I don\’t understand

If manufacturing has low profits and pays shit wages, services produce high profits and good wages, why does everyone say we need more manufacturing?

27 thoughts on “I don\’t understand”

  1. Also, many of the people who shout the loudest about needing more manufacturing are also concerned about limits to growth – when on average manufacturing uses more resources than services?

  2. This is one of the things I can’t get my head round.

    The numbers are clear, the analysis relatively simple.

    Why do we want cheap jobs back?

    Actually it looks like it is starting to happen.

    Textile manufacturing in Portugal for the Inditex chain whilst still not quite as cheap as China (with the galloping wage inflation for skilled workers in China it is only a matter of time) offers greater flexibility, shorter runs, better financial terms, less quality problems and the logistical advantage of being next door. Hence a small percentage switch in manufacturing back to Portugal.

    So soon, even more Portuguese will have the opportunity to get back into sweatshops. And I suppose the Chinese unions (if paradise were to allow them) will start to protest. Hasn’t really happened yet in Spain ‘cos the bigger competitors fell apart from Chinese competition. But with the parlous state of our finances it is only a matter of time.

    Still €425/month (but heading north) is better than nothing, isn’t it?

  3. following reasons:-

    1. People with a direct interest in more manufacturing subsidies (manufacturers, trade unionists)

    2. The William Morris Brigade that believe in “honest toil”, sweat, grease, dirt under their fingernails. Generally people who’ve never had to actually do it for a living.

  4. From spending too much time on CiF the reasons given seem to be:

    1) Relatively high wages for poorly educated or non-academic working class males compared to service sector jobs available for them.

    2) Dignity. Metal bashing is a skill in a way that cold calling insurance isn’t.

    3) Job for life. For some reason Guardian types associate manufacturing with a skill for life compared to a service sector job that is forever being offshored to India.

  5. *why does everyone say we need more manufacturing?*

    1. Because what else are you going to do with the mostly willingly unedumecated.

    2. A belief that manufacturing is the “base” upon which services depend

  6. Isn’t this a throw-back to old fashioned mercantilism. We manufactures stuff to export, thereby supposedly building up stores of national wealth.

  7. Reasons for fetishising manufacturing include:
    – a nostalgic feeling that when the UK had mass manufacturing industries they provided a large number of low-skilled jobs and so if manufacturing were to be encouraged there would be a solution to large-scale unemployment in the North (ignoring that technological advances make manufacturing less of a high volume employer than it used to be unless we are able to compete on cost and quality with derided developing world sweatshops – we’re already very strong in high tech high skill high productivity manufacturing).
    – a fear of the abstract and the comfort that manufacturing involves making tangible products and so is somehow real work
    – an Ed Miliband-inspired ambition to revive the policies of Harold Wilson http://botzarelli.wordpress.com/2011/10/03/the-miliband-muddle/

  8. it’s about wages for the low-skilled, I think. What are the really bad paying jobs? Cleaner, care assistant, shop assistant etc. So the idea is presumably that if the manufacturing sector was stronger, that would put upward wage pressure on that segment of the job market. I don’t think anybody is arguing for fewer software engineers and advertising executives, more assembly line workers.

  9. The thing about the service sector is that the service workers (mostly) need to be where their customers are. Manufacturing, on the other hand, can be staffed remotely.

    When too many of the people of one’s country have become markedly distanced from ability to do useful things (like make and serve) cost-effectively, those here who serve badly do have a significant advantage over those here who make badly.

    If, being here, a customer wants to be served, (s)he needs workers who are co-located (ie here).

    On the other hand, if a customer is here and wants a thing, they can have a thing that is made anywhere (and is sold here).

    Eventually, when service becomes too much for even those here who serve, we get immigration (workers who still know how to serve come here to satisfy a shortage of supply) and emigration (customers lacking sufficient quality of service go find it elsewhere).

    So, for increaingly lazy and incompetent people, led by their increasingly lazy and incompetent government, bolstering service jobs is an important part of gradual societal decline (WRT the rest of the world): without them, the decline would be sharper and more unpleasent.

    We actually need all types and levels of ability, as modified over time according to the tools we find useful. By not making good enough use of all our people, we do down all of ourselves.

    The biggest waste in ‘work’ comes, of course, from those who have a living from lobbying unasked on behalf of someone else.

    Best regards

  10. What the Grauniadistas actually want – if you start to analyse it – is for the UK to manufacture more mass produced cr*p (which the Chinese are so much better at but anyways…). Fact is, of course, that we do still have a respectable manufacturing base, but it’s the sort of low volume high quality stuff that’s produced in workshops/hangars/labs where the floor is clean enough to eat your dinner off … and which you can drive past almost without noticing it’s there.

    Not quite the nostalgic Lowry-esque satanic mills that most have in mind though.

  11. No, you don’t understand Grauniadistas. Large manufacturing industries are much easier to unionise than service industries, especially when those service industries are distributed. So obviously, if union power is to be restored to its former glory – which is what the Grauniadistas want – we need manufacturing.

  12. In Guardian land Germany has lots of manufacturing and Germany has low unemployment (particularly youth unemployment). Therefore there must be a connection between the two.

  13. Francis has it, plus with manufacturing you have lots of people in one huge factory. Well in the the mind of a Guardianista. All those people in one place does make it easier to unionise. Services can be spread out all over the place and are always small units. Even call centres don’t need to be huge hangers full of people and can be small offices spread around in cheap locations.

  14. I’m not sure about the union argument.

    Surely if a union wants significant influence and a mass membership it should look to unionise the entire Tesco, Sainsbury & Asda staff. No manufacturing enterprise comes anywhere close to that size of personnel.

  15. As someone who took a job in insurance when I couldn’t get a job in manufacturing I may be prejudiced, *but* without manufacturing (including food production) all the very rich workers in service industries would be homeless, naked and starving. So we do need manufacturing.
    Whether one particular country needs more manufacturing is a more complex question and depends, inter alia, upon the mismatch between its workforce and its employment. BUT the extra cost of shipping manufactured goods from China over what it would cost to manufacture them here if we abolished the NMW, or just reduced the clawback element in the tax credit system is an argument for increasing UK manufacturing.

  16. In Guardian land Germany has lots of manufacturing and Germany has low unemployment (particularly youth unemployment). Therefore there must be a connection between the two.

    Doesn’t Germany subsidise manufacturing and the government and unions cooperate to keep down wages?

  17. why does everyone say we need more manufacturing?

    To mask the failure of our education system to produce the high skilled workers that attract high skilled and rewarding employment.

  18. Can we have a bloody great condition imposed on this discussion?

    # IN THE PRIVATE SECTOR #

    Hadn’t noticed any reluctance amongst Guardianistas to the massive increase in public sector employment, the last few years. Almost entirely service sector.

    And what Frances says.

  19. Yes, let’s all rant on about the merits of the private sector (Bob Diamond, Fred Godwin, whoever was in charge of HBOS). They’ve all done us proud. Unlike, say, people running National Aavings in Newcastle who do what merchant wankers do (but for less money) and the buyers do OK.

    I’m all for scepticism about manufacturing and manual labour – bee n there , done that, hard work for bugger all money).

  20. The UK and the USA are running large balance of payments deficits. (Germany is running a large surplus.) Perhaps the Guardianistas suspect that the most likely way to fix that is to make stuff we can sell to the rest of the world, and that selling services to each other isn’t going to help at all. Perhaps they’ve got a point.

  21. Legalise all sin and agressively promote it. Little training and high mark up.
    Good for tourism too.

  22. @Luke

    When did National Savings last organise and underwrite an IPO, assist in the hedging of the interest rate exposure of a large insurance company, make a market in gilts, make a market in FX, advise a company on a merger.

    It may do a good job, but NS is not an investment bank.

  23. Oddly those who call for more manufacturing loudest don’t seem all that keen on actually starting their own manufacturing companies. Not even that champion of workshops, Will Huton. The trademark for Willies Widgets remains sadly unused.

  24. Pingback: Apple v. Foxconn: High profit for Apple, low profit for manufacturer Foxconn | motorcitytimes.com

  25. NS is the UK financial institution that’s provided me with the second-worst customer service out of all of them (Santander is worst, obviously).

  26. Dennis The Peasant

    In the USA the answer to that question is obvious:

    Schools can’t provide a large number of students with the core skills needed (reading, writing, math) to do much of anything beyond standing on an assembly line tightening bolts.

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