I’m as excited as anyone about the prospect of a return of American manufacturing. But there are huge barriers, among which is the profitability metrics of accounting. Will it make sense from an economic point of view? Without that piece in place, political wishes and national determination will not be enough.
The United States has outsourced vast amounts of its once-mighty manufacturing power to China, Mexico, and elsewhere. It seemed mutually beneficial for decades until we took note of how strange it all is that America should have so few industries it can call its own.
There are a number of ways to tackle this problem. But the scale of it is not widely understood. The wage differentials between the United States and other countries are gigantic and not easily overcome. Other production cost differentials matter too, as does the problematic value of the dollar. Its status as the world reserve currency cements the economic rationale of imports over exports.
There are other issues besides, among which is something more fundamental: the American work ethic. This is a cultural problem emerging from decades of easy money and a loss of enterprising drive.
A quick story from yesterday. I got in a grocery line behind a person with a huge basket full of groceries but they were arranged in a strange way. As she put them on the belt for checkout, she began to use the separators, not based on the kind of product but on some other basis.
I watched carefully as she put paper bags in each pile. After the first tranche went through, she pulled out a card and paid. She repeated this. Then I figured it out. She was shopping for Instacart, not just for one person but fully five households.
I reverse-engineered her process. As she entered the store, she had a huge list and as she went through each aisle, she had pulled groceries for each client, carefully separating them and maintaining that separation through checkout, payment, bagging, and eventually transportation.
The possibility of mistakes must be huge in this kind of operation. One error and the customer would surely complain.
I was a bit awestruck by the engineering feat that was unfolding before my eyes. I made inquiries about what was going on and she said she was doing this but did not say much more. Her English was broken so there were language difficulties. More importantly, she was simply too busy to chit-chat with some guy standing around making inquiries for an article.
As I thought about it, I watched her work with some degree of amazement. It was marvelous. Based on her language skills, she is very likely a recent immigrant, probably with no “higher” education but with some mad skills.
How did she get so good at this? Repetition and the improvement that comes thereby. That’s where skill comes from. Why did she repeat this so often? Because she had to in order to earn money. The need creates the discipline and the discipline fosters the skill.
A quick example. Let’s say you bring home four swiveling bar stools from the home store but they need to be assembled. The first one is a mess with screws and confusion and you might have to do it over once or even twice, while juggling the instructions. It’s awful. The second one is better. By the time you get to the fourth one, you are assembling the stool in a fraction of the time.
You might think, “Wow, I’m so good at this I could make it a business to assemble these.” But it is just one skill you now possess. You gain it over a couple of intense hours, but you now have it. This is how focus, discipline, drive, purpose, and experience feed skill and value in the workplace.
I think about all the “white collar” workers I’ve known who would blow a mental gasket if ever asked to do anything remotely this complicated. Forget assembling an iPhone. They couldn’t possibly shop for five households simultaneously, bag the groceries, and deliver them.
It is a skill that is out of reach, and they would be annoyed at the asking. They would probably complain to HR and prepare a lawsuit. They would mess up the first order, deal with irate customers and an officious boss, and reach for the pill bottle or the THC soda to make the pain go away.
At this point in history, I’m just not sure that the professional class in the United States is up to this kind of productivity. The tabooed reality of the lockdown period is that most people truly enjoyed two years of luxurious living and only pretending to work. That period also shattered the drive of many, spoiling an entire generation of elite workers into thinking that making money is easy and effortless.
For 25 years of artificially low interest rates—particularly since 2008—the Fed has cultivated a sense that the entire system is based on a kind of illusion. Sure, some people are rich and some are poor but the difference has nothing to do with the work they do. It’s all about birth, class, credentials, and the luck of the demographic draw.
This is a tragic perception, one completely inconsistent with the traditional American ethos of hard work and class mobility. A feature of the Trump agenda is to recapture and rebuild that idea with a shift in economic structures, including deregulation and tax cuts. The tariffs are part of that, pushed on the assumption that Americans have the stuff necessary to make things again.
A presumption behind this policy is that American investors, entrepreneurs, business builders, and workers are going to hop to it and make wonderful things, while enjoying the protection that the tariffs provide against foreign competition. Even if that happens—it’s a big if—are Americans really ready to go there? The outsourcing of so much manufacturing has gone on for the better part of 50 years.
The actions of this one shopper for Instacart, engaged in a tremendous act of managerial prowess, underscore the point. For generations now, we’ve been told that intelligence and skill are disproportionately distributed in the upper tiers of the U.S. class structure.
Personally, I don’t believe it. It is more likely the opposite: the people who struggle for a living, working two and three jobs to pay the bills, have more skills than most people in the upper third of the income distribution who have never had to worry about paying the bills.
Talk to any serious person in any midsize company today and they will tell you of their struggles. The regulations and taxes are vexing but it is the labor problems day-to-day that really inhibit their operations and progress. It is exceedingly difficult to find workers who will do what they are supposed to do in a timely way, with attention to detail, and without constant hand-holding and praise.
This decline of the American work ethic traces to the educational institutions in part, but also to the reality that most young people in the top half of income earners have never worked a day in their lives until after having earned their credentials.
They are clueless about what it means to embrace a hard job and stick with it until they are done. They resent the authority structures in the workplace and attempt to game the system in the same way that they gamed school for 16-plus years.
It’s one thing to develop skills for survival in classrooms, and a radically different thing to have skills for a new world of manufacturing. Shop classes in high school are mostly gone (only 6 percent of students take them versus 20 percent in the 1980s) and two-thirds of teens eschew remunerative employment completely, simply because it is not necessary. It’s been generations since most people knew anything of farm life, to say nothing of factory life.
Trump is seeking to solve a half-century-old problem in four years. This is a serious challenge, and I cannot say that I’m optimistic. That said, there are real opportunities now for people like the shopper I mentioned above, people who work hard, work well, stick to the task, and are grateful for their opportunities. Sadly, those traits largely elude the graduates of our nation’s most prestigious educational institutions.
