We've known for a while that the famous "lights out" factory is not in the cards. Quality, throughput and flexibility in manufacturing are all better when actual people are involved in the process. Not like George Jetson, sitting in his chair, pushing one button in the morning and one button in the evening, but really involved in the process on a minute to minute basis.
We have been saying for years that manufacturing will return to the United States-- to all of North America, just as soon as the "low cost of manufacture" mirage dissipated. It has, and through the assistance of very inexpensive natural gas for fuel, manufacturing is streaming back to North America. Since we have enough natural gas to get us through the coming transition period to nuclear power, that trend should continue.
Especially when you consider that North America is still (and likely to remain so for a decade, at least) the largest market in the world, it makes sense that what companies want to sell here, they are thinking about making here.
So what's wrong with that?
The problem is that we have jobs in manufacturing going begging already, and we don't have applicants...and we still have an "adjusted" unemployment rate of over 7%. "Adjusted" means that the real rate is still probably about 12%, or even higher in some areas, like Detroit or Cleveland. If we can't satisfy the demand for workers now, how can we do it when manufacturing really starts to ramp back up? The answer, obviously, is that we can't.
Historically, we have depended on immigration to give us both the educated workers and the uneducated laborers that manufacturing has needed. This has worked for two centuries, but may not work for very much longer. In China, India and other countries, the brightest engineers and scientists aren't coming to North America or Western Europe to work...they come to get an education and then they go home where the opportunities are greater and the competition is less.
We can get all the uneducated laborers we need, though. All we have to do is open the borders to emigrants from Africa, the Middle East, Eastern Europe, Latin America, South America and Asia.
We can get all the rest of the uneducated laborers we need, too, by hiring inside the United States. There's the real problem...we have produced a generation of students that have been told that science is too hard, and that manufacturing is dangerous and ugly and dirty.
We are thus being forced to consider "corporate education." By that I mean manufacturing companies hiring people who clearly have no skills and setting out at their own expense to give them the skills they need, both in learning and in doing.
This is going to be expensive. So why can't we just depend on automation for a replacement for the worker?
The fact that productivity gains from automation have shrunk dramatically over the past decade tells us something about that. We are now working with the results of Advanced Process Control, essentially process fine tuning in process industries, and with supply chain tuning in the discrete manufacturing industries. We aren't going to get the huge productivity increases and concommittant employment reductions that we got in the 1980s and 1990s from installing automation systems.
But we don't need hordes of uneducated laborers. That brings us back to why the jobs are going begging. What we need is an educated, dedicated workforce that understands modern manufacturing and business techniques. We aren't getting that in school, and the things we have tried, like "No Child Left Behind" and standardized testing, just have not worked in improving the work-readiness of our young people.
We are ignoring significant resources in our inner cities, too. One of the reasons Chicago, Detroit, Cleveland, and the other formerly huge manufacturing centers of the midwestern United States have huge problem areas (what we used to call ghettos) is that the people moved there because the manufacturing jobs were there...and when the jobs moved out, the people had no place to go. The supermarkets and most stores moved out too. There's no way out of that box. It is exactly like the favelas in Brazil that horrify us so much-- just they are here in Chicago, in Saint Louis, in Los Angeles... So we have crime and prisons and drugs and welfare.
We have a huge opportunity to train and equip our young people for manufacturing careers that WILL be there for them. We also have a huge opportunity to duff it. It will be very interesting to see which way we go.
Comment, and tell me which way you think we'll go with this... will we educate the unskilled and give them jobs, or continue to pay to feed them and imprison them?