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Mid-Morning Art Thread | Main | Hillary Clinton "Writes" A Broadway Musical About, Get This, How Women Have Been Oppressed by Men
May 10, 2024

THE MORNING RANT: Learn to Weld? What if Manufacturing Jobs Come Home but White Collar Jobs Get Offshored?

Learn to Weld.JPG

Principled Free Traders* had a great run during the quarter century before Trump’s presidency. “Thought leaders” on both side of the political aisle agreed that exporting as many US manufacturing jobs as possible to developing countries was a desirable thing, as they sneered “learn to code” at the deplorable blue-collar workers who lost their livelihoods to offshoring.

(*Just a reminder regarding my animus toward “Principled Free Traders” - I am not necessarily opposed to genuine, reciprocal free trade, but it angers me when people advocating for unilateral surrender to foreign mercantilism falsely promote themselves as being highly principled “free traders,” especially when the foreign mercantilists are hostile countries that have abominable labor policies and are generally closed to US exports.)

Then Trump and his tariffs came along. So did Covid, and supply chain interruptions, and shipping backlogs, and port breakdowns, etc. The higher cost of US labor started looking a lot better compared to the cost of not receiving products that are stuck in a foreign port.

Meanwhile, the work-from-home era started during the Covid hysteria, and employers are still struggling to get employees back to the office. For better or worse, employers are realizing that if a job can be done at a kitchen table in suburban America, it can also probably be done in Bangalore or Moldova, but for much less. And unlike manufactured products that must be slowly shipped across the globe, the product the laptop class creates is digital, and can be shipped around the world in the blink of an eye.

This Google story broke last week, and although the number of Google employees losing their jobs is not huge, it had a significant impact because it really makes explicit that tech jobs are now being offshored, and that U.S. employers are dismissing white collar workers for the express purpose of replacing them with cheaper employees in places like India and Mexico. Learning to code won’t help the laid off employees. Maybe they need to learn to weld.

“Google lays off 200 workers, shifts jobs to Mexico and India in latest restructuring” [NY Post – 05/01/2024]

At least 50 of the roles were based at Google’s headquarters in Sunnyvale, Calif. Google is expected to hire replacement workers for the roles in Mexico and India, CNBC reported, citing a review of internal documents.

In just the first few months of 2024, about 60,000 employees have been laid off by tech companies.

“A comprehensive list of 2024 tech layoffs; From major layoffs at Tesla, Amazon and Microsoft to small fintech startups and apps” [TechCrunch – 5/03/2024]

The tech layoff wave is still going strong in 2024. Following significant workforce reductions in 2022 and 2023, this year has already seen 60,000 job cuts across 254 companies, according to independent layoffs tracker Companies like Tesla, Amazon, Google, TikTok, Snap and Microsoft have conducted sizable layoffs in the first months of 2024.

As Don Johnson notes, it was foolish for white collar workers to think their jobs couldn’t be offshored too.

Don Johnson Folly of Offshoring.JPG

But at the same time, while coding can be offshored and spreadsheets can be produced and sent from anywhere, there’s a growing appreciation for the value in locally manufactured products, which don’t have to sail through chokepoints which have a habit recently of getting choked off.

“Simultaneous Obstructions to the Suez and Panama Canals Threaten the Global Supply Chain” [Foley & Lardner Insights – 02/21/2024]

Nearly 15% of global shipping traffic is estimated to pass through the Suez Canal in a given year. The volume of freight traversing the Suez Canal decreased dramatically since December 2023 due to the Houthi militant attacks.

The Panama Canal—which ordinarily carries approximately 40% of all U.S. container traffic—is simultaneously experiencing interruption due to an unprecedented drought. Drought conditions have decreased water levels of the canal to well below normal levels and forced canal authorities to decrease the amount of traffic navigating the canal each day by more than 36%.

How significant is the onshoring trend in manufacturing?

Rob Lanphier and Jim Jones of William Blair & Company wrote a blog post in December noting the onshoring trend. They pointed out several competitive advantages that the US has, including infrastructure that is already in place, and especially cheap abundant energy in the form of natural gas. It included these charts.

This first chart shows the number of mentions of “onshoring” in public filings, with a dramatic uptick starting in 2020, and continuing to shoot upward since then.

Mentions of Onshoring.JPG

This next graph shows the number of companies by industry announcing expansion of production facilities in the US since 2020.

Companies expanding production in US.JPG

Glenn Reynolds (Instapundit) wrote a piece recently about AI replacing white collar workers, and it had much the same thesis, that people who earn money with their hands may have better employment prospects than the laptop class.

“The white-collar class derided mass layoffs among the blue-collar workers. It’s about to feel their pain” [NY Post – Glenn Reynolds – 01/16/2024]

Some of them [plumbers and auto mechanics] might even tell out-of-work analysts to “learn to plumb” — but, as we saw a couple years ago, people who told laid-off journalists on Twitter to “learn to code” were accused of “hate speech.” And that’s the difference between what happens when tradesmen are laid off and when members of the gentry class lose their sustenance.

While it’s wonderful that manufacturing jobs are enjoying an onshoring boom, and it’s ironic that some white-collar workers who sneered at blue collar workers losing their jobs are now suffering the same fate, we should want all job types to remain in this country. We need all types of jobs to remain in this country. Self sufficiency and national security depend on it.

An important lesson that was finally learned by (some of) our ruling class during the era of Covid tyranny was that jobs throughout the entire workforce are “essential,” not just those jobs that were deemed essential by economically illiterate government officials. When “non-essential” jobs were locked down, the entire system broke down.

There is no class of jobs that is not essential to this country.

[buck.throckmorton at protonmail dot com]

digg this
posted by Buck Throckmorton at 11:00 AM

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