Trends (continued)

The move to automation is a great boost to productivity and is one of the reasons that income inequality is growing. The number of people in corporate offices is not declining except maybe in some clerical and support people while the factory floor is full of machines and a few machine operators.  The workers who used to have these jobs are working in lower paying service jobs, self employed or unemployed.

The most telling statistic is the story in the chart below where output per worker has been increasing exponentially.



Without turning this is to a chart and statistics fest, the basic point is that while China has seen a great increase in manufacturing output, the US has been increasing also.  However, in the US the increase is being driven by automation, not workers.

Now the manufacturing that is worker intensive has shifted to China and other countries but these are not the high paying manufacturing jobs that people lost, these are low paying jobs that are not worth automating.  If these companies brought this work back to the US they would either automate it or abandon it since they would be non-competitive.

(to be continued)