to stay or tries to bring them back? Also, why one industry leaving made people there destitute?
Those things are always more complicated than they seem.
Yep, it's definitely complicated from an economic standpoint.
There was a strong dollar making imports cheaper and exports more expensive. At the same time there were reductions in tariffs (Tokyo Round of GATT) as well as increased quota allowances from other countries, particularly China, than were previously allowed (the Multi-Fiber Arrangement).
At the time, this particular area of the country had turned into a global textile hub and it was devastated as a byproduct (over-saturation of a single industry). Now if you come to the area, you will see all of the old mills converted into apartment complexes, coworking spaces, wedding venues, etc just to preserve the architecture.
The whole area is beautiful now and has been one of the fastest growing parts of the country for almost a decade. I moved here 25 years ago when the changes were just starting but the natives will tell you the whole story. I think a PBS documentary was being made about it too.
We should still differentiate between low value and high value add manufacturing though. Building automobiles and automobile parts, great. Relatively high skill, high value add jobs. Spinning cotton, not so much.
If we have an infinite supply of labor with no better place to allocate them then sure, any additional job is good. But that's not the case. We have a constrained labor supply, so is it better overall to focus on high value, high pay jobs, even in manufacturing instead of aiming for the entire supply chain for everything?
So European companies brought new jobs and prosperity to Greenville, SC, and the local Americans thanked Europe by voting 60% for Trump in the last election.
How do you explain that? Why do the locals vote against the countries that provide them the jobs? Are you also pro-Trump because you live in that town?
Because when an American votes for a president, asking how his choice will affect Europeans is not his top priority.
HN sure does like beating up on folks in the Southern US by painting us all with the same brush, it's the worst kind of ugly.
To be fair -- there are a lot of people in the southern US who do the same thing to various demographics that HN users are likely to belong to. You can actually see serving politicians do that on TV, and have been able to see that for a long time. Not everyone does it, but not everyone on HN does it either. Indiscriminately doing the same thing back isn't good, but that kind of ugly seems to just be human nature.
It's not called the Southern Strategy for shits and giggles.
I'm a liberal and I've lived in Texas (Austin) for 20 years. It is infuriating when I am on some liberal-oriented forum, someone says we should force Texas out of the union or whatever, and everyone cheers. ~40% of Texans didn't vote for Trump, and in absolute numbers are a greater number of liberals than most other states in their entirety ... yet my supposed fellows want to write us off. Ugly indeed.
Are you...doing to liberal-oriented forums what they do to Texas? Tarring everyone with the same brush?
I am?
Am I saying they should be disenfranchised from the country? Have I said they I have no empathy for their concerns and hope the worst for them? No.
What I said was it was infuriating when they are doing those things to the ~40% of Texans who are liberal. I didn't say it happens on all liberal forums, I'm complaining about the cases where it does happen. And please don't shift things because I said "everyone cheers" because it should be obvious it is a common phrase and doesn't literally mean I checked and every person on the forum commented.
Would you even call HN a liberal forum? It is full to the brim with profiteers who have no ethical framework except making money for US-based VCs.
The past years have shown that many have no problem to change affiliation with the zeitgeist. I feel many Americans are secretly pro-Trump as long as they make money. If there would be more liberals in US tech we would see much more leaks coming from companies such as Apple, Facebook, Reddit, Google, about how the senior leadership is supporting the government policies.
For example with Facebook it needed a woman to get sexually harrassed out of her job and write a book called "careless people" so that it is reported that Facebook engineers were actively embedded with the Trump campaign while at the same time democrat voters (black people) were shown literal fake news ads to keep them away from voting.
I have not seen one Facebook senior engineer being ostracized on HN for working on the trump campaign. Everbody made their millions and joined the next big thing, with us worshipping their amazing FAANG credentials.
If the people who worked on DOGE do a "SHOW HN:" nobody would call it out.
> Would you even call HN a liberal forum?
I just look at the patterns of things that are downvoted to death. Comments that would come out of Peter Thiel or Elon Musk's mouth any day of the week are regularly downvoted to hell here.
It's not a matter of 'liberal' vs whatever anymore, it's a matter of expertise and basic ethics versus corruption riding upon anti-intellectualism, cloaked in naked bigotry. Say what you will about the prevailing value system among HN commenters, this place isn't that bad.
My observation over the last 10-15 years here has been this is partially true. But what's more true is the Overton window has shifted. To use your example, the things that would come out of their mouths, especially Elon, has taken a decidedly right wing turn over time. So keep in mind you're also seeing people who have largely stayed the same discussing a culture that largely has not.
In a word, no.
Austin, the capital of Texas, is quite heavily Democratic and liberal. But most of Texas is decidedly Republican: https://en.wikipedia.org/wiki/Politics_of_Texas
Austin is the Lawrence (Kansas) of Texas.
Stop playing the victim. When you have time to hang out on HN you're obviously part of the privileged class. The area is hugely profiting from "stolen" EU jobs, which according to Trumpistan logic is something that is not good. I don't see any uprising of all the "folks in the Southern US" against the lawlessness of your government. And if you're called out for it the victim reflex sets in.
They extended their operations there because Biden lured them with insane subsidies.
Don't commit the mistake of thinking Trump politics is a rupture from what came before when it comes to how the US treats Europe.
It's been economic aggression after economic aggression from both parties since Obama. Different styles, same core ideas.
The subsides were during Clinton and Bush 2. BMW and Mercedes were here long before Biden and Obama. It makes good sense to manufacture your product in the area it is sold - that's the real reason for their mfg base establishment.
Not only the direct jobs, but also the other support ones - automation, suppliers, maintenance, facilities work, etc.
Absolutely, especially with larger/heavier items like cars... I'm frankly somewhat surprised there aren't more assembly plants across the US just to reduce the shipping costs of the final product. Even with a more globalized supply chain of the component parts.
I'm talking of the Biden-era IRA here. BMW had to invest 1.7 billions in 2022 to manufacture most of its EV directly from there as you can compete in the US market without the IRA subsidies and the conditions severely limit even which parts you can import.
That's a significant shift moving from final assembly to forcing most of the supply chain to be relocated.
Good point. "Free trade between free countries" is a nice concept but unfortunately Americans have cancelled that subscription.
What countries, beyond the US, are you speaking to? I mean, I'm interested in what countries you're talking about that don't leverage tariffs and other restrictions to favor domestic industries in those countries.
There is EU / Schengen which immensely boosted local economies. We had TTIP but unfortunately it was killed by opposing forces, and there is still MERCOSUR. However, Germany with it's brilliantly corrupt leadership, changed that strategy to "trade facilitates change" ("wandel durch handel") and went all in to removing trade barriers w/ russia and china because the idea was to convince them if we trade they won't try to kill us. Obviously this approach failed.
Strategically, it does not make sense for democratic countries to have higher trade barriers with each other than with autocrat states. But over time the hybrid warfare by autocrat states leveraged social media to convice people to vote against their own interest e.g. brexit.
Most countries had tariffs before trump, including USA. None have dumbass tariffs like trump though.
You should realize that the Trump tariffs are about opening negotiations from a position of strength and not a final position...
Plenty of countries have negotiated more favorable tariff positions.
And what did you gain exactly?
Tax revenue. The nation is tens of trillions in debt with a multi-trillion per year deficit. Tariffs are proportional to spending, and encourage domestic production and security.
There have been several favorable trade deals as well as several announcements for new production facilities in the US... this may cost more than imports, but there's something to be said for domestic security in terms of access, especially in the likes of a global pandemic or war.
I'm not suggesting it's a perfect solution, or situation, only in that it isn't exactly an idea completely without merit and just blindly applied at random.
You're description matches a well planned and communicated slow increase of tariffs targeting specific products or industries so companies have time to adjust (newsflash, US was already doing this). Trump used blanket tariffs as a hammer to extort other countries, but its not like we want to buy your shitty cars anyway. Most of these facilities already existed or were planned. hint: most foreign brands were building their cars in US already.
If the economy is doing so well because of these tariffs why are they hiding numbers?
Its not even the first time US tried tariffs like these, it didn't go well then but Trump talks about like it was a golden age.
The US seemed to get through the industrial revolution mostly with tariffs over income tax revenue which was extremely limited early after enacted.
And you believe the world is similar to what it was back then? Are you mainlining fox news?
> They extended their operations there because Biden lured them with insane subsidies.
Biden, really? If you’re attempting to stop disinformation, please start with yourself.
Michelin opened their US headquarters in Greenville in 1984. BMW opened their plant in South Carolina in 1994.
How was (at the time) Senator Joe Biden of Delaware responsible for that in any way? Why would he care so much about South Carolina?
The real reason is shipping tires and vehicles across oceans is expensive.
I said "extended" not "opened". That's indeed intentional. Please don't use a strawman to avoid addressing the point I'm actually making.
Michelin invested significantly in the site recently and BMW added a ton of EV manufacturing capacities, we are talking of a 1.7 billions dollars investment.
All of this is linked to subsidies they got through the IRA on top of local South Carolina subsidies. They had to do these investments to remain competitive in the US market as the subsidies are tied to local manufacturing and the conditions significantly limit what parts they can import. It was a direct attack on European manufacturing masquerading as green investments.
Guess which president passed the IRA.
Downvoted for a factual comment, I see the usual denial on the basis of party lines is still as strong as ever in the US. Here is a bunch of sources for the few who might be interested:
[1] Eager for Credits, BMW Breaks Ground on SC Battery Plant https://www.autoweek.com/news/industry-news/a44361301/bmw-ba...
[2] Inflation Reduction Act 'super aggressive,' Macron tells his US hosts (https://www.euractiv.com/news/inflation-reduction-act-super-...)
[3] Michelin's US investments won't affect Europe, CFO says https://www.reuters.com/business/autos-transportation/michel...
A line cook makes no more burgers per hour, a hairdresser delivers no more or better haircuts, and a daycare worker watches no more children concurrently than they could have 25 years ago. Meanwhile the Magnificent 7 have emerged. Baumol effects might have raised wages a bit, sure. How could the relative positions of these workers not fall as all these tech-enabled and scale-enabled neighbors come on to the scene?
The whole concept of buying services from people is either that their time is worth less than yours, or they have special skills that you need and lack. “No such thing as unskilled labor,” ok, but you are definitely get sorting on how useful people’s skills are and how difficult they are to substitute or replicate.
> How could the relative positions of these workers not fall as all these tech-enabled and scale-enabled neighbors come on to the scene?
I’d like to see this worked out for real.
On the one hand, sure, a hairdresser cuts the same amount of hair as they did 25 years ago, and a fancy tech worker produces enormously more output than 25 or 50 years ago.
On the other hand, why does it follow that that tech worker should have an amount of take-home pay equal to vastly more haircuts per month than a comparable worker 25 or 50 years ago? A modern programmer does not actually need more haircuts, or more food, or more lattes, or more housing, or more doctor visits than a comparable worker any other time in the last 50 years.
So maybe something is actually wrong with the profitability of modern non-labor-intensive companies and the tax system such that their owners and employees are wildly overpaid compared to lower-productivity workers.
You seem to just be describing Marx's Labor theory of value.
It sounds more fair to pay people according to how much and how hard they work, but economically it tends not to work out.
I’m thinking more of paying people on the margin or of some kind on tax system that compensates for inequality a bit.
Not fully worked out, but consider: suppose there are 100 people in the population, and a bunch of them are ambivalent between tech work and jobs like hairdressing. If tech work paid 10% more than hairdressing, some would do tech work and some would cut hair. If tech work paid 200%, then maybe there would be too many applicants and the employers would reduce wages. (I’ve occasionally contemplated that perhaps one reason that the big Silicon Valley employers pay so much is kind of anticompetitive: they can afford it, so they might as well, because it makes it more expensive to compete with them.)
Or alternatively, imagine if taxes were structured so that owning more than one house were highly discouraged (with appropriate provisions to make owning properties to rent them out make sense, which is something that a lot of legislators get wrong), and if permitting to build houses were not absurdly restrictive, then many different jobs with very different salaries would could still result in having enough income to afford to live in approximately one house. Some might afford two (!), and some might afford one that is much fancier than someone else’s, but if the pressure that makes someone like a hairdresser need to compete against a highly paid tech worker to pay for a similar house went away, the situation could be much improved.
(California, like many places, has strictly too few residential units in the places that people want to live, so just adjusting prices won’t help much.)
> The whole concept of buying services from people is either that their time is worth less than yours
And if everyone else's time has become more valuable then too has the time that is being saved by buying services.
If my time as a programmer is worth significantly more now than it was 25 years ago, then the time I save by buying services is worth more.
There's a reason that someone making $1mil/year is going to be willing to pay more for the exact same haircut that someone making $70k/year also gets. The time being saved is worth more to them.
You're only looking at half of the equation here. Following your logic, if my time is worth $100/hr, I should be willing to pay $99/hr for a haircut. But reality is that a haircut isn't just worth some utility value based on time saved, it's worth the lowest amount where suppliers' willingness to provide it at a given quality and buyers' willingness to pay meet.
So while the $99/hr haircut might technically save me money/time, suppliers of haircuts are generally willing to give the same haircut for $30/hr. If one supplier tried to pin their prices to the growth of their customers' income, they would go out of business. That is because the value of the suppliers time isn't increasing at the same rate.
I'm mostly bald... I got tired of paying as much as I did for haircuts and now mostly just use a pair of clippers on myself, since my goal is to take off all of it. I've paid for more beard trims the past few years than haircuts, though I mostly do that myself too.
Note, I usually use clippers on myself about once a week. Sometimes I'll use a shaver to get a closer shave, but generally doesn't matter as I don't care if there's a little growth, which is noticeable unless I literally shave daily anyway... which I'm too lazy to do, and definitely not able to pay someone else to do.
> Baumol effects might have raised wages a bit, sure. How could the relative positions of these workers not fall as all these tech-enabled and scale-enabled neighbors come on to the scene?
Supply and demand? If the population of hairdressers was small, so they could charge more and more, then their wages could keep up as a percentage. And that would be possible if for example so many people moved into high productivity work that only a small percentage remained in low automation work. But if you have a constant influx of new hairdressers or a constant influx of people willing to do low automation work, that doesn’t happen.
That’s the Baumol effect. The rising tide does lift all boats to an extent, but not the same extent.
I agree, I’m just saying the extent is influenced heavily by the increasing availability of workers at the lower end of the automation distribution.
But the relative value of those same labor (hairdresser, daycare worker) changes. If my labor as a tech worker was $50 / hour I'm willing to pay $30 / hour for a haircut. But now if I make $100 / hour I'm willing to pay $60 for the same haircut. And in both situations I still need a haircut and the hairdresser is still the place to go to get one.
Sure, but the gap between your hourly wages has doubled.
Which is fine right? If both wages just keeps up with inflation, the gap will increase by the same amount as well. In fact in this particular case I wouldn't even expect the hairdresser's wage to increase the same amount proportionally, which is also fine. Not all wages should increase at the same rate.
The line cook is relatively as valuable as they were in the past, they're just being out leveraged by people asserting a self-centered entitlement mentality.
I didn't realize that self-centered entitledness was a new phenomena?
Manufacturing in particular... it's very easy for folks to say we should bring those jobs back to the US but people are often shocked when confronted with the prices of items manufactured in the US. I don't say that to dismiss the thought but it would be a lot more difficult for folks to swallow than they think it would be.
Theoretically wages should rise due to the increased demand in labor.
In practice, not sure. But it's not like the prices dropped drastically when mfg. was outsourced, the companies pocketed a most of the savings as profit.
Prices absolutely _did_ drop dramatically for many, many things that are manufactured overseas. Goods from from clothes to electronics are vastly cheaper.
How much is that due to genuine innovation in manufacturing and automation vs cheaper labour and a lack of environmental and human rights regulations?
For clothing, for the most part is an Indian woman that is moving the cloth on a sewing machine still. We have not LLM'd making clothes yet. Nike and a few other companies are working on 3d printing shoes, but it's not comparable to hand made yet.
For the most part, the price of a shirt made in India vs USA is the cost of labor. The Indian woman will work for $3 per hour which is a decent wage for that area (don't fact check me, it's just a guess here). She can probably make 5 shirts an hour.
A woman in the United States will make $16 per hour and still make just 5 shirts (or less - more rules in the US about breaks, and probably streaming Netflix too)
Now the company that sells the shirt at Walmart for $10 will have a profit margin of probably $5 per shirt from the Indian labor, and $1 from the US labor.
Technically after the industry is built out more we may be able to squeeze more shirts per hour if we start doing technical innovations (for example we make a machine that pre-sews 5 of the seams because of innovation. This is something that won't happen if the center of gravity is in India, but may happen in the US. (Actually today that may happen in India as tech is taking on its own thing there now).
If we cut costs and automate the way China has automated - some factories run without any lighting at all because it's all robots running in the dark - then there aren't going to be a lot of jobs created by on-shoring. And the only way to create a product on-shore that approaches the pricing of the Chinese equivalent is to heavily automate.
"Lights out" has been the big automation meme since before China joined the WTO. Everyone has gotten better over time but it's still "high school sex bragging rules": a few people are doing it but not nearly as many as brag about doing it.
Clothes are nowhere near as heavily automatable as people like to believe they are, is the problem. Unlike many other goods, nearly every article of clothing produced today is still produced with human hands. This does not mesh well with the fact that the modern public has been trained not to value apparel; people expect to casually buy items of clothing for less than they'd spend on a single meal.
It's not like the cost of clothes would be that much more if produced domestically though... the difference is the margins would be lower, a domestic employee would have a job and the domestic economy as a whole would be stronger as a result. Not to mention, the lower margin also means the wealth gap would be more narrow and there would be less incentive to stoke the flames of class warfare.
Why do people assume that clothes (and other goods, mind you) produced in the US are a mere hypothetical? There are plenty of brands that do so, and your general public overwhelmingly ignores them (and, as you have just demonstrated, don't even know they exist) precisely because they are way more expensive than consumers have been conditioned to believe that clothes should cost.
For instance, actual MiUSA jeans from companies like 3sixteen and Raleigh Denim retail for ~$200+, which is a far cry from the $30 to $50 that most people think jeans "should cost" (and that companies like American Eagle, who have long since outsourced their manufacturing, are happy to provide). Sure, it's not as if MiUSA jeans HAVE to be a few hundred dollars (I believe there are some Gustin's jeans you can pick up for $120 or so), and there are offshored jeans like Levi's which are already overpriced. But you'd have to be very naive to think that there would not be a massive and quite frankly unbearable sticker shock for the vast majority of people if you were to somehow force all domestic clothing demand to be met through domestic production. You could maybe sell it with some very effective austerity propaganda, but good luck with that.
Where did I say there are no clothes produced in the US? That said, I do think there's room to compete of most US clothes were produced domestically and that the pricing could come well below the existing US brands.
There's also brands made in China for cheap with Euro brand labels attached that sell for several hundred. Cost is not the same as price.
The jobs also generally suck.
I've worked a wide array of blue collar jobs and manufacturing I always found some of the worst, even worse than stuff like general labor building houses or working on fishing trawlers in the Bering sea because at least that stuff wasn't nearly as rote.
You stand at a machine doing the same fucking thing over and over. Do one thing wrong, your finger gets chopped up -- you think that sounds easy but wait until you're up all night taking care of a screaming infant and then have to come in so your family doesn't starve, then you make a simple mistake and now part of your body is gone. Often a overnight shift. I would find myself waking up at 2,3 am moving my arms but completely unconscious. Sometimes I would catch myself before I stick my hand into something that would break it apart. One place I was working, about half the people were missing fingers.
I don't know why on earth you would want to bring back people getting burned alive in steel mills or their fingers chopped up when a stamping machine has all its safeties break because maintenance didn't maintain them right. Why we would trade away our comparative advantage in things like designing widgets and instead do the awful work making them is beyond me unless you are so desperate it's your only option.
> Why we would trade away our comparative advantage in things like designing widgets
As China has shown over the past 20 years, that advantage erodes quickly if you stop making widgets altogether. It's very easy for widget makers to move up the value chain into widget design. And once they do, you're cooked, there's nowhere to hide.
Not to mention, widget design can't absorb as much labor supply as widget production. And many people can't do widget design, still need a living, and would be perfectly competent widget makers. So...you gotta solve for that if you focus only on widget design.
Out of all the many industries out there, I don't understand why we keep glorifying and romanticizing manufacturing and trying to "bring it back." I've also worked a few of these jobs and you're right: THEY SUCK. Depending on what you are manufacturing, it can be boring, stressful, stinky, physically taxing, or dangerous. And most of them, even the highly skilled ones, don't pay well. For the sake of our own society, we should be getting rid of these jobs, not adding them.
Because there are 300M people in the US and not all of them can have your cushy SSE role. See all the homeless people - it's because we're selling them out.
Maybe not literally all but certainly most. We hardly have any farmers or factory workers compared to what we had at one point. They've mostly moved onto cushy office jobs.
Most is 12%? This is the problem with HN. You're all so bubbled it's ridiculous to think sometimes a HN'er will say something like "If I were President."
that's a very incomplete view though. How many of those would take up the newly created manufacturing jobs? How many of those can be trained to do other, better jobs? There are reason to bring some manufacturing jobs back for national security interests etc, but from a labor and economics perspective, it seems a better investment is first to try to invest in people such that more of the current labor pool can be engaged in "better" jobs first.
> For the sake of our own society, we should be getting rid of these jobs, not adding them.
So let me get this strait. You think these dangerous, monotonous jobs are bad for "our own society" so the best thing for "our own society" is to export these dangerous jobs to another society "own own society" doesn't give a shit about. Wonderful.
I can't believe how ignorant and callous people can openly be.
You can't seriously believe those other societies are taking manufacturing jobs because they are worse than what they already have. People in the 3rd world are less fortunate; they're not dumb -- they want the same as us: better lives for themselves and their family. If they're working in a factory and not the alternatives it's because they passed something else along the way that was an even shittier option than that.
> You can't seriously believe those other societies are taking manufacturing jobs because they are worse than what they already have.
My statement is in reply to those who are unconcerned about exploiting desperate societies.
Short of going back to a society of married families with a single income, there isn't really a solution to keeping everyone working and making an income though. Without jobs, we revert from a modern society to a third world nation.
There are some people who like the rote work. You and I may not but some of the people I talk to like that they can basically "turn their thinking off" and get paid.
>Do one thing wrong, your finger gets chopped up This should not be possible in the US. OSHA is still in existence(you could argue that the future state is unknown)
https://www.osha.gov/laws-regs/regulations/standardnumber/19... >1910.212(a)(1) >Types of guarding. One or more methods of machine guarding shall be provided to protect the operator and other employees in the machine area from hazards such as those created by point of operation, ingoing nip points, rotating parts, flying chips and sparks. Examples of guarding methods are - barrier guards, two-hand tripping devices, electronic safety devices, etc.
> a stamping machine has all its safeties break because maintenance didn't maintain them right. When the safety on a machine fails, the machine should stop. If it does not, then the safety was not installed correctly.
Or more likely, the safety measures were bypassed because they were a PITA. You can put all of safety measures you want on equipment, but humans have this insane mindset of faster = better. Yes, that includes top to bottom of companies.
Sounds nice but not reality. The price of paying out a finger every few years is a lot cheaper than paying for maintenance and safety equipment.
Where was this? Because that's not true in the US, land of the personal injury attorney. My brother used to be a machine salesperson. He got a call from a law firm couple years after his company sold a machine asking about a particular one that was sold (not even by him) because their client lost a body part. Those payouts often end up in the millions.
A payout in the million doesn't seem in disagreement with the OPs assertion that the payouts make economic sense for these companies.
I think the picture you paint of the US is rosier than the reality. Brings to mind the death of a 16 year old working in a poultry processing plant:
https://www.nbcnews.com/news/us-news/slaughterhouse-children...
These companies know what they're doing.
It looks like a company was using uninformed and "scared" employee population to commit labor violations. Also using the same tactic that I alluded to in one of my other comments: Production workers are hired from a staffing agency and dispatched to the job site, that way the company HR doesn't know(and can't legally ask about work eligibility).
It looks like that plant in particular has serious issues. Someone else died after the 16 year old, bringing the number of deaths in recent years to 3.
This one in particular seems to know what it is doing: Googling "Mar-Jac Poultry" does not bring up any of the issues, nor are they listed in the Wiki page.
I've worked some in metal fabrication and supported some light industry. if you think anyone in a normal business in the US that hires less than 50 hourly people has even read the OSHA regs, you're completely unconnected with the reality
we really do call those stamping machines 'finger eaters'
I work in manufacturing and stamping machines scare the shit out of me, usually because of the forces involved but I did work on some that were not guarded. That was not in the US however.
My first job with a stamping machine was in a company with about 30 production workers. This was early 2000s in the southern US, all the workers were from Latin America and I think that most of them were not here legally(I say this because the company used temp agencies to employ the workers and at one point later they wanted to bring one of them on in a management role so they had me(also a temp) ask if the person wanted too switch the the higher paying but also requiring them to submit legal documents role).
Even under those circumstances, I never saw the company do something that skirted OSHA regs. Their stamping machine was a POS that was annoying as hell to use, mostly because the light curtain and other safetys kept tripping but it was never bypassed.
Because in a lot of people's minds having ~1/1000 of your coworkers killed for every decade you work at the factory still sucks less than taking orders from some algorithm crafted in a downtown office by someone who wants to exploit you at best and hates you and your way of life at worst.
In the factory you get both. With essentially zero chance to change the algorithm. When my father worked in the factory he found a way to manufacture the product faster and cheaper and just as safely, and rearranged the factory to do so. He was punished by management for altering the algorithm and also ostracized by fellow workers because they perceived it as reducing the demand for jobs.
Yup, that does sure sound like a silent-generation or boomer era story.
I'm sure pockets of that stuff are left but pretty much all of "those sorts" of "we don't pay you to think" workplaces either transitioned or went tits up over the course of the 1980s and 1990s as the Japanese management made its way to the US (though one could argue it's come back over the past 10-15yr).
Now, of course if you are doing something that's as unskilled as unskilled gets or in a particularly perverse workplace you'll encounter those conditions, but they are absolutely not the norm. The business schools these days teach various flavors of "it's cheaper to run a workplace people feel doesn't suck".
This stuff goes through phases to some extent. The 1920s and 30s were adversarial. The 1940s-60s were more cooperative. The 1960s-80s were not great. 90s and 00s were quite collaborative. Now we've kind of got another wave of "management knows best" and adversarial thinking that's waning.
That's the American dream story- always starts with dad getting yelled at for making things better and faster - the next sentence in the founding documents: So he went his own way and now we have NicoCloth Inc. which in the years since has become a global corporation.
Pretty sure they regulated that out of existence in the past several decades. Now best you can hope for is to be bought out by the competitor of the company you left sometime before the 50 employee mark.
(only partly joking, and that part is way smaller than I want it to be)
Well, I hope to think it's still possible.
> You stand at a machine doing the same fucking thing over and over.
Grew up in a machine shop ran by my father and my grandfather ran a one-man tool and die shop and ran the OBI presses himself. I ran the press, milling machines, lathes and saws. No one in that shop was missing body parts. Sure, its monotonous at times but that can be said about many jobs. A well ran shop should not put you in harms way.
> I don't know why on earth you would want to bring back people getting burned alive in steel mills or their fingers chopped up when a stamping machine has all its safeties break because maintenance didn't maintain them right.
I don't know why on earth you seem to be content with other people being subject to the same conditions.
> You stand at a machine doing the same fucking thing over and over.
Grew up in a machine shop ran by my father and my grandfather ran a one-man tool and die shop and ran the OBI presses himself. No one in that shop lost a finger.
> I don't know why on earth you would want to bring back people getting burned alive in steel mills or their fingers chopped up when a stamping machine has all its safeties break because maintenance didn't maintain them right.
I don't know why on earth you seem to be content with people outside of your country So the laborers in other countries where safety is ignored aren't people?
> I don't know why on earth you would want to bring back people getting burned alive in steel mills
We don't want to bring back their 3rd world safety standards. We just want to bring the jobs. Factory work can be less rote if teams rotate or their employer provides enough rest. Unions are a potential solution to this issue.
> Unions are a potential solution to this issue
This is part of the Labor vs Capital stuff I mentioned in my post. We're not likely to have strong unions again in the near future, so any jobs we bring are likely going to be dangerous in addition to carrying low pay.
OTOH if we posit strong Labor, the good news is we have a lot of jobs now that we can turn into Good Jobs. We could, for example, make it so that any large employer pay their employees enough such that nobody who works for them full time (including contractors) is eligible for income-based government assistance at the state or federal level. We could choose to expand those rules to any organization over a certain size. There's a lot we can do to turn Bad Jobs into Better Jobs without boiling the ocean and moving industry supply chains.
Doing rote work is better than no work and living off the government.
People in those rote jobs enjoy the camaraderie, the beers after work and putting their kids through school. Something an unemployed person has more difficulty doing.
Even the great USSR had huge amounts of rote work. People found a way to live life.
Sure, let's adopt the Soviet model of "we pretend to work, and they pretend to pay" because what could go wrong there!
You're basically asking every consumer to pay more for goods so someone can feel better about themselves personally (at the cost of someone who they don't share a country with). I'm not sure if you've met many people, but it's not a very compelling argument, nor a morally superior one due to the global impact.
It’s going to cost the consumer one way or another. Either taxes, (cities still need to take in taxes, so if they lose taxpayers, their option is to levy more taxes), quality of life (more homeless, less municipal money for maintenance due to social costs, etc.)
I’d prefer things to cost more than to have cheap crap but at the cost of social/employment issues. I don’t need new fashion every year. I don’t need new appliances every few years. I can do with less consumerism in exchange for my neighbor being able to have a job, boring as it may be. At least he’s not calculating the cost of suicide and wondering if he’ll be around for the kids 18th birthday.
> It’s going to cost the consumer one way or another. Either taxes, (cities still need to take in taxes, so if they lose taxpayers, their option is to levy more taxes), quality of life (more homeless, less municipal money for maintenance due to social costs, etc.)
It's actually not, because people aren't required to live near people who consume more in social services than they contribute in taxes. Areas like you describe exist, but basically contain the people who are unable or unwilling to leave an economically depressed area. Most people just leave.
> I’d prefer things to cost more than to have cheap crap but at the cost of social/employment issues. I don’t need new fashion every year. I don’t need new appliances every few years. I can do with less consumerism in exchange for my neighbor being able to have a job, boring as it may be. At least he’s not calculating the cost of suicide and wondering if he’ll be around for the kids 18th birthday.
I don't disagree entirely, but most people do based on behavior.
It's not a simple problem at all, including what is fair to consumers and the businesses themselves which have to compete with other companies that don't have artificially inflated expenses.
That's why I don't like to blame corporations for outsourcing. The consumers outsource every time they select for cost.
Pretending to not understand how game theory works is a choice -- more of a choice than customers have.
Companies are also constrained to do labor arbitrage once the rules allow it, but they were the ones who lobbied the rules into place and they were the ones to profit from the rules, so they have far more culpability here.
It would be a virtuous cycle, though, right? If we had the right incentives for keeping manufacturing here, then sure, prices would be somewhat higher [0], but so would income for the very people who would be buying.
[0] But how much higher, really? On a mass production line, what is the actual contribution of wages to the cost to produce?
That's not a virtuous cycle, that's inflation.
Assuming the local versus offshore good is a perfect substitute, that means that the value has not changed.
Paying more for the local good means your money is worth less, as it buys less value.
Your question on the production line doesn't account for all of the precursors also being local, plus the local energy rates, local taxes, local rents, and so on. Everything tends to be more expensive, otherwise the cost of managing offshore production wouldn't be worth the effort.
Total isolation only works when there's still room to grow by way of some underutilized resource- cheap labor, land, or something extractable from the environment like wood or minerals.
> That's not a virtuous cycle, that's inflation.
From purely a price perspective, sure. But there are other advantages to maintaining production capacity within our own country.
Plus, doesn't offshoring effectively push the whole world towards a common cost-of-living/income ratio? Great if you're labor in a struggling country, bad if you are labor in the richest country in the world.
That's why I do blame corporations for outsourcing. The companies outsource every time they select for more profit for their owners and not for sharing among the workers.
And if corporate officers don't select for more profit then their stock goes down, shareholders become unhappy, officers could lose their jobs and the corporation could even fail b/c they have competitors and their competitors will likely select for more profit.
Its called "capitalism".
I'm not aware of that many times where I've had a choice. I could get a nice, expensive dress shirt made in the US but for general clothing it's extremely difficult to buy domestic.
Frankly, a lot of the corporations are still to blame because they're the ones actively concentrating wealth at the top. If I had more disposable income I'd buy more made in the US products but my budget simply doesn't allow it.
But you wouldn't. You, and everybody else, would see several shirts that looked basically the same and not pick the expensive one without giving it any more thought. If you think I'm wrong, go start a company that makes shirts in the US. You will make a fortune because demand is completely unmet.
Even expensive brands are usually made overseas. I looked at a couple of random pieces of expensive Patagonia outerwear in my closet. One was made in Vietnam. The other in Bangladesh.
Sure, you can get custom/semi-custom dress clothing made in the US. Probably other things (at an eye-watering premium). Which may be OK if you buy very little clothing. But mostly forget about going into a store and picking things off the rack.
IIRC the last company that manufactured men's dress shirts in the US closed not too long ago. They really were dedicated to making stuff here. The economics just simply did not support it. Which is another way of saying people would not pay the necessary price premium.
Right, because there is virtually no difference in quality so companies go with the lower labor costs (as does basically everyone else on earth who is looking to have a task completed).
The expertise to do that isn't here anymore on a scale to satisfy the majority of the market.
However that is likely exactly what happened when it was finally pretty much killed of in the 90s. At some point clothes were made largely domestically. Some manufacturers started offshoring while others didn't. At that point consumers had a choice, the choice they made was to drive the onshore industries out of business or offshore.
There might be some argument people have more surplus wealth now though, and they'd rather en masse buy those domestic products than healthcare, healthy food for their children, education, housing, and the other stuff that absorbs all the income we can muster. Of course I think there is always a market for people with money for luxury goods, some of them buy USA because it is USA.
This is true, but let's not pretend that "healthcare, healthy food for their children, education, housing" is what's absorbing all the money. Average car payment is around 700 bucks a month now.
The median car payment is $0.
~75% of cars are bought used and according to Experian only 33.5% of those are financed. When adding 80% new cars financed you're already under 50%. Then consider already paid off vehicles.
I recently came to a tangential realization (obviously I'm not the first to notice) regarding "cheap Chinese knockoffs":
The US company outsources the manufacturing to China because "they have to" (I don't necessarily agree with that), Chinese company keeps the assembly line running a few extra hours and resells the units back in the US under a slightly different name.
This equation is so comical to me:
The greed-driven US company screams that it's "fake", yet they didn't do anything illegal by outsourcing, just put Americans out of jobs. But if they don't build in China, a competitor will.
The Chinese company is driven by the same "profit over everything" motive and doesn't infringe on the US companys trade mark, but competes with the US company with essentially an identical product minus the R&D costs.
US company cries foul, "they're stealing our trade secrets!" Creates FUD about China but has no legal standing to do anything about it. Reeks of the same "immoral but completely legal" argument the former/would-be employees make
That's what tariffs are for. These are macroeconomic decisions, not decisions that should flow down to individuals, to be thought of as their responsibility and their moral failing.
Individuals shouldn't be expected to choose to buy American. It's a cost with an at best extremely distant (in time and space) benefit for an individual, and a non-existent benefit unless everyone does it. Instead, when goods are produced by foreign slavers and polluters, they should either be barred from import (if they're morally impossible to support) or taxed arbitrarily in order to optimize the local market, for which discriminatory taxes are not a factor.
But all if this is bad faith reasoning in general. What is produced is shit clothing, with shit treatment of the workers producing it, and intentionally outmoded by planned fashion cycles. If it were quality clothing being imported, labor costs would be a much smaller part of the costs, and therefore of the potential lost margins if owners failed to maximize the exploitation of labor. Tariffs wouldn't even effect quality imported clothing. What they would do is kill the shit imported clothing market, and allow us to redevelop a shit domestic clothing market if the minimum wage were low (i.e. sweatshops), or if we raise the local minimum wage, force a quality local clothing market.
> I'm wrong, go start a company that makes shirts in the US. You will make a fortune because demand is completely unmet.
The belief that macroeconomic problems should be solved by spontaneous generation is a form of religious capitalism. The fact that it doesn't ever happen is pointed to as the evidence that we are always at an eternal maxima. It's a practiced, self-serving denial that our economy is always actively managed by a very few people.
You seem to think I'm trying to make some moral point but nothing I said has the slightest thing to do with morality. It is simple fact of incentives and human behavior.
Who are those "very few people" who actively manage our economy?
>If I had more disposable income I'd buy more made in the US products but my budget simply doesn't allow it.
How's that much different than the parent's claim of "The consumers outsource every time they select for cost."?
It isn't. I'm saying that people select for cost because corporations are actively engaged in pooling resources for the rich. If they didn't people wouldn't need to select for cost as much as they do.
>I'm saying that people select for cost because corporations are actively engaged in pooling resources for the rich.
People select for cost when resources are finite. This is going to be the case until we reach a post-scarcity economy, rich people or not. It's not like under communism everyone was driving around in lambos on gold paved streets.
When do you intentionally overpay for goods or services?
Are you haggling with your mechanic, landlord/mortgage lender, or grocery store to pay them more money than they're asking for, or do you purposely seek out suppliers that do not provide the offering with the best value?
Clothing is one of the hardest things to automate production of. We have had the "women at a sewing machine" since about 1850. Bring that 1850 women to 2026 with the latest computerized sewing machine and she would be equally productive as she was back then in an hour, and even after working that machine for a decade would not be much faster than she was. We can do a few fancy stitches today that she would have had to do by hand with the machine - but mostly we do them less know even though the machines are faster.
Nonsense, it's just cheaper to pay someone without any rights 50c/h then to automate it
If that industry was still in the area, they'd be automating the shit outta it. It's just not worth it right now considering there are always literal wage slaves in some place they can ship in for their sweatshops
Also, even locally produced premium clothing uses materials sourced from literal slave labour. There is no consumer decision anywhere, because the immorally sourced materials are just too cheap... And if you're willing to pay a premium for your morals, someone in the middle will just take it and fulfill the order with the cheap stuff.
They have been trying. Clothing is hard to automate. It needs to stretch and flex which is a problem for machines. We need many different sizes which makes things harder
> If that industry was still in the area, they'd be automating the shit outta it.
... and the jobs that were provided go poof again.
Not all of them, even automated industry is generally good at the macro level
Does your budget not allow it or have you allocated it elsewhere with optional or luxury purchases?
Most people don't drive around in a base Honda Civic.
The service economy has a few problems.
The first is that much of it is optional. Stuff like fast food. People can do without it much easier than doing without a washing machine.
The second is, for many services, such as child care and elderly care, most adults are terrible at assessing quality. This creates a race to the bottom much like you see in manufacturing, making the jobs low wage. Because humans are humans you can't really point to a specific consequence of this either.
Market forces are what cause different jobs to pay different amounts. Welders don't get paid high wages out of charity or respect, they get it because welders with sufficient skills are rare, so if you don't pay up you won't get your welding done.
If service jobs can be differentiated (e.g. by training and licensing) then scarcity can be created.
>e.g. by training and licensing
For best results buy a political or ten and then enjoy the profit of having government violence chase away much of the "maybe not just as good but good enough for a lot of the demand that's out there" competition that doesn't have your training or license or belong to your professional group or whatever.
And the best part is the public pays for the privilege of having supply be constrained because the state forces that constrain it are not paid by those who benefit but by the taxpayer.
Something something privatize profits something something socialize cost centers.
Manufacturing jobs were only "good jobs" in comparison to the alternatives available at the time. The other options in the US have gotten better in the last 50 years. As much as people hate on service industry jobs, they're much less physically dangerous than working in a mid-20th century manufacturing plant.
>> We have jobs, we have just decided that the people working those jobs are not deserving of prosperity.
I read an article years ago talking about a man that worked as a janitor for a US public school. He was just getting by on whatever that job paid. Someone (school board, business person, IDK) said if he wanted to make more money he should get more education himself, or learn some new skills so he'd be worth more and could get a "better" job. And hey, I'm all for some amount of meritocracy and all that but... If he did improve himself and get a better job the school would presumably find someone else to be the janitor for similar pay. The bottom line is that they expect an able-bodied adult to work a job that most people look down on for barely a living wage. At some point it's not about him needing to upskill it's about expectations about who gets paid how much, and America expects a lot of people to "make a living" at just above poverty wages.
I'm not sure how you change that, to some extent employers can't pay more because it's become structural and they don't actually have the money to pay those jobs more. So I have to agree with parent poster:
>> There are so many underlying changes to the established relationship between Labor and Capital in the US that would be a necessary part of keeping jobs here that it would effectively make us a completely different country.
If you upskill enough people, companies will need to start paying more for those services. And once they need it, they will find the money.
There is a reason unemployment numbers are always within the same small band. There's always money to employ around the same ratio of the population. And when people get richer, that ratio gets slightly smaller, not larger.
This really doesn't work because there is not enough demand for people to upskill. Even during boom periods like 1999, there were still janitors. Janitors did not suddenly earn more money because white-collar hiring was exploding.
You can look around the world, janitors consistently earn more in countries with a stronger middle class.
What you are calling "boom periods" are not composed of lots of people upskilling and moving into a higher earning partition of the middle class (or leaving poverty). I have no idea why you expected then to behave like something they are not.
It used to be 'America, land of the free' and we hero worshiped homeless dudes who happened to chase after cattle.
https://en.wikipedia.org/wiki/Cowboy
Now it's 'America, land of the greed' and fox news talking heads say homeless dudes should just be executed.
Fox News host Brian Kilmeade saying that homeless people should receive "involuntary lethal injections"
https://www.youtube.com/watch?v=phYOrM3SNV8
_DeadFred_ says: "Fox News host Brian Kilmeade saying that homeless people should receive "involuntary lethal injections"
Yeah, that kind of thought crossed my mind when a homeless guy, unhappy that I wouldn't let him sponge my car's windshield, grabbed my lhs rear view mirror with both hands and broke it (the mirror no longer responds to its dashboard control). But the moment quickly passed, leaving me only with a new item for my to-fix list.
FWIW we still worship cowboys. They differ greatly from today's urban homeless.
Note that the "Labor vs Capital" distinction mostly means "workers vs retirees". The reason more money goes to capital these days is not necessarily that each retiree is getting more but that in an aging population, there's more retirees so it takes more resources diverted from workers to support this larger non working population. This problem can be solved with more babies 20 years ago or more immigration of workers now to share the burden (unless AI makes everything weird).
I undestand what you are saying but retirees are not what people mean when they talk about Capital. They are talking about executives, fund managers, billionaires, and so on. People who actually control much of our society. Yes many of the funds are managing the retirements of working people but that does not necessarily need to be the case, nor do those retirees have any active ownership of the companies those funds invest in.
Right but the majority of people holding significant amounts of capital is retirees or people saving for retirement. There is a small minority of people wealthy for other reasons. It doesn't really make sense to strongly associate these people to "capital" since they are a small minority of capital holders.
There's been a lot written on Labor vs Capital, so I will just suggest you research the topic because you are not on target here.
Do you have a link? What I've seen in most discussions is obscuring of the fact that the majority of "capital" is directly or indirectly retirees or people saving for retirement. Those in the top 5% wealthiest often need to survive on that wealth for decades so it's not as if they have per year spending power that is that high. You too will be at your top percentile wealthiest of your life when you are nearing retirement.
Honestly? Your favorite LLM will be able to build you a syllabus better tailored to fit your current level of understanding. But in short, Capital is the people making decisions about how money is expressed through the economy.
But to make concrete what I am saying. Take a VC fund like Lightspeed that manages tens of billions of dollars. They do this on behalf of LPs, of which the largest are typically large pools of long-term capital like university endowments and pension funds.
Lightspeed, for example, has received ~$400m in investments from CalPERS (retirement program for some California public employees) alone. That represents tens of thousands of employees and former employees. Even if the notional value of one of their retirements is (say) $2m, that person is still Labor. Capital is represented by the people at CalPERS who decide where to allocate money, and by the Lightspeed GPs who decide which startups to fund. A former county attorney who has money in CalPERS has essentially no say over how her retirement funds are invested (if she's on a pension); that decision is down to a relative handful of people she will likely never meet.
A quick way to know the difference: top 5% wealthy people can buy the house next door and make it ugly, being a small nuisance. Capital can crash the entire economy with bad bets or get laws changed/ignored at their behest (we are watching this right now with X's CSAM generation on demand).
I think with the advancement of manufacturing techniques the future is in small run manufacturing. Manufacturing won’t return with a few companies employing thousands of people. My thinking is that manufacturing will return with thousands of companies employing around 10 people. The future will be more customized solving detailed problems with unique specification.
> There is no economic rule that says that riveting should pay more than taking care of the elderly or food delivery.
There kind of is - it's the same reason B2B SaaS tend to make more money than B2C - it's easy (easier) to sell someone something if they can make money from it.
If I can pay you Y to rivet some sheet metal together and sell the finished product for Y * 10, that's a much better outcome for me (economically) than paying someone to take care of my elderly parents. In fact, maybe I'm not mean, maybe _I_ don't make enough money to afford to pay someone to take care of my elderly parents.
Economic rules are all subject to externalities like the effects of taxes, regulations, etc. I mean there is no rule in the sense that some of the jobs that are poverty wage in the US are not poverty wage in other countries due to the impact of regulation.
It's a policy choice to allow Walmart pay full-time employees so little that taxpayers have to subsidize their food. We are free to make different choices.
Riveting ends in a real item that can often be used to produce further economic value. Elder care is not analogous to this, and the economic value is only what the elder can pay for it.
It’s almost entirely a leverage problem. Insofar as we rely on the labor marketplace as the primary “prosperity” distribution mechanism for the majority of people the power balance between labor and capital will determine the average person’s level of prosperity. The following increase the leverage of labor: collective action, high competition between firms, near-zero (actual) unemployment rate, strong labor laws. The following increase leverage of capital: monopoly, monopsony, cartel action, high unemployment rate, weak labor laws.
Obviously the cost of converting wealth into tangible “prosperity” is an additional factor, so inflation of the cost of goods and services will factor in.
So if we wish to promote broad prosperity over ultra concentrated wealth we need to address the above factors: enforce anti-trust, break up firms as needed, promote labor protections and organizing, make taxes more progressive than regressive, make stock buybacks illegal again. The hyper mobility, political ties (with low national loyalty) of the capital class make this difficult but not impossible.
We will probably have to de-emphasize some sticky cultural memes around individual merit and everyone “deserving their fate” to accomplish the above. A surge of empathetic humanism would likely do wonders for the mental health crisis as a bonus.
pixelready says "A surge of empathetic humanism would likely do wonders for the mental health crisis as a bonus."
Empathetic humanism isn't likely to do much for a schizophrenic or alcoholic.
If we were more invested in each other’s well being, especially if we had more capacity to put that care into action, wouldn’t that improve the support network surrounding those suffering from chronic mental health conditions?
Have you ever dealt with an alcoholic when he's drunk or a schizophrenic when he's acting out?
You use the word "suffering" as if they had no part in their own condition. I'm reminded of Duke, the skinhead in "Repo Man" who, as he dies, says "I blame society!":
https://www.youtube.com/watch?v=m3b5Q7b8YXo
I think you should read up on comparative advantage and the roy model of labor. Forced onshoring is likely to hurt US productivity and large wage gaps arise because of self-selection driven by correlations in productivity across jobs.
> Historically, they were better jobs due to a strong labor movement, but that movement has been largely destroyed.
There's something to be said that the labor movement was destroyed by eliminating the need for the labor. Bringing the labor back would see the labor movement return.
People still work, so this is a very bizarre comment to make.
Not really sure how you come to the conclusion that I was under the notion that nobody is working. Union membership has been in decline for decades. Labor jobs have been leaving the country for decades. Bring back the labor jobs that the unions represent and the union membership will go back up as well. The labor jobs that still remain are what's left of the union membership.
> Bring back the labor jobs that the unions represent
Please research which are the largest unions in the US. I'm curious why union representation would work for labor jobs, but not for the millions of jobs* represented by unions now.
* These are all "labor jobs," because otherwise you're not talking about a job
Most people referring to "labor jobs" are manual labor and not some laborious butt in a chair behind a keyboard banging code all day. While there are unions for the tech industry, the entertainment industry, and other non-labor industries, labor is pretty well understood in its meaning even if you don't understand it.
You're missing a giant class of workers. Janitors, retail employees, warehouse employees, home health workers, physical therapists, etc. And jobs in retail, food prep, hospitality (certainly the folks who clean hotel rooms would be surprised to find out they are not engaged in "labor jobs".)
Might be an interesting exercise to consider why you consider those jobs as not being "labor jobs."
Service jobs are hard to export, it's just moving money around inside your country. Riveting is a job that produces goods that can be exported for incoming cash, elderly care isn't.
That is a fundamental distinction, yes. But the notion that exporting brings wealth to a country is… kinda not really the case anymore.
If that wealth is ending up in very few people’s hands, and if said people are wealthy enough that they keep their money offshore (which is the case a lot of the time), what is the big difference in making something you can export?
This makes next to no sense. Service jobs aren't "just moving money around inside your country" for the same reason that exporting goods isn't "just moving money around inside your planet".
Services sell time and skills directly, instead of in the form of a tangible good. That's it.
Unless elderly care is too expensive and people have their parents live with them.
In the late 90's when we talked about the transition to the Service Economy, jobs such as call center were touted as the way forward for the recently unemployed textile workers. Until we found we could move those to the Caribbean, Philippines and India.
I remember a number of people talking about how they could make decent money bar-tending and waiting tables. Until the economy slowed down and people stopped eating out.
Service is job that you pay someone else to do because you don't want to do it, which is great until you have less income. Then it becomes a budget line item that can be cut.
> Riveting is a job that produces goods that can be exported for incoming cash, elderly care isn't.
Where's the distinction between "moving money around inside your country" and "goods that can be exported for incoming cash"? If you go to mcdonalds to buy a burger instead of making it yourself, is that also "moving money around inside your country"? What about paying some carpenter to make a chair rather than making it yourself? Should we just cancel all jobs that can't plausibly produce stuff that can exported?
Depends on the service. The US is a huge exporter of financial services.
Depends on the service. Call center work was easy to export.
I don't think that's how your parent meant this.
It wasn't about the labour part and whether that is exportable in the off-shoring sense.
It's about the product being exportable (in the sense of being able to sell it for money outside of your country) vs. just having people within your own economy doing "left pocket <-> right pocket".
And even with that, you can sell a waiter's service to other countries. You just have to first make them come - it's called tourism and comes with a whole lot of other jobs / supply chain(s) as well. Some of which can themselves be off-shored!
It's also hard to export manufactured goods if they're not price-competitive on their own merits.
That's why we import cheap illegals for those.
Curious that there are two parties involved in lawbreaking but only one of them gets called an "illegal".
That's because it's not synonymous with criminal. Murderers don't get called "illegals" either.
Slavor
Jobs aren’t good or not because they government declares it so by fiat, there’s substantive differences between different kinds of jobs. “Service jobs” are bad because they typically require little skill, just a human body physically present in the U.S.
In contrast, many people will never be good riveters. They lack the strength, coordination, and stamina to do the job. Similarly, many people cannot be plumbers or electricians. Those are jobs that require intelligence and skill.
This is exactly what I mean.
Reading this, one would make certain incorrect assumptions about pay in service jobs based on imperfect knowledge of skills required. One might assume service jobs in general do not require any skills at all beyond the capability to slightly warm a room.
The famous counterpoint is obviously "teacher" with its starting salary in the $20 range, but that's too easy so I will start with phlebotomist (starting under $15/hr). And I'll toss in chef (~$22/hr-$25/hr in my city) as an alternate to suggest that even in service industries skill matters (because there is a range here).
Even with a good labor representation, is making cheap tshirts a job people want to do / a good job?
I’m not convinced it is, or that it lasts.
I bet many people would find that job a lot more appealing than risking your life doing shopping gigs under time pressure, without even getting health insurance.
I’m not convinced that Tshirt job would exist long or in quantities that matters.
How exactly is doing instacart runs "risking your life" without using a definition for that term that involves any task where you're required to leave your house?
> Historically, they were better jobs due to a strong labor movement, but that movement has been largely destroyed.
This is a widely believed narrative, but not necessarily true. The competing narrative that better living and working conditions arise from better technology and cheaper energy is just as supported by the data. Perhaps even more so because it also explains the post-1971 decline.
This seems like a non sequitur to me. What does (general) better living and working conditions arising from better technology and cheaper energy have to do with which jobs are considered "good" and "bad"?
How does the explanation without labor power dynamics explain the post-1971 decline? Electricity is cheaper inflation adjusted than it was then, and technology has certainly progressed since 1971.
And working conditions are better now than 50 years ago too.
>we have just decided that the people working those jobs are not deserving of prosperity.
We've also decided that labor needs to be taxed more heavily than capital, which is fucking stupid.
Taxing the lower end of society who actually works at a higher rate than wealthy people is just so shortsighted.
I think even more important than the difference in taxation is the difference in freedom of movement. There are heavy restrictions on labor moving between countries, capital has no restrictions at all (except kinda in China) and can move instantly to wherever it is most useful, i.e. wherever has the most human rights violations and lowest wages. We need to eliminate this asymmetry: either get rid of all restrictions on freedom of personal movement and selling ones labor, or lock down the flow of capital with serious capital controls.
It'd be a very interesting thought experiment to completely redefine the economic and fiscal plan of the US.
It'd be interesting if we greatly reduced personal income taxes in the majority of cases. Removed corporate income tax (the idea being corporate income tax hurts all equity owners, whereas we specifically want to target the very wealthy), and then implemented a progressive wealth tax that kicks in starting at 7.5M or something (maybe something like 1.5% from 7.5M-15M, 2.0% from 15M-50M, and then 3% from 50M+, this could be done more smoothly if desired). We'd need to penalize capital flight with something (something like a 40% exit tax or something). The IRS would have to be greatly empowered to support this, net worth declarations would all be declared by the tax filer, and if audited and found to be incorrect, the IRS will purchase the asset at 70% of its declared value (or some other better mechanism can be thought of to ensure that NW is declared accurately). We'd also simplify the tax code in all other cases, removing all forms of credit/deductions/etc on income. This will free up IRS audit resources to focus on declared net worth fraud. Remove all forms of non-sin tariffs entirely.
Get rid of entitlements taxes and spend and replace it with a negative income tax that is calculated to provide a very base level of existence that never disincentives work.
Then remove government backed student loans, but make them treated the same as other loans (ie. students can declare bankruptcy). Kids should also get a 5k per annum payment that's held in trust by the government that's invested into the US total market that gets linearly released to them from the age of 18-30.
I also propose that we remove all consumption taxes that aren't a sin tax. Ie. keep taxes on alcohol, gas, etc. Implement a very high luxury goods tax.
Then completely change the medical system to be more similar to Singapore with mandatory copays of something like $20-50 (to prevent abuse), but also provide universal coverage with the government setting prices with pharma/providers.
Dissolve the ability of states to collect taxes and provide federal funding per head. Standardize/centralize all stuff like the DMV. Ie. have a single federal agency to de-duplicate work.
I don't think this stuff is viable at all (would require dramatic tweaks), but it'd be a very interesting thought experiment to see how something that tries to encourage business friendliness, the strength of the income earning population, and incentives capital effiency (over tax effiency) and investment does.
I really think that the fundamental market forces of capitalism are very powerful, we just need to change the incentives structure so that the benefits aren't captured strictly by the ultra wealthy.
>Removed corporate income tax (the idea being corporate income tax hurts all equity owners, whereas we specifically want to target the very wealthy),
I'd back this whole plan to a hilt but want to highlight this section.
I'm on board with eliminating corporate taxes under 1 condition: the company, its executives, and its board - are fully 100% banned from participating in politics in ANY way besides each individual citizen voting in normal elections.
Lobbying? Banned. PAC contributions? Banned. Campaign contributions? Banned. Hiring former government workers as "government liaisons" or "government relations" consultants? Banned.
If a corporation wishes to not pay taxes to the government, it has ZERO business involving itself with politics.
> What would lead one to conclude those would be the kind of "good jobs" everyone is envisioning?
They wouldn't all come back, many of them would be automated to keep costs down. Fortunately, this would also be good for us since automated systems require engineers to design them and technicians to maintain them.
I think that "good jobs" is a red herring for manufacturing jobs. The important question is whether they have positive externalities. According to one argument (which I'm reconstructing), working one manufacturing job improves dexterity and spatial reasoning, as well as motivating workers to learn basic math and science. These (may) continue to provide benefits to the economy after the worker leaves the position, hence being unpriced. How we manage this at a policy level is not obvious.
(OTOH, there is also an argument that manufacturing has an important negative externality — pollution)
To some extent, the pay rate for a lot of jobs comes down the available candidate pool for those jobs. The easier/simpler a job is for anyone to step into, the more likely it is to have a lower pay associated with it. As an addition, regarding service jobs, a lot of the times, you get what you put in... at this point, most customer service interactions I've generally seen have been poor at best.
Craftsmanship, pride in work, and just caring about doing a good job just aren't concerns a lot of the workforce has at this point. That's not to excuse efforts to offset employee pay into a forced tipping culture. Neither does it excuse efforts to use foreign labor as a lower paid under-class either... I think jobs for foreign workers should have pay floors that force them to be more expensive than domestic labor. If there really isn't a supply, or they really are that skilled, then pay up.
Part of the problem is the idea of fiscal duty has been tunnel visioned into what the next quarter looks like over anything resembling longer term health of a company and the communities they operate in. Not to mention VC corporations swallowing industry sectors and "extractive value" to the point those sectors collapse altogether.
Govt has largely sold out to corporate interests over the people's best interests and they are emphatically NOT the same... govt policy should be to encourage or even require competition in practice. Shared essential infrastructure should require dual/multi-sourcing with a healthy portion required to be domestically supplied as well.
I truly believe that it's in everyone's best interests to refocus beyond the next quarter, and I don't mean woke lip service... just actually considering organizational and community concerns. If we/they don't do it, communism will only grow and take over.
Every healthcare post: 'this isn't the biggest cost in healthcare' 'this isn't going to fix things'
Every jobs post: "this doesn't fix X" 'this isn't the biggest issue'.
And the republicans keep dog walking straight to their goals while we talk about the best arrangement for deck chairs.
Because nobody actually wants to talk about the core of the problem or how to address it. They see different, seemingly unrelated problems depending on what their priorities are. The democrats are also not on the side of actually solving the problem.
"We" have not "decided" anything other than collectively making decisions about what we are willing to pay for a given service. That ultimately is what sets wages. The only reason software development pays so well is because the market will bear it, and the market isn't some cabal of fat cats in top hats, monocles, and tails (or hoodies and Patagonia for that matter). It's the collective decisions of 330 million people.
The largest reason software development costs a lot is that a cabal of people had been desperately trying to lock out smaller companies from having access to software engineering resources at such a cheap rate and eventually get taken out.
I get that from another perspective your answer is also correct, but the reality is the large pay is really so that EA's blockbuster video game sells and a small upstart of 45 software people that want to make their own amazing game does not beat them. Those 45 people will take the paycheck rather than collectively start a game company now.
What happens next no one is sure, but I can tell you, that if the amount of cheap software surfaces because 1 man army companies take out TeamViewer, Photoshop, Jira, etc... because of LLMs - then those wages will drop, and drop fast and it has nothing to do with the 330 million people "having a say".
We make decisions through purchasing, yes.
There are also hundreds/thousands of elections annually through which we collectively set policy directions. Contrary to belief, politicians are responsive to voters over long periods of time. So over time, the policies that are continually ratified do reflect our collective choices.
And for at least the last several decades, yes we have collectively decided through our policy directions that there are classes of jobs whose holders are not deserving of material prosperity.
> What would lead one to conclude those would be the kind of "good jobs" everyone is envisioning
Your entire political statement aside manufacturing was always a good job. I’m not sure if you realize what kind of skilled labor went into manufacturing:
1. Machining 2. Tool and Die 3. Welding 4. Etc
Hell when I was working in construction I was making 20 dollars an hour at 18. That’s good money, and at the time if I would’ve stuck to it I would’ve been able to afford a decent life. My stint as a machinist while backbreaking at times was a good highly rewarding job.
Now, to address your political point. Yes, jobs should pay a living wage. Unfortunately even with such “wage suppression” America is still one of the most expensive countries to live in. We subsidize global food, drugs, etc. I can only agree with your point if we simultaneously become an export economy, and reduce or remove all global subsidy. But the party who supports raising wages also supports near limitless spending on the less fortunate countries. You cannot have both.
"The United States provides over 40% of the world's humanitarian aid, and spends around 1% of its budget on foreign aid, including military aid. Surveys suggest that Americans believe 20% of the federal budget is spent on foreign aid, and that 59% of Americans believe the government spends too much on foreign aid"
https://en.wikipedia.org/wiki/Executive_Order_14169
Wikipedia isn’t a primary source. Your entire point can be disregarded.
Your unwillingness to read the primary sources linked in the Wikipedia article because they show how you're flat out wrong indicates that your entire thought process can be disregarded at no cost.
https://www.euronews.com/2025/01/29/us-freeze-on-foreign-aid...
https://usafacts.org/answers/how-much-foreign-aid-does-the-u...
Literally every sentence of that quote has sources listed in Wikipedia.
Do you have a primary source showing that "the party who supports raising wages also supports near limitless spending on the less fortunate countries"?
> But the party who supports raising wages also supports near limitless spending on the less fortunate countries. You cannot have both.
Do they? Who advocates near limitless spending? Last I checked foreign aid was less than 1% of the federal budget.
It's about 1.2% in 2024 with 0.24% being Israel.
.24 of the 1.2?
I would have believed Ukraine to have been the largest.
I'm not sure wilder:
- $20/hr for hazardous work is "good money"
- your suggestion that we become an export economy, here on a forum where many people are working on products that will be purchased by the world but not counted as exports (examples of non-exporters who collect money from around the globe: Meta, Google, OpenAI, Anthropic, JP Morgan Chase, Citibank, AWS)
- the idea that the way to prosperity is for Americans to move back into lower-productivity jobs. (Here I ask you to look up the revenue per employee of Costco and JP Morgan and on the other hand good manufacturers like Steelcase and Lockheed Martin and Eaton. What do you think happens if we move the workforce from higher-productivity jobs to lower-productivity jobs?)
- your confusion of an economic point with a political point
>I can only agree with your point if we simultaneously become an export economy, and reduce or remove all global subsidy.
Would that not come with the end of the dollar as a reserve currency trough which the world essentially subsidizes american imports?
Necessarily.
What’s your point? Say everything you just said again, but with software engineering and Indians, instead of manufacturing and the Chinese, or textiles and Vietnam and Pakistan.
There’s no reason American cars need to exist either, they basically all perform worse dollar-for-dollar, feature-for-feature, than foreign cars.
In fact, let’s offshore everything. There’s no reason not to use Filipinos for McDonald’s and In-n-Out drive-thru speakers.
Let’s all adopt Chinese tang ping. Lay down and die. Treat every effort of labor as replaceable and void of respect.
If China and India wanted to wage effortless war with the US all it would have to do is stop exporting goods and labor to us.
Please read my comment again. This time, consider that our laws and regulations are not laws of physics or axioms of mathematics and are therefore able to be changed. The comment will make more sense in that light.
Ross Perot in 1992
https://www.youtube.com/watch?v=VRr60nmDyu4
We have shipped millions of jobs overseas, and ... a strange situation, we have a process in Washington where after you serve for a while, you can cash in, become a foreign lobbyist.
We have got to stop sending jobs overseas.
You're paying 12, 13, 14 an hour for factory workers and you can move your factory South of the Border, pay a dollar an hour for your labor, have no health care. That's the most expensive single element making a car. Have no environmental controls, no pollution controls and no retirement and you don't care about anything but making money.
There will be a giant sucking sound going south.
Indeed, this was one of the first things I thought of too. I remember well the jokes about Perot being crazy, frequently used to dismiss his views. I'll never forget talking with an educated Perot voter (a friend of mine) at the time and actually being confronted with the real views, not a shallow strawman, and realizing I didn't have any good answers because I hadn't actually thought about it. That was a good maturation point for me when I started realizing the power (and danger) of bubbles.
>I remember well the jokes about Perot being crazy, frequently used to dismiss his views.
Was he crazy or was he made to look that way as an excuse to dismiss his views? Sitting here in the 2020s knowing what we know now about "how it all works" it sure does cast a lot of doubt upon the past.
Isn't is similar to Carter being depicted as a 'weak president' because he had more progressive ideas than an average US president, which make similar amount of sense.. and hence best ridiculed as a threat to "greed is good" prevailing ethos.
He was depicted as weak because during his time an entire US embassy was held hostage in Iran for more than a year. Couple that with inflation reaching 14.8% and now you understand why.
Porque no los dos?
He was a super-rich guy, who had had too many people telling him he was a genius for way too long (reminds you of anybody?), and so was way too sure of himself. A bunch of his ideas were crazy, which doesn't mean others weren't trying to dismiss his views.
> A bunch of his ideas were crazy
Which ones?
btw young idealistic me voted for Perot in 1992
All shoe sizes should only be small, medium, and large. He really did have a lot of very ridiculous ideas. He also had a lot of extremely good ideas and incredible understanding of socioeconomic conditions.
His book “United We Stand” with modern context is quite amazing considering it came out in the early 90s.
I too would like to know.
The POW stuff was actual insanity
If you're interested and aren't willing to take OP's word for it, the 90s are recent enough that you can probably read contemporary news articles/opinions pieces about him online (and almost certainly at your library). You can also read up on his views/life on Wikipedia.
Powerful people like those who control both parties and our news media don’t tolerate outsiders. When you have the power any deviation from status quo is a threat. A side effect of this is that voters stop listening to the talking heads and politicos when they call some political outsider a dangerous loon even when that may be a valid point.
I’m not directing that last sentence at the president or RFK, but I’m guessing that’s the reason for the downvotes?
I had a similar experience when I learned about Ron Paul back around the 2008 election. It was also the first time I had my eyes opened to information suppression when Fox News edited some of his answers out of rebroadcasts of debates.
Same! I actually watched the debate live (on AFN) while in Iraq (deployed), and when I got home and got into discussions about it with friends I had a hard time believing we had watched the same debate. Turned out we didn't, they had watched the edited version. That was extremely eye opening
He was't crazy, just thin-skinned and not suited for politics.
The GOP/Bushes blackmailed him into dropping out of the election by using his daughter, threatening to out her as a lesbian right before her wedding. How thick a skin do you need for that?
My comment was more in general, not about any one event. Apparently he was also a conspiracy theorist and this whole thing about an attempt to disrupt his daughters wedding seems to be one of those, and he admitted he had no evidence.
> the jokes about Perot being crazy
I remember the debates around the time, though, and what most people said was that shipping manufacturing jobs out of the united stated would actually create prosperity here so that the manufacturing types could "move up" into less menial work. They're saying the same thing now, and although it _does_ seem that that did happen in the 90's when all the manufacturing jobs went offshore, it doesn't seem to be happening now.
One of my main arguments for a universal health care scheme in the united states is how horrendously expensive, for employers, health care is. Lets totally ignore efficacy, moral arguments, expense for the patient, etc. If you are a company in the US a large percentage of the effective compensation of employees is healthcare. A moderately good PPO is like ~$10k+ a year per employee. You can pay workers in some other countries less than just the cost of paying for health insurance for a US employee.
As someone paying for a family on a marketplace bronze plan, that’s a bargain! I think our premiums will exceed $20K this year.
With all of the medical group consolidation, all of the wait time woes our Canadian friends always complained about are the reality here now as well. So I’m paying more than anywhere else on the world and have to wait 6 months for a PCP appointment. We have the worst of both worlds.
I'm curious to compare this to other countries that have state owned/mandated insurance and are so far still mostly covering everything and which are always touted as "superior" to the US, who "have the most expensive health care system". Can't use Canada as OHIP et. al. don't cover much and the same employer tied insurance scheme as in the US exists and is necessary.
An example of a country with "good healthcare" and such a system would be Germany. Extra insurance does exist there as well nowadays from what I understand but health insurance isn't tied entirely to employment and the extras are things like a 20 EUR per month to cover the co-pay on large and expensive procedures. While private insurance exists there too, I want to compare to the often touted "free healthcare" i.e. public system. There are still different providers even under the one public system.
So from a quick search, Germany has insurance rates from ~14-16% of gross salary, half of which the employee pays from their gross salary. But most insurances have an extra percentage they charge on top. I found one as an example that charges 17.29% total, which if you're self-employed, you have to cover yourself (to be comparable to your marketplace bronze plan being entirely self-paid).
Now the question becomes: Are you paying more or less as a percentage of your salary and by how much?
(and side question for your parent I guess: how does that compare to the $10k the employer pays, which would be 8.645% in this example)
It is actually more complicated than this implies. For example hospitals are often held afloat by Medicare/Medicaid spending (25%/19%). Private health insurance is about 37%, so larger than either, but smaller than both. But then you have to remember that some of the private health insurance is being subsidized by taxpayer dollars (e.g.: the ACA subsidies), and that private health insurance is largely coming from tax exempt dollars (a form of subsidies). So where the costs are actually being paid is more difficult.
https://www.kff.org/health-costs/key-facts-about-hospitals/?...
I am not sure where your question about a percentage of your salary is valid on the face of it. Do you count the employer portion of your medical coverage as part of your salary? Do you count the tax exemption? How do you figure the taxes taken out to support Medicare/Medicaid/Veterans Health (all of which are required to support the system as it exists)? And how do you figure that for single payer systems?
So a much more direct way of comparing is to look at total costs per person, and then figure out how outcomes compare. When you do that the U.S. comes to about double the cost, and generally worse outcomes. Conservative politicians will scream about how long it takes to get procedures, but the research shows that elective procedures take about the same time (and no-one waits for emergency procedures in comparable systems).
https://www.pgpf.org/article/how-does-the-us-healthcare-syst...
That's a fair point overall but not why I asked.
I asked from an employee and cost perspective. So whether or not to count the employer portion depends on whether we're comparing one or the other. If you buy on the marketplace in the US, compare with the full cost in the example I gave for Germany. If you get insurance through your work the US/CA, compare with the employee only portion (as the employer pays part of the insurance there as well).
Theoretically it's even more complicated as at least in Germany private insurance also exists and is cheaper if you're a healthy single youth and more expensive if you're an older family ;)
But again, like you say, it is totally valid to also compare outcomes / wait times per dollar spent of course.
Canadian (OHIP recipient) here. As a long time employer, and former employee, I can tell you that no one takes a job here for the heath care. Some things like dental and vision are not covered (unless you are under 18, over 65, or low income), but everything else is. Over the course of a decade my father in law had 3 heart attacks, a stroke, and ultimately lost a year long battle with lung cancer. The total health care bill to him (or his employer) was $0.
Now the downside … because health care is free, everyone uses it and the wait times are longer. My grandfather recently required an MRI (non life threatening). The wait time in Ontario was 3 months. He drove to the USA, paid out of pocket, and had it done within in week …
> Now the downside … because health care is free, everyone uses it and the wait times are longer. My grandfather recently required an MRI (non life threatening). The wait time in Ontario was 3 months. He drove to the USA, paid out of pocket, and had it done within in week …
Imo, singapore solves this well, by ensuring that some cost is borne by the patient at point of use, but it's never anything excessive. No one goes bankrupt from emergency hospital visits.
> Can't use Canada as OHIP et. al. don't cover much and the same employer tied insurance scheme as in the US exists and is necessary
False. From what I know, only prescription drugs, dental, and vision are not covered. And since Americans frequently drive to Canada to buy prescription drugs, we can assume that's not as big a burden as in the US. But hospital stays, surgeries, lab testing, imaging, doctor visits, vaccines are all fully covered.
Fair enough, I guess I got carried away given the private insurance has to cover drugs, which would otherwise be covered by the provincial insurance (like OHIP), if you have it.
Private insurance also can cover a higher percentage, i.e. provincial plans do not always cover 100% of everything. Also, Health Care Spending accounts are in many cases part of private insurances and can be used to cover things that provincial plans do not cover at all (unapproved drugs et. al.)
And just for context … if medication is not covered and has to be paid out of pocket, the cost is generally under $100. Canadians don’t have $1000 medical costs
> provincial plans do not always cover 100% of everything
Like what?
Since we were using OHIP as an example: https://www.ontario.ca/page/get-coverage-prescription-drugs#... and following.
The first info about what's not covered for example is concerning diabetes. There's a limit to the number of test strips for example. I'm no diabetic, so I don't know if these numbers are "enough" or not but there is an actual limit. It also then states:
If you're a senior with "too much income" you also have co-pays/deductibles, meaning the coverage is less than 100% of the cost of the drug: This: https://www.vivahealthpharmacy.com/private-insurance-vs-ohip... too.I'll stop here but I'm sure this is both similar in other provinces and/or other limits may apply in specific cases.
Just to be clear: I'm not saying the OHIP / other Canadian insurance programs aren't great overall in comparison to the US. But neither they nor I suppose Germany's "full coverage" actually are in all real world cases.
This is all prescription drugs.
Correct. Which doesn't invalidate either your or my previous points.
I'm pretty sure the original 10+k/yr/employee for good ppo coverage is a radical underestimate, for what it's worth, though I guess "way more than ten" is technically part of the "ten+" range, haha.
The last time I had reason to look at full market-rate price for a family of four for a good PPO (Seattle market, circa five years ago, large tech company), it was around 3300 USD per month, or over $39k/yr. That was for cobra coverage, so a combination of what I would have normally paid and what the employer would've (about one third us and two thirds them when I was employed by that corp). I can only imagine it's gotten more expensive since then; we left the country three years ago.
I got the $10k a year employee from chatgpt with "Assume I have a company with 100 employees in New York, how much on average does it cost to provide health insurance" and it gave me poor, moderate and good ppo plan prices. I figure this seemed reasonable for ballpark figures from employer friends, so the numbers may be very well off.
Just as an FYI, that is a massive outlier based on available data.
My employees are about $500 per month in a major metropolitan area, and a family of 4 can run up to $2000 a month for the most expensive plans (I cover individuals and their spouses in full for standard plans, and could cover one dependent for basic plans).
I looked at marketplace plans in WA because I was curious, and it looks like it's about the same as where I am but nowhere near what you were quoted 5 years ago.
So the ~$10k a year is just what the employer is paying in my example, taking some numbers from chatgpt for a medium sized company in new york. Not even counting the employee side of the premiums, which can be crazy high as well.
The key part of your statement is that you're paying for a family.
Individuals do not cost $10k per year under any normal circumstances, and if you're paying almost $2k a month for a family bronze plan, you either have a lot of kids, you have some unusual needs, or you are getting ripped off. Even more so if you're waiting for a PCP appointment, because that is unusual as well.
> One of my main arguments for a universal health care scheme in the united states is how horrendously expensive
The costs need to be fixed, first. Moving to the government/taxes paying for it doesn't fix that.
> Moving to the government/taxes paying for it doesn't fix that.
It kinda does, bigger players have more bargaining power. There is no bigger player than the government in a universal healthcare system.
Furthermore, a significant cost in healthcare is all of the bureaucracy around billing. Much of that goes away with single payer.
It would be very tough to reduce pay for doctors and other staff. The United States medical industry is one of the highest paying in the world.
This is true, but frontline healthcare staff wages are only one part of the problem. For specifics you can see details here (e.g.: US average front-line healthcare worker salary: €74.450, Germany: €40.522):
https://www.qunomedical.com/en/research/healthcare-salary-in...
But even absent any movement there you have a lot of savings to be had away from that: 1. The U.S. medical administration costs have ballooned, in large part because of the highly adversarial billing system between insurers and practitioners. Medicare/Medicaid is much less (but not completely) unpredictable. Doctors complain bitterly about the prices at times, but the system is much more efficient. 2. U.S. insurance companies are woefully inefficient. To the point that companies complained bitterly when the ACA required them to pay out 80% of premiums as medical payments. Before that there were companies making more than 20% profits. The most efficient insurance companies today use about 12% of their revenues for non-medical care. In comparison Medicaid uses about 3.9%.
There are lots of other parts you could address as well: 1. Fraud drawn to the huge payouts for medical bills. If people's accidents were just covered as a normal part of life those payouts, and most of that fraud just goes away. 2. Malpractice insurance. This is like the first, but would mostly be solved by a combination of single payer and a working medical review system (seriously, what we have now is the definition of regulatory capture).
Wages for doctors and staff are not the cause of high medical bills.
The US spends something like $4.9 trillion dollars on medical care, and employs around 1 million physicians, 4.5 million nurses, or 9.8 million health care workers in total [1].
If this was paid out in wages the average health care worker would be make almost $500k/year. Compare that to the wage of the average doctor at $335k/year [2] or average nurse at under $100k/year. There is a lot of money in medical care that is not going to wages.
[1]https://www.census.gov/library/stories/2021/04/who-are-our-h...
[2]https://www1.salary.com/Doctor-Salary.html
Doctor and nurses are not bureaucrats. Single payer would significantly reduce the bureaucracy in healthcare, and simplify everything for citizens and businesses.
The main cost driver in medical care is provider (nurse, doctor, etc.) wages, not bureaucracy or drug prices (though they're frequently cited). I have tired of posting sources for the statistics, but they are very easy to find.
From what I've heard from doctors online, a large chunk of their time is basically spent just coaxing insurance. They waste time figuring out what they can and cannot bill, tailoring that to every patient, and constantly keeping records of everything. I think, for many doctors especially in small practices, treatment is a minority of their time.
Obviously, paying someone 300K a year to sit on a 1 hour peer to peer explaining why they think they should do a surgery is just bad business. But, we do it, and I think a lot.
Exactly. You can believe the "main cost driver in medical care is provider (nurse, doctor, etc.) wages" all the live long day, until you realize they too spend a lot of their time dealing with bureaucracy. The true cost of bureaucracy cannot be accounted for by simply tallying the number of bureaucrats and their salaries.
So, let's look at UnitedHealth Group; do they deliver health care?
If there were single payer, what would their role be in the healthcare delivery process?
Apparently they made 2.3 billion in profits on 113 billion in revenue in Q3 of 2025. How much of that friction would evaporate if they weren't in the healthcare delivery infrastructure.
Someone once said "the best part is no part" ?
Compare UPS or FedEx to USPS; the first two companies are profit-seeking, yet very competitive with the 'public-oriented' (and legally privileged) USPS. Having the government in control does not necessarily lead to better value.
I've lived in cities where the city ran the utilities; they were generally way cheaper than the utilities from PG&E.
The USPS is obligated to deliver letters at the same cost to everyone in the country, and they do a pretty okay job at it -- I've certainly had horrid events from UPS and FedEx, and those guys get to just pass the crap delivery tasks off to USPS if they don't like it.
Lots of old people in the USofA seem to like their government run medical insurance, same with people in the VA system.
The Doge crew spent months looking for fraud waste and abuse and I don't see any big law enforcement results from all the fraud they found, and I don't see anyone crowing over all the waste they curtailed.
It's possible that the world's more complex than you imagine, and that sometimes people just do their jobs (IE the bureaucrats) and hard problems get solved.
Now, tell me again, what part of the health care system is UnitedHealth? What critical problem do they solve?
They are very competitive in the places where most people live, but the USPS delivers to many more places that the others do not, and still maintains cost competitiveness.
This turns out to be a decent analogy to healthcare: insurance companies do not provide the coverage, universality and simplicity that a single payer system would; instead, you'll get something like insurance coverage networks providing spotty and inconsistent care.
Either approach has upsides and downsides, but single payer, universal coverage for basic and emergency healthcare seems like a no-brainer.
$2.3 billion is nothing in a $5 trillion system. Doctors make around $500 billion in the US. Their wages are much more significant than insurance profits.
Buddy.
That's 2.3 billion in ONE QUARTER of 2025, on a revenue of 115 billion. In a quarter. There are four quarters in a year.
$5 trillion is how much is spent in all of healthcare in the USA for the whole year.
UnitedHealth's revenue was $500 billion (and net profits is 10 billion) for the year. For one insurance company. There are 6 that each have more than $80 billion per year in revenue. This isn't to mention the billing departments for each hospital, the claims processing providers smaller doctors need to enlist, the endless hours interacting with insurance companies, etc.
And tell me, please, what specific healthcare outcomes are driven by insurance companies?
Insurance companies are instrumental in ensuring that useless procedures arent performed. Over use of service is one of the biggest reasons for inflated costs in our healthcare system. Now to be clear I would prefer a medicare for all system implementing that, but under m4a doctor salaries are still a major issue that need to be addressed.
Basically all healthcare spending in the US goes through insurance companies, Im not sure why you have a problem with that. Under m4a medicare would spend trillions a year, would you be complaining about that too? Large profits would be a problem, but that doesnt exist. Our healthcare system is rotten top to bottom, insurance is part of that but imo it gets way too much blame for existing in the system the government has created.
Insurance companies basically mirror the reimbursement policies put in place by medicare. I'm sure most providers would gladly take lower reimbursement from a single provider over the chaos and pain driven by insurance companies right now.
Basically every provider does not take medicaid so I suspect you are wrong about that. Again Im not happy with the insurance situation, I just think its barely top 10 in terms of problems with our healthcare system. The bureaucracy is required because of our horrible fee for service payout system. Without getting rid of that m4a would still requires an army of billers because republicans would constantly be screaming about the government being scammed(and they wouldnt really be wrong, healthcare providers do tons of wasteful procedures and the bureaucracy is the only thing slowing that down(recent example I came across, currently we wake up obgyn's to perform emergency medically required abortion services at the hospital even though abortions can be done with a pill and the nocturnist can safely oversee the whole thing, no need to wake anyone up. This is only done so providers can charge us more money. This shit is happening constantly over and over again every time providers can find ways to nickel and dime us and patients have no choice)). We dont actually need single payer to get rid of fee for service so really I think private insurance is an orthogonal problem to the billing army.
$2.3bn is profit after subtracting costs. Doctors charging time to deal with bureaucracy needed by insurance adds to the costs that are already factored into the revenue. Single payer wouldn't just eliminate the profit, but also those costs.
>The United States medical industry is one of the highest paying in the world.
Which the industry views as a historical accident, and now that they basically own all the hospitals and other companies, you can expect them to fix it.
I would expect neutering Doctor labor power will happen soon. This admin will get a small donation or two, and the republicans will insist that letting doctors have high wages is the sole cause of our expensive healthcare. They've never really cared about the truth, seeing as they have often claimed "Medical tort" is the cause of healthcare costs, even though places like Texas, which have limits of Medical tort payout don't have cheaper healthcare.
Medical tort is a large part of our bloated healthcare costs. The problem with these discussions is that our healthcare system is horrible and has many things going wrong, so both sides can simultaneously be right.
Asking as not an American - $10k per year, how much % of a yearly salary is it?
In Europe (here: Germany example), which is frequently seen here as the ideal example of healthcare spending:
Employees and employers typically split around 14.6% of gross salary for public health insurance. [1]
[1] https://feather-insurance.com/blog/germany-healthcare-statis...
The problem is that in the US it's a fixed amount vs in Germany a proportion of your income. This works OK for higher incomes but for lower incomes it's a big problem. And as always, the people in the middle get screwed. Not enough money to afford the premiums easily but too much money to get subsidies.
SO this is just what the employer pays. The employee then pays premiums monthly as well for access. Employers pay somewhere between $5k and $25k (or more) per employee a year for health care depending on quality and portion of premiums they pay for the employee. Usually its split, so someone makes $80k a year, they pay $10k a year in premiums, employer pays $10k a year in premiums.
> Asking as not an American - $10k per year, how much % of a yearly salary is it?
Depends on if you make 35k or 200k/year
The irony of the situation when you realize that you can probably get healthcare yourself in India (not sure about other countries) but for even a very good healthcare program to be around 25$ per month
And that 10k$/year can be considered middle class / heck I can even argue just slightly above middle class in India
And you can actually enjoy food and a lot of things really cheap as well
Usually the only problem becomes if something is inherently expensive (think college or land) which is where PPP does hurt but in everyday life, I think India's decent to live in.
Now I want to ask you but even if someone spends around ~$10k+ a year, even then I have heard people describe american healthcare subpar. Like why? Is it just corruption at healthcare level and lobbying efforts?
Is there truly nothing that the average american can't do about to make things better for the healthcare situation. To me its feeling like america's moving even backwards right now from cutting medicaid putting even more strain on the amount and still even on the average person themselves as well.
There is no simple explanation, but an important issue is that there is no price discovery mechanism or system pressure for efficiency. You also may not know that the US healthcare system is also an elaborate jobs program. Walk into any hospital and you will see 5-10 mostly young women doing basically nothing. I don’t know why the powers that be decided that the US should divest itself from any useful work, but here we are. Now we’re a couple generations into this social experiment by “smart” billionaires and their courtiers, and the military industrial complex is begging the Taiwanese to hold our soft hands and teach a blossoming generation hipsters and resentful immigrants how to build the computers we invented. We had a good run, but we’re Rome circa. 400-500 AD. Don’t let the marketing in Venezuela fool you. I’m just hoping the robots give us a few more decades of working plumbing.
It's like every other compliance cost. It hurts the little guys more than the big guys. Too much of the US economy is big players so the status quo persists.
"how horrendously expensive, for employers, health care is."
So why aren't they pushing for abolishing employer-based health insurance? They had no problems getting rid of pensions but for some reason nobody really lobbies for employers to get out of the health care business. The same for 401k. Why do companies have to manage those instead of just contributing some money and let the employees find the right package on the open market?
It's really weird.
Union employees have negotiated healthcare into long-term contracts, making it hard for those employers to switch. (Feel free to read up on so-called "Cadillac plans" during the original ACA negotiations for more details). The size of this market makes employers exiting a non-starter IMO. Any org that wants to exit will see a huge resistance to this change even if they can showcase all the common benefits.
Because if they let employees manage their own retirement accounts some of them would gamble all of it on crypto or options and lose it all. Then, because our society has become fundamentally incapable of saying "You are an adult. You have nobody to blame but yourself, and now you will face the consequences," this will become someone else's problem to pay for it.
>Because if they let employees manage their own retirement accounts some of them would gamble all of it on crypto or options and lose it all.
This part is true.
>Then, because our society has become fundamentally incapable of saying "You are an adult. You have nobody to blame but yourself, and now you will face the consequences," this will become someone else's problem to pay for it.
Except that's an incredibly stupid short-term way of thinking. Because regardless, we end up paying for people's mistakes. As we should, because that's the whole point of society - we need to take care of the failures, the degenerates, the pieces of shit, etc because they play an important role in society - they too are humans and some of them weren't gambling away their savings out of a sense of fun, they did so to be able to continue to live in a day and age where costs continue to skyrocket, job growth is negative, and the economy is being hollowed out. We have many tools and mechanisms to help the winners in society. We need that for the opposite party, too. In winner-take-all capitalistm, the losers will always outnumber the winners. And you need to make life palatable for the losers, in hopes that their luck may one day change. Because if you don't take care of people who continue to lose and have nothing going for them, they will grow in numbers and eventually eat you.
And besides, we've bailed out enough bad actors in important sectors of the economy that main street deserves to be taken care of too.
Someone will always have to pay for it, because we don't generally just let people die. And even if we do, someone still have to scrape their rotting corpses off the street, no?
Radical individuality is an illusion. Yes, it would be nice if everyone could be solely responsible for paying for their healthcare or retirement. But is it possible? If you can't answer if it's possible or not before you do something, you probably shouldn't be doing it.
It's a price to, in a way, handcuff workers. Systemically combined with policies that make sure unemployment doesn't get too low, weaken labor power, tie other benefits to employment, etc. Workers know they need your job to have affordable healthcare, so they have no choice but to stick with it even if it is somewhat crappy.
And yet they never lobby for nationalized health care.
Because "Deal with our illegal, immoral, or stupid work requests or literally lose your healthcare" is such a massive bargaining chip for them.
They would rather spend more money and have more docile and controllable workers, but not spend that money on paying workers more to be docile and controllable.
It's not about the money.
We almost do. Employers must provide insurance. If you’re unemployed you can probably get Medicaid. We have private entities handle the details instead of something that looks like the Post Office. There is nothing anyone in Congress can do which results in all 8 billion people on Earth having instant access to all conceivable treatment in any location the the US. Like socialized medicine, there is no meaningful price discovery mechanism in the US. Unlike socialized medicine, it’s a lot harder for political parties to conduct pogroms by rationing resources and euthanizing demographics that don’t vote the way they like.
Not sending production to the place with the cheapest labour is great way to have your companies being outcompeted by foreign actors. Unless we want to return to mercantilism a global empowerment of organized labour globally is the only real way to fix this.
This assumes that leadership has a vision beyond the next quarterlies. Offshoring is seen as a solution to organized labor, unfortunately.
Exec compensation above a reasonable salary needs to to tied somehow to longer term outcomes.
Any executive in America can probably have a vision if they so chose. Their hand is forced by "the system".
The Weathertech CEO (or maybe I'm misremembering, in any case it was a big private company CEO) has a good talk about this IIRC.
The only reason offshoring is ever done is because leadership does have a vision beyond the next quarter. Offshoring takes years to pay off because of the upfront costs and time it takes to work out how to run the new operation efficiently.
Forgot the whole crux of my point. Labour needs to be empowered globally, to minimize the benefits of offshoring.
If your plan relies on total coordination of the the entire globe you have no plan.
I guess, but the real issue here is that capital will mount a concerted, decades long effort, to prevent global organization of labor. Its not like its per se impossible to get enough global labor organization: its just profoundly, aggressively, even murderously, opposed by people who have power.
I guess we could think of that as just "part of the reality," but I think its a little silly not to at least mention it.
It is not realistic but even worse it isnt even desirable. There is huge swaths of opposition to "global organization of labor". The last thing you want is to oppress a bunch of people under your vision of perfect government.
I don't see how mass organization of labor constitutes an oppression of anyone.
Labour is still going to be cheaper in offshore countries simply because of purchasing power parity.
Even good conditions and everything in country like India paying them around 10-30k$ is seriously really really good (source: I live there) and its english speaking and well integrated etc.
I saw another comment which mentioned that just merely healthcare in america can cost around 10k$/year
So Labour should be empowered in a good way but this idea still won't help america simply because of power purchasing parity.
Not to forget that America is going through some really tough economic crisis right now which it needs to figure out on. The deficit is still high and everything and companies are favoured completely capitalistic and so combined with all of these factors, we really come to the situation where it is.
I appreciate your optimism but I have my doubts. Especially when one reads the tense atmosphere of America right now
I think it's hard to overstate how big of a deal "Labour needs to be empowered globally" is.
Think of it as two huge reservoirs of water, one of which is at a higher altitude. If you connect them with a pipe, they will inevitably tend to equalize - this is what is happening with globalization. It's good for the developing world but bad for the developed. The labor class not only needs to demand better working conditions, but also standards of living, environment regulations, housing, etc. etc. until equilibrium is reached. The owner class will be exploiting the difference until that happens.
I doubt that an equilibrium can ever be reached tho.
The biggest issue is that even if one provides better working conditions, but also standards of living, environment regulations, housing, etc. etc
Even then, there would still be an imbalance and equilibrium would still not be reached simply because of power purchasing parity and other factors.
Plus another issue is corruption. There are rules and laws already in place but corruption takes their way
Also another thing but corruption can actually also take regulations and hijack them and actually penalize things simply for reducing competition etc.
Corruptions also the reason why we have enough food to feed the world but corruptions in the way and I am not sure if there is a way to solve it
y'know I have this pet theory that corruption is everywhere but the incentives of corruption/ways changes.
In the UK, the prices of rent are so damn high, this is a developed country.
In America, corruption takes place in the form of lobbying and the coupling of politics and finance and also the immense parity of money between the average person and the CEO salary's ratio being one of the highest and the shrewd incentives being one causing these issues in the first places being written almost in law, CEO's of major companies will fire 10_000's of people or more in a blink of an eye.
China, although secret, In my opinion has corruption inside the country as well from a more political standpoint as well
In India, there are some regulations and systems meant for good but people skirt through them via corruption.
So I don't know but to me corruption feels natural in the sense that altruism can't be the only gene and biology would dictate maliciousness to be present
This does make me sad thinking about it but I think that the nash equilibrium is unfair. This is how the system works, this is a cycle and Countries Like India/China once were super rich then became poor then are getting on their path again
At the end of the day, the person speaking about this Jensuan huang is corrupt as well selling AI hype in the first place, spiking actual prices of actual goods people buy thus contributing in inflation but also that some people accuse them of even writing this statement as a way to people please
When I had thought about it previously, I think um the best things we can do is probably reduce the incentives of corruption and then the nature of good ideas would take prevalance.
It's also just not a developing vs developed countries thing anymore as I said. We see in the news cycle how much blatantly corrupt America's current administration is becoming.
At the end of the day, facing reality is hard but that's the only way we can really put real change in the world.
if you have some thoughts about how to counter corruption in your idea/ actually creating incentives to be good and not corrupt or even malicious compliance in your idea and I am listening and I'd love to discuss more about it.
I wish there was less corruption but I am starting to think that incentives are set this way to help corruption and those themselves might've been/were brought by corruption themselves as one wrote on HN once that corruption brings more corruption , so how can one stop this vicious cycle? Because if that happens, I am telling you that America has enough money but the corrupt forces distribute them in a concentrated manner, even solving that problem to me feels like something which can help empower the labour globally
perhaps the rich can be taxed for what they deserve and that money can then be spent in developing countries labour class in your idea? This to me feels the most okay way to help but the problem is, nobody's taxing the rich/its hard because of all the loopholes/malicious legal compliance in many places.
I don't have any solutions unfortunately but I appreciate your considered response!
> companies being outcompeted by foreign actors
I've been hearing this since the early 90's, and I'm still not seeing any evidence that it's true.
> Not sending production to the place with the cheapest labour is great way to have your companies being outcompeted by foreign actors.
Or it's a great way to spur innovation in automation, which has other beneficial downstream effects. This is what people always seem to forget to consider, and I don't know why.
The world has seen dizzying levels of innovation over the last 100 years. It’s STILL cheaper to outsource for huge swathes of manufacturing.
Sure, because of legislation. And legislative changes could undo that advantage and thus spur more innovation.
That's like rich people threatening to leave if taxes are raised. It's always a bluff.
And, the cheapest labor is slave labor like Dubai and the US (via prison labor in current use by multiple major corporations) use already. If there's no floor of standards, that creates perverse incentives and ridiculous instability.
> Not sending production to the place with the cheapest labour is great way to have your companies being outcompeted by foreign actors
This is is a fallacious argument. Most or even all of those places couldn't have hoped to out-compete the domestic companies without the traitorous companies shipping complete factories to them. The reason the Soviets didn't outcompete us wasn't down to just incentive structures (though that was part of it), quite alot of their failure was down to being locked out of the market on machine tools.
> traitorous companies shipping complete factories to them
https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.
Basically, A company is bound by legal precendence to focus on capitalistic gains. It would be better if we argue the existence of other structures/their prevalence but I don't think that we can blame the entire companies but the darn structures that they are in
A CEO makes 100x (yes its not becoming hyperbole, sad reality) than workers. He is given power and he is given incentives to cut money wherever he can. He sees off sourcing and does this.
But I am not seeing America go towards a path like this, on the contrary, we are seeing America try to actively talk about workers in here and then talk about businesses without doing anything about all the issues in the first place.
There is a fundamental conflict of interests and America's promising both sides. It honestly feels political to me now because the news cycle for America is moving so damn fast (which is really really bad) that nobody comes to question these things in the first place or most aren't because they aren't literally having the time to do such with all the news cycle imo
I don't really know what America can do at this point.
> This is is a fallacious argument. Most or even all of those places couldn't have hoped to out-compete the domestic companies without the traitorous companies shipping complete factories to them. The reason the Soviets didn't outcompete us wasn't down to just incentive structures (though that was part of it), quite alot of their failure was down to being locked out of the market on machine tools.
Do you have any sources for this, I found it quite fascinating that machine tools can play such a big impact.
If it is, is it a sort of chicken and egg problem where machine tools require factories themselves which again require machine tools. If so, why couldn't Soviet Union just import some from other countries to bootstrap the production of tools which could then bootstrap all factories?
This just comes down to their incompetence. They were communists so they refused to just let thousands of domestic companies start up to produce the machine tools domestically to solve their problem. China did.
You might disagree, but that does not make it fallacious.
It’s true that American companies have benefited from sending jobs overseas. Instead of trying to stop them, perhaps we could explore ways to share this money more fairly across the country.
Everyone in business seems allergic to "pay domestic workers living wages and provide flexible working arrangements with good work life balance" so we will only arrive there through politics, unions, and structural labor shortages as the prime working age population cohort continues to shrink, imho.
Honorable mention to Senator Bernie Moreno of Ohio for introducing legislation to tax outsource payment flows.
The HIRE Act: 25% tax on outsourcing - https://news.ycombinator.com/item?id=45161419 - September 2025
Ohio senator introduces 25% tax on companies that outsource jobs overseas - https://news.ycombinator.com/item?id=45146528 - September 2025
(US centric perspective)
> Everyone in business seems allergic to "pay domestic workers living wages and provide flexible working arrangements with good work life balance" so we will only arrive there through politics, unions, and structural labor shortages as the prime working age population cohort continues to shrink, imho.
I think its because I suppose we can either talk about small businesses who can be very cost cutting because their overall profits are very thin (you really can't blame them that much I think)
And the medium to large corporations either take Venture funding and want to cost cut to show more growth or maximizing share holder profit
https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.
(taking an short summary from ddg AI)
The case you're referring to is Dodge v. Ford Motor Co., decided in 1919, where the Michigan Supreme Court ruled that a corporation must operate primarily for the profit of its shareholders, rather than for the benefit of employees or customers. This case is often cited as a foundational example of "shareholder primacy" in corporate law.
This is the root cause of the issue.
Do you know that there is a solution to it
They are called social enterprises and there are legal frameworks to do that. You might've seen some labels given by independent parties to show that as well
So they exist, but nobody creates them, why?
Because, its insanely hard to raise funding in them compared to the average structure. I looked up into it and the system of funding is just created such way where it rewards any and every cost cutting
I think that just like non profits get good value from doing good. A middle way where a company's purpose becomes some aspect of social good and not entirely profits. This might help but we need govts supporting them (similar to perhaps even non profits)
I have a hypothesis that if you provide easy access to lower interest loans with less collateral overall (perhaps even none?, provide micro-grants perhaps) at a federal level/banking level might be the best way to really start up some new innovation whose idea is social mission
Most people have an idea of enough, I think that academically inclined people who create companies would really appreciate this and this could even include the creation of things like google etc. which really just turned evil from dont be evil because of the wiki link/case that happened imo
Taxation as you say in the 25% tax won't really work that well imo as we saw recently in the tax scandal recently in America where billions were lost.
Although so much of US especially its politics is so much lobbied etc. that I find the idea of this change just stopping because it could prove a real threat to the completely capitalist corporations which will fire 1000's of people in an instant
Also whenever you position something as tax, the capitalist forces would find ways to evade it anyway, here let me give some ideas on top of my head
What would happen if people paid outsourcing companies via stablecoin crypto, how would you tax that?
What if things like this can count as gig work and laws related to that?
What if an outsourcer creates their own mini company and such creates an invoice, I am not sure but this would be considered a service so how would that work, is there a service tax if so how much %?
Suppose somebody got a consultancy company to work on a project and then just created the project end to end and deployed it and just tweaked it enough where its a mini saas designed just for that company, the company/consultancy can argue its a saas, so how would the taxation work for saas. Are we gonna reach a point where even things like saas could be highly taxed?
The easiest way seems to me crypto for (bootstrappable outsourcing?) but depending upon the size of the outsourcing, they can employ multiple methods as I gave.
How would the govt approach the multiple loopholes as such?
The whole issue stems from a pure capitalist system where it sometimes rewards to do malicious things so long term, countries need to find ways of supporting social entreprises/funding them.
We did, by lowering prices and returning shareholder value.
If we had some tariffs that somehow just canceled out the exploitation (of people and the environment), that could be interesting. “Stop sending jobs overseas” is too blunt, create a fair international market and let winners win.
But, I don’t think anyone is naive enough to propose such a thing seriously. It is impossible to believe that some administration wouldn’t use it for political favors.
> create a fair international market and let winners win.
Why? It's selfish, but since the US and EU sent jobs out to India and China. India and China, have created protections that make getting those jobs back nearly impossible short of stopping payments. At the same time, these countries have huge trading imbalances (see FR complaining that their CN trade imbalance is untenable) and have become the defacto for cheap labor.
I’m not sure what the “It’s selfish” part means, did you leave out a suggestion of some selfish action you think we should take?
I’m hoping that free markets tend to produce winners more often than protectionist ones. I don’t really want stagnant US companies to just stick around because they cozied up to the government.
Side point about this HN post "Jensen: 'We've done our country a great disservice' by offshoring" currently 3 hours and 129 points
Why does it seem like it is getting pushed down relative to other posts that have less upvotes and with longer times?
Here are some posts that are currently higher ranked.
https://news.ycombinator.com/item?id=46445412 currently 8 hours and 82 points
https://news.ycombinator.com/item?id=46465493 currently 4 hours and 29 points
https://news.ycombinator.com/item?id=46497589 currently 5 hours and 82 points
It does not make sense unless some force is pushing the Jensen post down, or the other posts up?
Doesn’t HN have some system for lowering threads that have, like, acrimonious voting patterns? Under the assumption that they are producing more entrenched argument, instead of informing discussion.
The dignity of three presidential candidates who disagree with each other, sitting quietly while allowing the other to finish using their allotted time…
And yet the timeframe Huang mentions does not go beyond 20 years ago, indicating his statement is little more than political posturing.
Also, last I saw, he wasn’t prevented from speaking at any point in those past 2 decades and I don’t remember any mention from him about these issues despite the fact that there’s been bipartisan concerns about manufacturing in China for at least a decade.
It’s almost like he’s trying to position his company’s profit growing enterprises as a part of helping the poorest Americans to justify the U.S. taxpayer paying for a lot of it, or at least assuming all downside risk…
Who would've listened to (or even knew about) Jensen Huang before ChatGPT?
>And yet the timeframe Huang mentions does not go beyond 20 years ago, indicating his statement is little more than political posturing.
20yr ago you could at least plausibly lie to yourself and say that things were ok. The seeds were sown back in the late 60s early 70s at least. Fair amount of gas was put on the fire in the 80s.
I voted for Ross. Sad he didn't win.
Fatten up the pig, then carve it can you fatten it up again?
American leaders lost hope in Americas ability to build the future. They decided this was as good as it's going to get and squoze the people at every level with unproductive IT, bureaucracy, consumerism. This country doesn't have a workforce capable of building the future anymore, it's dropouts and druggies the lot of them.
He is not causally connecting "AI" with industry and manufacturing here. Building data centers isn't manufacturing. He says in this piece that energy production needs to come first, and manufacturing later and not the other way around. Is he saying that AI will require building out energy production and the increased energy production will be used for... manufacturing? But it'll be used for the data centers.
What, exactly, is the kind of manufacturing he's envisioning AI will bring? He's not saying. Is it perchance weapons systems? It's weapons isn't it[1].
That will only make sense if we go back in time a few decades and some assholes instigate more wars and global destabilization, because manufacturing weapons and stockpiling them is pretty pointless and resource ineffective otherwise. We know this from before.
Or is he saying chips? So is he against offshoring all chip manufacturing to TSMC? That's basically been a huge part of continued security guarantees (if you can call them that when they are unproven), and also he's Taiwanese isn't he? I don't get it.
Now, one of my errors here could be that I'm trying to make sense of the things Jensen Huang says, because he rambles incoherently quite a lot, after all, to such a degree I am not sure he's "entirely there".
[1]: https://www.war.gov/News/Releases/Release/Article/4370464/se...
I don't know about Jensen specifically, and I can't remember the guy at the moment, but there have been a few tipped hands including one where the guy on national TV said something about "Americans should be gluing the iPhones together in the factory, not Chinese" and it really made a lot of this stuff click for me: they want to provide low-paying American jobs in American factories. That's probably not the whole vision, but it is a big part of it IMHO. I'll try and find the quote or video but if someone else remembers this, please share a link
That was Howard Lutnick. He's said a lot of, let's say "out-of-touch", things. He's not living in the real world, though.
Motorola tried that not too long ago. Didn't go well. If you want to decimate American wages, you could do it, but if you at the same time deport people who were the most ready to work for a pittance, it's going to be hard to do this without riots. Then again, Stephen Miller wants those riots, so maybe you're right.
The crux of the matter is that those workers won't be able to afford the iPhones they're assembling, however.
Howard Lutnick is "in charge," real or not it's his world we're living in. ;-)
Despite their belief to the contrary the executive branch is in charge of very little in this country. They are harassing and extorting in legally dubious and often outright illegal ways, but companies and institutions and individuals are getting wise to the fact there’s very little power these guys really have because the law is structured to prevent executive abuse of power. All you have to do is get your suit filed and get a stay, and sooner or later the governments case likely falls apart. It’s frictionful for everyone involved and will sooner or later cause serious damage to the economy, but increasing as the initial shock fades, everyone is realizing the president is fairly weak and his antics and his hand picked but of loonies undermine any power they might have. It’s not Howard Lutnicks world, and as time goes on it becomes less and less so as they squander the reputation of the presidency tilting at windmills.
The old chestnut that Henry Ford didn't actually say comes to mind though: "I wanted to pay my workers enough so they could afford the cars they were building." If they were making them in the US, Tim Cook could pay them enough to afford an iPhone on a payment plan with Verizon or AT&T. Even if he didn't want to, there's a federal minimum wage US workers employers are required to pay. What's frustrating is the investment Apple made in China is double the size of the Marshall plan the US invested in rebuilding Europe after WWII. That money could have been spent on America, but Steve Jobs spent it on China instead.
> That money could have been spent on America
This is wishful thinking, and similar to how how video game producers think if they stop N people from pirating a game, there will be N more copies of the game sold.
No, instead of that the game will be played less. And analogously, less iPhones would be produced.
You could argue that less iPhones would be good for the world, but that’s orthogonal to the topic.
IPhone production cost in China is between $10 and $30 per item. I believe a factory with US-level wages would not increase its price but it would definitely decrease Apple's profit margin.
You're overestimating the proportion of the price attributed to labor that goes into an iPhone. The reason that production is offshored is to shave off a few percentage points. The price difference is almost nothing to the buyer, but a lot to the owners of Apple.
iPhones have nothing to do with videogames. They are material objects, not zero marginal cost copies.
edit: and the point is that, across the economy, it is very good for labor. While the iPhone's cost would rise a little bit nominally, it wouldn't rise as a portion of income, which is the only important number. The retail price would probably rise a bit more than that, but that's because it is a luxury good and its price would rise as incomes rose.
> price attributed to labor that goes into an iPhone
Oh, that was not my point at all.
It's that we simply do not have the scale and manpower to do it. Maybe in ten years with more automation sure, but definitely not in the Steve Jobs era.
Interesting take. I would happily give up my iPhone if, instead, the US Department of Education got an extra $55 billion/year and US would pay people to go to college.
US pays people to go to college, but just the outliers.
It's an interesting tradeoff, make the outliers the best in the world at what they do, or make the average person slightly more competent.
I think it's difficult to design a system that makes both outcomes true at the same time. The countries that have succeeded in doing it so far have a tiny population compared to the hundred millions of students US/China/India has now.
China seems to be slowly moving to a system comparable to the US one where outliers are prioritized. India has avoided it so far, which is why we see so many generic software engineers from India. I wonder if that stance will change with that category of jobs rapidly shrinking.
> The crux of the matter is that those workers won't be able to afford the iPhones they're assembling, however.
Of course they will, Americans banks and “tech” companies are always coming up with creative ways to extend shady lines of credit to the poorest Americans.
You have one of 3 choices here:
1. Low paid American workers glue iphones together in sweatshops
2. Low paid Chinese workers glue iphones together in sweatshops
3. Well paid American workers glue iphones together in sweatshops, and to make this possible we have a massive tariffs regime that makes consumer goods massively more expensive and massively increases the price of all manufactured goods.
Pick your poison. They call economics the "dismal science" for a reason.
Chinese workers are not "low paid" relative to prices of goods in China though. A Chinese worker gluing an iPhone together can afford a decent middle class lifestyle, the Chinese version of the "American dream".
What America really needs is massive deflation in the cost of everything, curbing income inequality (which is driving inflation) and moving to renewables (cost of oil/gas also drives inflation).
Deflation is never going to be allowed to happen even if economic conditions allow it. The reason that the Federal Reserve wants inflation at ~2% is so that nobody hoards cash in their home and instead spends it before it loses value or puts it in a bank to lend to the economy or invests it. Deflation would mean that you could hoard cash and it would grow in value, leading to less money available for economic growth.
>> Chinese workers are not "low paid" relative to prices of goods in China though. A Chinese worker gluing an iPhone together can afford a decent middle class lifestyle, the Chinese version of the "American dream
I'm pretty sure this is what Apple wants you to believe, while Chinese company offers minimal wage for workers who assemble phones. One could never afford a decent lifestyle on a minimal wage.
Yes, and a big part of the reason labor costs are so high is that living costs are high. The US worker is saturated with debt, fees, payments, rents of every stripe.
If the US minimum wage is what we have agreed is the minimum amount someone should be paid to have a reasonable quality of life (and it can be argued that it is still too low), then number 3 is the only ethical choice.
>and it really made a lot of this stuff click for me: they want to provide low-paying American jobs in American factories.
This isn't a fair characterization. The people on reddit who complain that the coffee place is only scheduling them for 10 hours a week and that people are being stingy with the tips might actually prefer the factory job with a regular 40 hours, occasionally mandatory overtime, and $5/hr more than what Starbucks offers. If you disagree, then I suspect that there's no universe possible where you're satisfied without the population of the United States being cut by three quarters.
the price of metal, raw metal, coming out of factories like aluminum, steel, titanium is high because the cost of energy is high.
I think it’s 30%-40% the cost of smelting it. Unless you can drop the price of energy and cheapen the raw material cost, the entire manufacturing industry will be uncompetitive.
Primary smelters currently run pretty efficiently but are bottlenecked by two main factors in the USA: raw energy prices and regulations. (there’s likely some modern process improvements they could add too but those won’t increase productively as greatly).
To reduce energy costs… you’ll need about double the current energy production we have today. That sounds like a lot but it’s very doable (the US has been neglecting itself for 50 years). It could with a little push from the Government catch up in 10-15 years, think lots of nuclear and solar.
Bringing energy costs down. I see. While I'm not super well-versed in the US energy market, and I understand it's a bit complex, I do believe it's a mix of regulated and deregulated private monopolies under a bunch of regional ISOs, but there's an energy trading market down there somewhere setting spot prices, correct? So are you saying the US energy market should be, if not fully re-regulated, regulated harder, or perhaps abolished and everything should be brought back to being state or federally run (I'm not sure the US ever had that)?
It is not always in energy producers' interest to have really low energy prices, after all.
There are still a few regions that are fully vertically integrated and fully regulated with no market prices. However, much of the US is under a regional ISO that sets hourly day ahead prices and 5-minute nodal spot prices. Under an ISO the utility still handles distribution and often transmission, but generation decisions (like when should I turn on my plant and what should my output be) are handled by the ISOs optimization auction based off various inputs from the generator such as costs and constraints.
In theory, this ISO setup has saved untold millions of dollars (probably billions), by operating the grid regionally in a much more efficient manner than in the days of old. It is hard to tell though as you can't do a direct comparison very easily. The economists certainly like the price signals though, but there are numerous issues.
I believe you have it right. In theory, power generation should have been a well-regulated monopoly. Unfortunately, as soon as you add investors, aka rent seekers, the system is pushed to increase profits at the expense of the customer.
We should reset the monopoly by publishing and documenting tariffs for power and carriage. Third-party power suppliers should still have access to the power grid, with complete, transparent, and understandable costs for consumers.
There needs to be a plan for continual upgrades and maintenance, rather than starving the grid and then requiring big bursts of funding that go in part to the rent seekers.
From personal experience the closer to a regulated monopoly an industry is the worse its products are and the customer service is nonexistent.
I see you've dealt with Comcast and Verizon.
Snark aside, let me remind you of the term "enchitification": it came about because companies in theoretically competitive markets make good products shittier.
Same with my experience, PG&E burned down my mom’s entire hometown.
>To reduce energy costs… you’ll need about double the current energy production we have today.
I'm worried that if we were to double energy production, all of the new surplus would be soaked up by data centers.
The entire point of producing more energy is to consume it. A surplus of electricity on the grid is actually a bad thing that needs to be dealt with.
>The entire point of producing more energy is to consume it.
If the point of producing more energy is to produce more products, and instead it gets gobbled up by idiots giving us the next crappy phone app that runs in the cloud, then it's not me that's missing the point si it?
All those computers in the data center are just as much products as anything else. If you don't like the apps, by all means don't buy them.
>All those computers in the data center are just as much products as anything else.
Sure, and if they were cranked out of American factories, that'd be awesome. But since they're shipped across the Pacific on a boat, they're not really the kind of products that help.
>If you don't like the apps, by all means don't buy them.
If apps are all we get out of doubling power production, then I'll do one better and we'll just not double power production.
Of course. It's ok to double power production for things you want, but not for things other people want.
> It's ok to double power production for things you want,
For things that strengthen our country's economy, and provides a future for Americans, sure.
For some internationally-owned corporate conglomerates to churn out more brainwashing software garbage, no, I don't think me or other voters should give any support for that.
Manufacturing means, realistically, bootstrapping the general purpose robots that will foment the “third Industrial Revolution”, which will revolutionize capital and make money largely irrelevant. Energy, materials, and automation are the only relevant factors for capital in the post-employment era.
Oh yeah, I also like post-scarcity SF like Iain M. Banks. Funny names for those ships, right? So we're betting everything on infusing humanoid robots with "AI" and abundance will automatically follow? I'm missing a lot of steps here inbetween. Will we live in harmony or will it be a massive scramble by the various nations to extract every single piece of natural resource by way of PvP? Oh right, the robots will fight. It'll be like that ancient robot-fighting show. We'll have that show too, but it'll be AI slop now, and it'll be entertainment for the robot warfighters while they charge their batteries.
Can't we just make the billionaires buy everyone a robot from China instead? Oh wait, their money will be useless in a post-scarcity society and they will just be like any regular Joe. Wait a minute. That seems like a massive conflict of interest. Hmmm.
> Can't we just make the billionaires buy everyone a robot from China instead? Oh wait, their money will be useless in a post-scarcity society and they will just be like any regular Joe. Wait a minute. That seems like a massive conflict of interest. Hmmm.
Dude it’s all good. Just snort another line and fall in the techno-delusion.
> The largest segment of the economy is manufacturing. And we’ve offshored that for too long. For 20 years. We got to bring that back.
Lie. The largest sector is Services at 70%. Besides, if it were the largest how can you also say it is offshored and needs to be brought back?
Indeed - some relevant charts: https://nitter.net/BasilHalperin/status/1908550146889257180#...
https://x.com/BasilHalperin/status/1908550146889257180
The counter point here is that the US and EU have benefited with a lot of economic growth in the past few decades. The fact that this growth effect has now run its course just means that things may need to change again and that old assumptions may need to re-evaluated. Which might include looking at strategies to re-shore.
Not because off shoring was a mistake 40-50 years ago; but because technology now enables automating a lot of the type of jobs that we off shored. I'm referring to robotics and and other innovations in manufacturing and assembly that reduces the amount of cheap labor needed and calls for higher skilled labor that the west can still provide.
The higher cost of skilled labor can be offset against the also substantial cost of shipping. A typical car from China costs between 1-2K $ to transport. And that's of course before tariffs. Also shipping is slow and building locally means faster delivery of custom orders, which is another thing enabled by modern manufacturing technology. There are many valid reasons to re-shore and re-thinking supply chains.
The Chinese are moving ahead applying the same kind of technologies in e.g. automotive than many other manufacturers with the exception of maybe relatively new companies like Tesla and Rivian that have embraced a software intensive approach to cars already. And that includes spinning up BYD plants on different continents. Compared to a BYD factory, GM and Ford look like they have a bit of catching up to do. Their lack of competitiveness on the international market has a lot to do with the fact that they failed to modernize their businesses. Also, they seem to be repeating their mistake of the nineteen eighties when the Japanese kicked their behinds with better cars and more modern manufacturing. Their reflex to blame the Japanese, Koreans, Chinese (or whomever) for their own failings is not a great one. It's going to yield the same result unless they change.
What growth?
A bunch of assholes in offices (edit: and a handful of C-suite above them of course) got rich on RSUs at the expense of the entire rest of the economy. The factory shut down and all those workers are getting screwed driving for some gig service or order picking for ecommerce or whatever.
Number go up only matters if the number going up is strongly associated with things getting better.
And it didn't even necessarily get better for the asshole in the office. A few of them won but most of them can't afford to live within an hour of where he works, have a family, etc, etc.
Whole lot of good it did us.
> What growth?
You can get $15/h jobs and cheap, giant spyware TV’s now. Are you not impressed with your bread and circuses?
I do think that we have built ourselves the perfect circus. An Elaborate labyrinth of internet doom scrolling for many which is hard to get out of.
Real change feels out of the way so of course people forget that that they are capable of change in the first place.
The 2-3%/year economic growth that has been common since the 1980s. People getting rich is nothing new. You can go back 50 years, 100 years, 150 years, etc. and find the same kind of debates.
The difference is that people work less than ever and obesity is now a sign of poverty rather than wealth. Depression era US had people actually starving. The relative wealth of the middle class in the sixties and seventies is something you might rightfully mourn a little. But even then, there was a lot of poverty.
This is the "but iPhones and avocado toast" argument.
Calories and consumer goods are cheaper than ever. Housing, education and healthcare are more expensive than they've ever been. There has been a marked decrease in the amount of personal and economic autonomy available to the middle class and below over the past 40yr. Look at how medium skill level workers lived in the 1980s. It's basically a foreign country compared to today.
Having a robot vacuum to smear your dog's shit all around doesn't actually make you wealthier if you can't afford a house for the dog to shit in and apartments don't allow dogs.
What people want is a comfortable and fulfilling life, both of which are assessed on a relative basis. The modern economy has given them a rat race and shitty highs and they know it. Happy pills don't make depressed people happy. They just make them not depressed.
What people want never existed. You always find people that want more. But the same apartment that currently houses a couple of people used to house entire families. And it wouldn't have had a lot of the comforts people take for granted these days.
What you describe are first world problems.
Everyone wants to give advice, no one wants to take a lead and execute anything concrete.
All the talk of energy and no mention of solar, wind, batteries
Politics is the art of the possible. If Trump wants to focus on Nuclear, then let’s take the opportunity to improve nuclear.
This only works if Trump is president for life. He only has three years left in office, and you can't build nuclear that fast.
I don’t think Democrats are virulently anti Nuclear the way Trump hates wind farms. Unlike Trump, I don’t think they’ll just stop a popular project meant to provide power for a region.
And in any case 3 years might not finish projects but it might seed a lot of private investment and R&D
It's not a question of being anti-nuclear, is just that nobody is going to pay for it if there are cheaper sources of energy. The only thing that would keep it alive is if the government keeps intentionally killing solar and wind projects.
There is no such things as "democrats". There are individual politicians that usually group together. 30 years ago I would confidently say most democrats would be against nuclear, but the political winds have changed. I think the old ones would still be strongly against nuclear, but the younger ones don't care as much.
All the talk is nuclear.
You cannot replicate the situation where the US was the workshop of the world at a time when other major industrial powers had been smashed by war...unless you try to smash them or encourage them to have a war....
Other countries develop and need less of the basic products that they can begin to make for themselves, they create trade blocs where they can begin to achieve scale greater than the US or they simply are bigger anyhow. If the US can substitute imports then so can they.
IMO the US has ridden the wave because that was the only sensible thing to do and it has stayed rich as a result. Adjustments may be needed - it's not safe to not be able to make fairly modern chips - but the whole world will get poorer if one splits it up and prevents scaling.
What to do now...well....
This doesn't make sense. Nvidia literally has offices all over the world including India (a country that gets the most flak for offshoring). So why now ? Suddenly, "offshoring bad" ? I don't buy it. I think it is more about AI data centers. I could be wrong.
Just because everyone is doing something to be competitive doesn't mean they like it or think it's a good thing long term.
A fair number of the executives who shipped the jobs overseas 10-40yr ago lamented that the numbers simply didn't make sense any other way.
Of course “the numbers didn’t make sense” could just mean “we wanted to make $4 billion in profit instead of $3 billion in profit.”
Racing to the bottom, essentially.
Corporations control congress, if they really lamented offshoring they would have done something about it.
Either political posturing, or he sees the United States beginning to rapidly accelerate ($$$) certain sectors or companies as part of a strategic development effort, much like China often does. Possibly a mix of both.
Raise the drawbridge
He's just lying because he's expected to.
Every country, or coalition of countries, need to have public manufacturing run by their respective governments where their main purpose is to raise the bar on product quality, r&d, and employee care.
Let the private sector battle it out in their race to the bottom on everything, but ensure there is an ethical and trustworthy alternative to create the necessary competition in the marketplace to secure progress, both technological and social, over stagnation and eventual necrosis.
This is part of that "national security" we hear so many go on about when defending their policies of hate.
He is free to give back some of his $150bn anytime.
I do think that this is at the heart of the problem. The issue is not an overall lack of wealth, but how it is distributed. This is not going to change, no matter how many data centres or factories are built in the US. Ultimately, all the wealth will still end up in the hands of a select few.
Not to mention that we are already exceeding a number of planetary boundaries, which endanger humans. The ever-growing demand for natural resources and energy, which is directly coupled to GDP growth, is not likely to end well.
After spending quite a long time on this thread writing my thoughts etc, I feel like this is the most correct explaination of the situation
Distribution of wealth is the biggest issue and In my opinion, the most tangible way to solve things but then again, this is the core of the issue
Either you need a really anti corrupt body which can do their work and fight against such issues
But with causes like lobbying etc., those get washed up
Or we can have new people (like Zohran etc.) who try not to take lobbying money and then America can have new people who genuinely want to help and not be corrupt
But I am not sure what would happen, perhaps more people follow the example of zohran perhaps not. People are keeping an keen eye of the progress and what can happen. But one of the things which we saw was that although zohran won, I just didn't expect so much competition in the first place when Cuomo got around 40% I think?
it's wild because zohran's message was so well put out and received and this is the state then, I doubt that the voters might replicate it or not
It really depends ultimately on the voters. The truest form of responsibility but its also the lack of options and the two party system which is really bad in America ultimately causing the problems to exist even further.
> Either you need a really anti corrupt body which can do their work and fight against such issues
If changing the system is off the table, then this is what any solution would inevitably look like. I do not think the problem is a flaw in the system though. Calling it a systemic issue is misleading, because the system is largely functioning as designed. The logical response, therefore, is to change the system itself.
That idea sounds frightening, largely because most political parties treat the system as untouchable, presenting it as if there are no viable alternatives (thus convincing people that there are none, making them feel helpless). This creates a dead end: people experience the full force of the system's pressures while being told that nothing fundamental can be changed.
In that vacuum, scapegoating becomes an easy outlet. When the system itself cannot be questioned, frustration is redirected towards marginalised groups, under the implicit belief that punishing or excluding them will somehow relieve the pressure on everyone else, and that's how we ended up at this point (imho).
A system centered on people's needs would judge success by outcomes like health, stability, and quality of life rather than by growth metrics. If a policy reduces stress, improves wellbeing, and lowers long-term costs, it should be pursued even if it shrinks parts of the economy or even the economy overall. The fact that we currently treat any reduction in economic activity as a failure, regardless of human benefit, reveals how misaligned our priorities are.
I hope Zohran succeeds in improving people's lives, but I'm not holding my breath. I've been burned too many times before...
> But one of the things which we saw was that although zohran won, I just didn't expect so much competition in the first place when Cuomo got around 40% I think?
I think this primarily relates to how people are socialised. In Germany, we call this an 'elbow society', i.e. a society where people aggressively push their own interests and compete ruthlessly, showing little regard for cooperation, solidarity or fairness. People feel so lost in the world that they are losing their humanity, only looking out for what maximises their own outcomes. I believe this can be changed, but it will require a large-scale cultural shift driven by society, education, the media, and so on - the same institutions that pushed us in the other direction in the first place.
I Agree with your comment but one of the idea that terrifies me is not that change is impossible but rather change requires the whole world to do something about it and I am not that optimistic about it simply because of what you call about "elbow society"
> I think this primarily relates to how people are socialised. In Germany, we call this an 'elbow society', i.e. a society where people aggressively push their own interests and compete ruthlessly, showing little regard for cooperation, solidarity or fairness. People feel so lost in the world that they are losing their humanity, only looking out for what maximises their own outcomes. I believe this can be changed, but it will require a large-scale cultural shift driven by society, education, the media, and so on - the same institutions that pushed us in the other direction in the first place.
I so so agree with this statement, this is probably what I thought as well but one of the most terrifying things about this is that its sort of like a chicken and egg problem because the media,education and so much more are so influenced by policies/directly by the govt and the elites that I would doubt that making such change or giving people the idea that "change is possible" is itself possible
But there have been instances in the past where we pulled out of things but I am not sure how we can do it right now.
A large-scale cultural shift.
> the same institutions that pushed us in the other direction in the first place
So the thing which worries is me that I don't see a reason why these institutions would change? Do you see something in this perhaps?
I think that the best way is probably via at a small scale level and then having that grow up. Adopting it ourselves and discussing about it like we are doing right now is the only thing possible that we can do
My issue with this is that the incentives just aren't there for something like this. Let's say I want to create a social company and I just want "enough" and afterwards I'd just do it for helping etc. and getting miniscule gains because I think that the goal of money and only money itself is very dim
Even if we do something like this, the incentives really change because companies wont invest, you wont get funding etc.
So in a way, I think that the best way is probably getting attention of like minded people and having them invest with such knowledge but we really haven't seen such platforms. I think Kickstarters are a good idea for small scale projects but even they feel like you still have to get yourself a promotion or attention itself to fund it and it just becomes really 10x harder imo
I feel like microgrants are genuinely the best way moving forward. If people can provide 1-10k$/perhaps 50k? for an idea with intentions of good once it scales. To me it feels like the best way and I found ways to look at microgrants and they exist but I dont see many of them in much action either.
We really need to change incentives where doing good is favoured more than doing bad, We can even start small because sometimes even small good incentives are all one needs for real change.
I wish there was more interest in microgrants, I must admit that I had thought about working in this space or similar and perhaps I will jump back to it someday but what are your thoughts on it? Do you know of some mechanisms where good incentives can be generated at a societal rate?
The distribution is a problem, but not for the reasons people think. At these amounts (billions) the money stops being human-scale and starts to become civilization scale. You can accomplish big things with 150 billion. Things like: installing a gigawatt of solar, building a 1000km HVDC line, etc.
The issue is that when that 150 billion is concentrated into one person's hands, it tends to be inefficiently allocated. This is the argument against central planning; it's inefficient, it does not actually go where it would maximally benefit society.
We have, with the amount of wealth inequality, essentially re-invented central planning. It's arguably worse today, because rather than giving central control to a worker's council which is nominally accountable to regular people, we've given it to Larry Ellison who is going to build yet another datacenter for AI, instead of spending it on energy or manufacturing capacity.
My home electricity bill has doubled since AI came out. That is my evidence that this concentration of wealth is egregiously misallocating capital. It is a civilization-scale self-own. Countries that allocate capital properly will wipe the floor and we are beginning to see that play out.
Yep. The structural incentives for the bosses don't change when their employees are assembling cars or treating patients or serving coffee or writing code. Power is tipped towards capital and against labor. The owners extract wealth, which tips the scales further. Labor organizing has been kneecapped in this country and it will only get worse (there is an ongoing case trying to get basically the entire NLRB declared unconstitutional).
I think he's talking litteraly about distirbuting wealth :)
> give back some of his $150bn
To who? There are ~300 million people in the United States. He could give each one a $500 check (assuming he didn't want to keep any of his $150bn). Or should he give it to the U.S. treasury? It's $38 trillion in debt, so he could give up all of his money to pay off 0.004% of it.
There are three things that I think go underrated about America's manufacturing problems:
1. A lot of industries offshored simply because the owners of the facilities just sold and shipped off rare/expensive/important equipment to other countries without a second thought. Especially tool and die equipment. So a lot of industries in countries like Korea and China or India literally use the exact same equipment we used 80+ years ago. Even if we wanted these jobs back, the countries & businesses in question are too smart to ever sell the equipment back at nearly any price (why we can't manufacture them again is a whole other problem).
2. As Jensen alludes here, the cost of energy in the US dropped through the 60s but then flatlined. We became too dependent on fossil fuel and "comfortable enough" consumer prices. But the energy intensive heavy industry all moved to places with nuclear power or heavily subsidized power sectors.
3. The lack of any sort of public welfare solution is a distinctly American industrial policy failure. Manufacturing depends on labor force flexibility - both in finding the right people for jobs, as well as just dealing with stop-and-go or seasonal work. But Americans having their healthcare and retirement tied to their jobs and full employment is a huge boat anchor on both the workforce and industry.
Can someone please fix the title? s/Jensen/Nvidia CEO/
As long as you have power structures in place in society where labor is weak and capital class is strong the capital class is going to use all their wealth and power to extract everything they can from the rest of the society.
Regardless of whether you bring or do not bring manufacturing back you also have to fix these socioeconomic issues before all can prosper.
Do we (or someone better informed) understand the impact of re-shoring ?
In my mind, the reason (or the original intent) for off-shoring was to reduce costs to be able to sell more X (because cheaper is easier to sell) and selling more X means more profit and better market capitalisation (if the company selling X was public)
If re-shoring is adopted, my assumption/understanding is that X will retail at a higher price. Oversimplification maybe, but higher retail price means lower sales means lower profit (means lower stock price if the company selling X was public)
The solution to that would be higher/more automation i.e. less (or minimal) manufacturing related jobs I think ?
And now the situation would be that while there was capital-return-to-shore happening but went into automation and the jobs recovery was not what someone would have expected (both in terms of scale and skill)
But because the jobs were virtually re-shored the off shore labour market now suffers ?
Thoughts... ?
What’s missing from these conversations are the cost of living.
We’ve financialized the housing market, meaning the very basic needs of shelter now rises in price in accordance to the market. If tech workers make 2x or 3x the median annual salary, it makes housing prices rise for everybody else in the city.
In order to pay a “living wage” employers have to pay enough for their workers to make rent and groceries. In america, one of the highest GDP per capita in the world, the “living wage” is somewhere between 3x to 10x the offshore salary.
If you could house millions of people at the bare minimum cost, if you could provide them food and healthcare at prices that aren’t inflated, then the living wage doesn’t need to be so high.
We talk a lot about raising the minimum wage. What about lowering the minimum costs? That would mean a less stressful life for workers and cheaper labor for employers.
The financialized housing market is only a symptom of the over-regulation (through zoning and permitting) of housing, construction, and real estate in general. This over-regulation is itself a microcosm of the petrification of the majority of the economy.
The children yearn for the data centers
the us is 16% of global manufacturing by value with 4% of the population, i dont know how this fact isn't brought up more.
on a population weighted basis the us manufactures more by value than china.
A bunch of people salivating for a world where the us was 52% of world gdp, not because it was great, but because the rest of the world was ash.
Whilst this is true, there is some distortion to that statement with measuring by value. If I produce a screw for the US military (a scenario where supply chains are highly regulated and thus may be unable to buy cheap from a foreign country) and sell it for $1, I have produced a dollar of manufacturing by value, but If I produce exactly the same product in China for $0.1, I've only made 10 cents by value, despite the fact I have made exactly the same product.
There is a reason why for instance ships and raw materials output is measured in tonnage, since that is the actual thing produced, the value is secondary to that. That is you would want to measure the actual amount of goods produced rather than what they sold for, obviously only amongst comparable categories.
Also US unemployment has been low. The idea that Americans need more jobs just doesn't fit the numbers. There are plenty of good paying non-backbreaking jobs for Americans but they just don't seem to believe it.
> There are plenty of good paying non-backbreaking jobs for Americans but they just don't seem to believe it.
Where at?
you can get a job as a long haul truck driver in texas with no education and paid for training paying 80-100k and live in an area where houses cost 300k, within 5 years starting from zero with no education you can own a home and have a nest egg big enough to become an owner operator or invest in a small business.
so thats the floor for anyone willing to put in a few years of work.
It says non-backbreaking. Truck driving is one of the highest risk jobs towards one's back.
Also, US manufacturing already struggles to find workers.
The problem, though, is that 70% of US manufacturing happens in small town/rural areas, which is not where the people looking for jobs are found, so you get this curious disconnect.
This is self serving nonsense. “ai infrastructure” here isn’t manufacturing its enormous data centers that have so few humans the lights are off in every area other than where physical maintenance is happening. It’s about building enormous caverns that consume enormous amounts of power and warehouse the products his company manufactures offshore. The only thing he wants to onshore is spending on those offshore made products he sells. There’s no meaningful jobs in “AI infra” that outlive for the original data center build. He’s advocating for huge investment in energy production to ensure there’s capacity to run his products he’s selling that his company produces off shore.
How can anyone read this with a straight face?
Andrew Grove, in his later years, held the same view. He explained essentially everything we had seen till then and since: the decline of US semiconductor manufacturing, the loss of talent, critical dependence on foreign nations and companies, etc.
It turns out you can't cherry pick the intellectual work and fob the rest off on foreign supply and still maintain global leadership and domestic prosperity. The whole stack must be at least competitive domestically. Only trade policy can achieve this.
Could a company other than Taiwan Semiconductor Manufacturing Company manufacture the chips that Nvidia products are made of, and could that happen in America? The answer is yes to both. But if Nvidia attempted it today, it would be doomed. Jensen knows that sometimes it's more convenient to be Jen-Hsun.
This ship has sailed. Economy will not revert back to what it was with wishful thinking. Especially offshoring jobs is the utmost goal of every CEO, even if the wage is one dollar less. This benefits himself and his customers giving no f... for the unemployed.
China is living its 1990's this decade: the boom is starting to wear off. Next comes India which is living its 50's. Next will come Nigeria which is in it's 20's. Offshoring jobs will continue until the end of modern civilisation.
If maximizing profits is the primary thing that matters (and in the US, amongst other places, it is) then nothing will change about this. It's also why unions are so opposed by certain groups and it's why we have such an obscene wealth imbalance. Shareholders and profits matter more than people.
Martin Luther King Jr. expressed it well when he said, "when machines and computers, profit motives and property rights, are considered more important than people, the giant triplets of racism, extreme materialism and militarism are incapable of being conquered,"
I think people are ignoring the reciprocity in the global trading system.
People and news articles always talk about goods trade deficits for rich countries, but never their almost universal services trade surpluses, and the profit margins are vastly different.
For manufacturing, a large part of the revenue goes to materials costs, but for services, almost all of it are net incomes.
Yes you can bring back manufacturing jobs, but your services surpluses would also shrink, because when you don't open your market, countries were not obligated to let you reap profits there too.
There’s a huge downside to manufacturing and that is pollution.
IMO, I’d rather china be the economic super power and the US leeching off that technological progress and manufacturing the same way say Scandinavia or most of Europe currently does.
Those Europeans get 2 months off while china and the US duke it out and they get all the technological benefits with no downsides. It’s genius.
Everyone talks about the US being number one, but no one wants to put in the effort. You all want to sacrifice work life balance and give up those remote jobs to push the US back to the top? Thats what it takes.
The problem is that nothing really stops people from going up the ladder. You mention leeching off technological progress but the reason some are concerned is because they will simply conquer the whole supply chain.
Take an example of tesla vs byd. Heck, The electric MI car I saw looked so good and nice, its wild
Most of the money I feel like America's still has lots of influence is probably from well established tech corporations or similar but even those get challenged by leaner companies but also that all of them have bought into the hype of AI
America's economy is on such a weak line in my opinion because the only thing which stops all hell from breaking loose is that stocks are doing good just because of the AI bubble.
When the AI bubble bursts, I have a predication that all hell might loose free (I sincerely hope that I am not right though)
Ironic that the thing which would in the end hurt america is the company selling hype who is trying to doublespeak itself into showing something but being completely different when you realize the downstream effects of the AI bubble crashing
Yeah I’m saying drop the concern for another country conquering the supply chain. Let China dominate.
Europe is unconcerned. And they benefit from that. I mean real benefits like work life balance not benefits like talking points about which country has the bigger dick.
Do you really want America to be number 1 while you’re slaving away at your job 996 in pollution infested cities?
I agree with what you are saying about Europe being better in work life balances etc. in my person opinion as well and I admit it so I am just going to write a message about the things I have been seen written by Americans in the first place/gist of them for the sake of providing a (full picture?)
I wouldn't say Europe is unconcerned either. Europe has less issues than America because its collective debt feels very low compared to America
France recently went into all out stalemate of sorts and in countries like UK as well there are some really systemetic issues and not vice versa
Namely the most heard is the lack of innovation. People (here on HN) have compared Europe to a colloseum, saying its stuck in time and that there is a lack of innovation.
The startup culture is disfragmented etc.
There are some real concerns about Europe as well being impacted because a huge chunk of jobs were in the manufacturing business (think cars) and with things like BYD etc., Europeans themselves are worried about being able to compete with their price.
the point being that Europe has some concerns as well and they stem from their decision. The regulations make businesses genuinely hard to start.
(Note that I still believe that Europe is really good compared to America in a lot of genuine metrics in my opinion as well but then again, its not really a fair discussion if we don't discuss both sides of the coin)
If the metric is happiness, Europe wins.
It’s hard to measure this directly but there quantitative metrics that correlate. Suicide rates for example, https://www.psychologytoday.com/us/blog/heart-medicine-for-a...
Do you think Europe will be able to benefit from this forever if current trends[1] continue? I'm not so sure.
[1] https://econofact.org/factbrief/fact-check-has-the-economic-...
The political dance of NVIDIA:
1. Offshore jobs, maximize profits and take advantage of incentives to offshore. 2. Political winds shift. 3. Talk a good game about needing to onshore, make some token moves to move a small token amount of manufacturing back to the US. (You are here). 4. Once the admin changes and/or mid terms, continue to spend more on offshoring.
Remind me where does NVIDIA assemble their cards?
Founder of American AI company believes AI infrastructure should be built in America.
Let's see what the United States Secretary of Commerce has to say regarding onshore manufacturing: https://www.youtube.com/watch?v=HNUXedYX7aE&t=17s
> In a recent speech, Nvidia CEO Jensen Huang outlined his plan for bringing manufacturing jobs back to America: force companies to build AI infrastructure in America.
Not self-serving at all.
> Since founding Nvidia in 1993, he has overseen its transformation into a central supplier of computing platforms for AI, data centers, and high-performance systems. That position provides direct exposure to the industrial requirements behind digital innovation, including power generation, fabrication capacity, and workforce availability. From this vantage point, energy is the basis of the economy from which everything is built.
This reads just like AI slop: I am applying for a government advisor position. Can you please write me a short paragraph linking the work experience listed in my resume with the position?
Tell me a reason why would billionaries help others when you have full automation?
That's all well and good, but he is literally at this moment attempting to export industrial capacity to China at a direct tradeoff to it's availability to the US, even when he could sell it at the same price.
Remind me where Nvidia’s products have been built, basically forever?
Please let me put a data center in your back yard. Please just one more I promise the chat bots will help you email faster please bro AGI is just around the corner I promise it wont be an exponential multiplier on wealth concentration.
In quite a few places in the rural US (especially the mountain west), people are asking for that. Those companies usually build out a lot of needed infrastructue (power, water, even roads) as part of the deal, and it provides job opportunities (a ton up front, and some (though fewer than many people realize[1]) in perpetuity).
[1]: https://news.ycombinator.com/item?id=46498947
50-100 jobs long term for a town, for noise and environmental effects in perpetuity, plus tax cuts as incentive from the locale to hire a handful of mechanical/handyman type jobs. Likely the skilled labor will be imported.
Makes sense. There is no real functional difference though between offshoring a job, or importing cheap (H1B or other) labour to do it in the home country.
My grandfather worked in the aleganey forge running the tempering ovens for very large metal forgings. Raised a family,4 kids, kept the farm, retired and lived 30years more, and there was some money left for everybody. He bemoned the selling off?, out, of american manufacturing that began in the 1970's. He was the kind of american who was comfortably unaware of the rest of the world, perhaps ever so slightly embarassed by his unworldlyness, only having a high school educatiin, but also completly untroubled by anything, anywhere, ever bieng a real concern.He had worked on the 16" guns that are still to be seen on the decks of WWII battleships. But instead of an enduring world peace and prosperity he got to see the errosion of the american dream, and the desruction of americas strength from within. As a further illustration, granpa and grandma, used to go visit "uncle kieth"in NYC, St.marks place, 6th st, between 2nd and 3rd ave, manhatten, in the 70's ,80's and early 90's, stayed in the truck camper, parked on the street,an unspoken,unwritten imunity convieghed by that little bit of mud in the fender wells.
People love the abundance of cheap affordable stuff more than they love their neighbors having work.
It's also a positive feedback loop, where the less money people have from a lack of good jobs, the more they will choose cheap foreign goods to buy. Never mind that if you are in an economically productive sector, this whole cheap shit bonanza is just pure upside for you (with a touch of dissonance to maintain moral purity, of course).
Bringing jobs "back" probably isn't going to do much. We need a cultural shift away from Temu, Shine, Amazon, Walmart, Dollar General and towards spending more money for less goods.
Which is going to be about as popular as proposing we go back to land lines.
Is he going into politics or something…
All leadership positions are “into politics”. His just happens to be one influential enough to matter to the US federal government.
"Corporate welfare recipients that got free money to build data centers, testing the water on asking for more free money to hire employees."
The cycle repeats: send jobs somewhere else, hold those jobs hostage until the government pays you to bring them home. It will take the form of tax holiday on bringing foreign cash home, etc.
Offshore the datacenters (no jobs). Keep any manufacturing (some jobs). Problem solved.
Data centers provide jobs. Not as many as manufacturing, but the difference isn't as large as you would guess. A modern data center needs 50-100 people to repair/replace hardware, maintain the generators and such. A modern factory needs 200-500 people to do the assembly, shipping, and other such work that isn't automated.
Of course if labor is cheap you can use a non-automated factory and then you will have 2000-10000 people needed. However those are not coming back to the US (or Europe).
Is that comparison similar square footage? I know of factories that have 10 employees and are small machine shops, and factories that have a few thousand employees (even ones that are highly automated). The difference is scale.
I’m not sure square footage is what matters here, though comparing the overall market for datacenter/manufacturing jobs would be more useful than individual installations anyway. It’s not like the U.S. is hurting for physical space in which to put factories or data centers. Speed of light isn’t that slow — the big New York IXP is actually in New Jersey and it would be fine even if it was further away.
Yes, but I'm comparing a specific factory with a specific data center that I happen to know enough about to compare. There are larger factories that have more people.
The factory I'm thinking of had 2000 people in 1950, and around 250 today - while producing the same amount of product. Automation is continuing to come to that factory - there are number of things that could be automated but their volumes are not quite high enough today to justify the upfront costs.
> A modern data center needs 50-100 people
I doubt it. Job density for land usage and other externalities generated is going to be one, maybe two, orders of magnitude greater for manufacturing.
One CNC laser cutter replaces the 40 humans in a factory. I don't know how many people the automated paint system replaced... factories are not near as labor dense these days as you would guess.
> One CNC laser cutter replaces the 40 humans in a factory. I don't know how many people the automated paint system replaced.
In any new, expanding, or relocating factory, nobody is getting replaced by these things, because they are already priced in.
> factories are not near as labor dense these days as you would guess.
That's a bit presumptuous of you.
- Keep the data centers (jobs, downstream commercial demand, etc.)
- Build up manufacturing (more jobs!)
Problem solved.
no power no jobs.
same reason why america has been protecting their oil with wars.
energy is the basis for everything. cheap energy is what you want. cheaper than the next guy. it doesnt matter if its for AI, transport, refining goods, etc. its the same problem.
I used to agree with this (at least the headline), but then I lived through the Biden administration.
Fundamentally Americans want to consume more services and especially goods than the people living in America produce. The only ways to square that circle are
1. To get more people. But by 2024 prime age labor force participation was at essentially record numbers[0] so there aren't more people available domestically, and we saw in the election that swing voters are not fans of mass unskilled immigration.
2. To produce more with the same people (i.e. increase productivity). But in most cases this is up to technological advancement and not in the hands of policymakers. There are probably some sectors that could benefit from deregulation (e.g. construction) but those regulations have their own constituencies that don't want to see them go.
3. To force people to consume less (i.e. inflation). Voters hate this.
4. To import more from abroad.
In the end "offshoring" is the only politically viable option.
[0] https://fred.stlouisfed.org/series/LNS11300060
>3. To force people to consume less (i.e. inflation). Voters hate this.
Inflation from immigration/offshoring restrictions is not evenly distributed. It's essentially a purchasing power transfer from everyone else to low-skilled workers (who no longer face competition from cheaper overseas labor, so have more bargaining power and hence can demand higher wages from society).
I generally agree with that, but that makes the politics of it even worse because the benefits accrue to the people with the least political power.
> not just those with PhDs and college degrees.
Don’t worry, soon they’ll earn as much as those without PhDs and college degrees thanks to LLM overlords. What an absolute clown.
Kiss the ring. The only way to keep the line going up is government money.
So fucking just go ahead and make your own foundry then, go ahead and make an EUV machine instead of buying one from ASML, get slave wage Americans to assemble chips and boards, better ban foreign developers abroad and domestically because they might send those pennies you give them back home.
Just another billionaire.
Traditionally, economy are typically divided into three sectors: Agriculture, industry, and services. Service industry contains everything from nursing to software development and sales. The problem with this division is that there is an extreme productivity gap within work in the service industry. A software developer's work can serve 100 million people at a time, when a nurse can only serve one customer at one specific time.
The reason why highly developed economies have become so service driven is because they have become sort of bimodal: The cost of labor is such that only jobs that are productive enough (profitability per hour) are done in these countries, and jobs that absolutely have to be done there to sustain the population. Jobs in the middle, everything that is not highly profitable or location-dependent, is offshored to lower-cost countries due to the cost of labor. This results in these developed countries having issues: Cost of living is high due to labor cost and there's high economic inequality due to wildly differing productivity.
The solution would be to bring these "mid-productivity" jobs back to developed countries. However, the main roadblocks still remain: The cost of labor is too expensive for most of these jobs to be competitive globally. However, I think there might be a way to do this in the near future: Advancements in robotics would mean a higher level of automation for industrial work, meaning more industrial jobs would become viable in high-cost countries. Each worker would be productive enough that the cost of labor is not critical anymore.
To make this happen, I believe it's important to ensure that the country is viable for this kind of manufacturing: Energy supply needs to be abundant and cheap, workforce needs to be educated, outside the "elite" students, and there needs to be low trade barriers. Low trade barriers are needed, because virtually all manufacturing is part of a global supply chain where parts cross many borders before the product is sold (and (high-value) products are sold globally). Additionally, the viability of automation will vary between different parts of the supply chain, and so you likely cannot automate everything.
"If only we could find the people responsible for this" - American CEOs
I’m sure Jensen Huang is diligently thinking about serving his country every day.
Taiwan?
No kidding. We need to abolish the H-1B too. What a disgrace that is.
Hmm Could Jensen's statement be motivated that by forcing companies to build AI infrastructure would ensure more of his Nvidia AI chips to be sold? I keep seeing him say things that makes him appear bias towards more sales. Like dismissing any possibility that an AI bubble is growing. To admit the possibility may hurt sales.
Sadly, even the offshoring centers are losing to automation. I’ve personally seen even modest tools automate away 10s of jobs in a factory in the 2010s in India. Cutting, Punching, bending and moving metal sheets just done by 1 machine.
Today We have lights out manufacturing.
One thing I would highlight, is that the issue with offshoring wasn’t the loss of jobs as much as it was underemployment.
Going from factory foreman to burger flipper is what hollowed out that class of workers.
The Root cause failure for the offshoring model for the offshoring nation is retraining difficulty.
If people could be magically retrained into new roles, then offshoring would always work.
At this point, just cut checks from the firms that got us in this mess.
Don’t bother retraining, just make people financially whole at the cost of those who offshored/outsourced.
Jensen wants power and resources for his data centers big news
Globalism was also a big factor in world peace overall.
Maybe he doesn’t like to be the next Maduro dragged out of bed at night by marines. So he complies to everything Trump wants him to say?
Outsourcing manufacturing was very short-sighted in light of the automation which was taking place and accelerating.
No doubt this short-sightedness was the result of our debt-based monetary system. The disconnection of money from long term value-creation created a cycle of speculative booms and busts which made short term bets the most viable strategy to ensure that execs would get their bonuses.
Also, the perverse legal concepts of 'corporate personhood' and 'limited liability' sealed our fate, ensuring that companies could pollute our land and water with chemicals... China was all too happy to send children's toys full of phthalates and other endocrine disruptors our way, ensuring that the next generation would be pacified and struggling with hormone-related issues (I leave you to infer cultural implications...)
Seems like China got their revenge for the Opium wars!
Easiest way to do it is to financially and legally cut off all avenues to offshore and outsource.
Then make it litigative open season for any affected or displaced person to court mandate a near-blank check to make up for the generational contempt of US citizens.
You exploited underpaid labor or the globe for the benefit of yourself and American customer. Minority of Americans are workers, but all are customers. You did well.
I always ask who the "we" is in statements like this? Is it self critique or just a way of saying we are all at fault you better don't focus on me.
From reading the article and having listened/read a lot from Jensen and his ilk, I feel pretty comfortable saying the "we" is referring to the system we have built in the US. Basically the era of free trade. He and Trump and that group generally think we made a mistake by allowing free trade, and the solution is to "force" that away with a mix of taxes (tariffs), laws, incentives (subsidies/grants/etc) and others.
This is a summary FTA, not a direct quote from Jensen, but it's a pretty good one IMHO:
> In a recent speech, Nvidia CEO Jensen Huang outlined his plan for bringing manufacturing jobs back to America: force companies to build AI infrastructure in America.
I highly doubt he really thinks that, but it pays to say so in public.
For sure, it's quite possible he doesn't really believe this stuff but is evangelizing it because of the benefits of being in good with this administration. It's sad but important to keep in mind as a possibility
And in other news ... water is wet.
lol
"AI" is going to coincidentally collapse the same time this tyrannical presidency ends
what drugs are you doing where you truly believe eliminating millions of jobs is going to bring "prosperity"
it's going to "silo" wealth even further and make everything more unaffordable
next generation won't even be able to own a car forget a home
AI isn't going to collapse. It's the real deal.
Sure, like the dot com bubble it will burst. But like the internet, AI is here to stay. The real bottleneck is electricity supply. CEO of Microsoft has even said, we have the chips but not the electricity to power them. The chips are sitting idle.
The capabilities of AI are on an exponential curve.
“We?”… how insulting.
I’ve noticed again and again what’s missing from the often repeated by media blame game of “they’re taking our jobs” is the fact that it was US corporations purposefully offshoring in the name of maximising profits at the expense of paying US wages locally, rather than countries “stealing” the jobs ffs! It’s. Pure. Xenophobic. Deflection. FFS!
“They’re stealing our jobs!”. No… corporate America applied the Ferengi Rules of Aquisition #6 to whole industries for a quick buck.
Who is "we"? Jensen, where are your chips made? You're part of the problem.
Onshoring manufacturing and bringing back the US manufacturing base is a critical issue. This is from a social and security pov. Having millions of young men wallowing around playing video games and drugs all day and not working, raising families, is disgusting and a sign of collapse. We need manufacturing back in a big way, unfortunately I don't think that Trump, despite also thinking that, has the vision or ability to make it happen.
The $US as world's reserve currency played a big part in why manufacturing was offshored. As manufacturing processes mature they move to the periphery. Because of the reserve currency status of the $US, this periphery meant outside the United States.
The periphery got the jobs and the US Elite got the $$$'s. What should've happened though was the Elites should've invested their cash into in technologies. Sure they did to some extent (NVIDIA is an example) but mostly what they did was pile their money into fixed assets, hence the inflation (e.g. housing) we have today.
The Blame lies with the Investment class elites, the Bankers, and the Donor Controlled politicians. Washington D.C. (Donor Controlled).
Similar things can be said about LLMs replacing jobs. I'm all for governments regulating such changes, but at best they can only slow things down.
But that said, there is a balance to be had. Ultimately, quality of goods and services, and the competitiveness of the country as a whole must take priority. Not jobs. The whole idea of creating jobs for the sake of creating jobs is perverse. It doesn't help anyone and harms the public in the long term. If we want a way to give people income, UBI or similar welfare-like approaches make sense. They might even be more profitable in the long-run.
With offshoring, has the quality of software gone up or down? If it has gone down, then these companies are harming the country. If they can improve quality by offshoring, then so be it. That only means whatever we're doing isn't working in terms of generating quality software, and we need to fix that. But I think it is a bit more nuanced, offshoring to certain countries tends to have higher quality than others, so that should be taken into account.
My wish is that we all (not just the US) go back to the 50's and 60's space-race era mindset of competitive innovation. I think (and I hope it isn't too controversial to say) that culturally we've been abandoning nationalism and nationalistic-pride, these were the drivers back then. Whether it was Nazi germans, USSR scientists, NASA scientists, bell labs,etc.. there was a strong sense of country/nation and that our work was contributing to that, that something we're building as a collective that will be our legacy to be passed on to the next generation.
The offshoring and general enshittification culture today is not that. It's Reaganism turned pandemic. The only thing that matters it the thickness of the shareholder's wallet. What I expect from governments is to take a bi-partisan approach to this, we need some sort of nationalistic pride to get us back on track. With EU for example, I can see a sense of European identity and choesion being formed now that the US is turning more and more hostile towards the EU. In the cold-war era, we had russia to unite us. Now, we're more concerned about other americans in the US than we are about China or Russia, our sense of partisan/sub-culture identity is much stronger than the national identity, there is no expectation or pressure from the government or the public for companies to work in the best interests of the country. At best we expect them to be proxies for welfare programs.
In other words, whether it is LLMs or offshoring, we should expect them to not do that because the alternative is better. The educated workforce in the US is not looking good,it's pretty dismal. Even the population attending college has gone down dramatically. Companies like TSMC struggle big time when trying to open plants in the US because there is no talent here. From what I hear from teachers all over, the post-covid situation is very scary, it is perhaps more concerning than anything else for the future sustainability of the US as a country.
I agree that we've done a great disservice to the country by offshoring, but only in part, only in cases where the quality of the work was poor. For example,I reckon (and i could be wrong) there are more developers and with better talent per-capita (not by volume) in certain western-european countries than the US. Even in India, for a long time there was this bias that outsourced talent there is of lesser quality, but over the decades I thing things have improved - but you do get what you pay for. My point is, coupled with this sentiment should be how we've also done a great disservice to the country by screwing up education, government and a several other things. It isn't just offshoring, there is a more fundamental mindset that is corrosive and must be addressed.
Nobody could see that coming! /s
STFU Jensen, why don't you stop making circular deals and build a Fab with the 5 trillion dollars that you have - rather than having TSMC and Samsung make them?
Put your money where your mouth is!