Manufacturing Wages - the myth

[Jason]

What's the matter with you conman?

Are you an illegal?

 

[agman]

On numerous occasions members of this forum have used the excuse that we are exporting high paying jobs in manufacturing for low paying sevice sector jobs. The most recent member to take this position is OT. I did not expect he had knowledge or the facts to back his statement or he would not have made the statement. Nor did I expect he could or would provide the data required to back his statement. The following data dispells the myth regarding manufacturing job horly earnings versus service sector jobs.

Manufacturing average hourly wage = $16.94 / hr

Service sector average hourly age = $16.65. / hr

Only five groups within the manufacturing sector have an hourly wage greater than the average wage in the service sector.

Seven groups within the service sector have a higher hourly wage than the average hourly manufacturing wage. Two service sector groups have hourly wages that exceed the highest hourly wages paid in manufacturing. Only one service sector group has an hourly avege wage below the lowest average hourly manufacturing wage.

Additionally, the decline in manufacturing jobs is not the result of jobs being exported. Rather, the decline in manufacturing jobs is directly correlated and caused by tremendous advances in productivity in the manufacturing sector. Thus, while manufacturing jobs have declined since the 1970's manufacturing output has soared to record levels. The record their is quite stunning.

What makes the headlines is jobs that are out-sourced while those higher paying jobs that are in-sourced seldom ever make the news and certainly never the headlines.

Maybe you ought to list what is included in the "service" category.

Since you have made the same unsupportable claim that OT did I would assume a junior level banker would know the service categories. Once again I must have overestimated your level of knowledge. I know, you have done more indepth research than the fed economists!!!

Truly, what difference does it make? The sham claims were shot to hell with the facts which I posted. Your response is just another example of "facts be damned" I know better.

 

[agman]

Interesting article Econ. I wonder if Agman's average wages are weighted averages (modes) or just midpoints?

Example: 10 people getting $1 per hour, 1 person gettting $10 per hour. Midpoint is $5.50. True average, or weighted average is $1.82.

Rod

Interesting point you are attempting to make. Once again if you actually studied the data you would know the answer.

Service jobs are categorized into numerous groups just as manufacturing jobs are. The reason I broke the income data down as I did was to the show the fallacy of service wages. Someone with your claimed education should have figured that out on your own. Don't confuse intelligence or education with knowledge. They are vastly different items.

 

[Anonymous]

Could all this data be something like many of the conservative financial folks and economists are saying now about the inflation rate-- that both the Clinton and Bush administration have been cooking the books for the last 10+ years, and that instead of the 2% inflation they have been putting out- the inflation rate is really running now somewhere between 7 and 10% :???:

That fits in with more of the people out there in the real world-- instead of those sitting in an Ivory tower Denver penthouse office....

Try to sell that 2.8% figure to any farmer/rancher that bought trucks, machinery, gas, fertilizer, steel equipment, lumber, land, etc. this year and they will laugh you out of town......

 

[Econ101]

Agman, again, you dodged the question. Are you afraid of it? Where is your data coming from?

 

[agman]

On numerous occasions members of this forum have used the excuse that we are exporting high paying jobs in manufacturing for low paying sevice sector jobs. The most recent member to take this position is OT. I did not expect he had knowledge or the facts to back his statement or he would not have made the statement. Nor did I expect he could or would provide the data required to back his statement. The following data dispells the myth regarding manufacturing job horly earnings versus service sector jobs.

Manufacturing average hourly wage = $16.94 / hr

Service sector average hourly age = $16.65. / hr

Only five groups within the manufacturing sector have an hourly wage greater than the average wage in the service sector.

Seven groups within the service sector have a higher hourly wage than the average hourly manufacturing wage. Two service sector groups have hourly wages that exceed the highest hourly wages paid in manufacturing. Only one service sector group has an hourly avege wage below the lowest average hourly manufacturing wage.

Additionally, the decline in manufacturing jobs is not the result of jobs being exported. Rather, the decline in manufacturing jobs is directly correlated and caused by tremendous advances in productivity in the manufacturing sector. Thus, while manufacturing jobs have declined since the 1970's manufacturing output has soared to record levels. The record their is quite stunning.

What makes the headlines is jobs that are out-sourced while those higher paying jobs that are in-sourced seldom ever make the news and certainly never the headlines.

agman, you will note that I have not been one talking about the level of wages. I believe that is less important than the underlying one you are not mentioning. That is that regardless of the wages involved, the job movement has been away from jobs that create tradeable goods and services to jobs that do not.

The Commerce Department has also provided a list of the jobs of the future with the greatest expected demand. Seven out of ten require no training above high school. These do not present a good picture for the future.

The bottom line is that the US MUST produce tradeable goods or services or sell its assets. It has no other choice.

The China currency problem highlights another issue. If currencies are not freely traded then all "free" trade is a sham.

Unfortunatley OCM you seem to be completly out of the loop in terms of the thinking and research going on within the fed and many economic circles. Known fact; manufactured widgets are easy to count. Our outdated accounting system is good at counting widgets but not very good at assigning a value to or counting the service sector. As such, many economists are recognizing the fact that the service industry, which does not trade widgets but in many cases gets paid for intellectual property is not being accounted for properly or fully. There are those who believe that if all service trade was properly accounted for we may actually be running a trade surplus. I am not in that camp but certainly do understand the accounting deficiencies and pitfalls that can and do exist.

This goes one step further in that eocnomic growth may be understated by the tune of $1.0 trillion dollars due to accounting deficiencies. There is serious move underway to correct this problem and better understand its implications. Generally, tax receipts grow consistent with economic growth. That has not been the case in recent years as tax receitps have outstripped the growth rate of the economy. This again, strongly suggests that all economic growth, especially service trade, is not being properly accounted.

I find it interesting that after sixty years of the same claims being made today by you and others that this economy produces more jobs and a better standard of living than all the other industrialized nations combined. Our record of economic growth is truly astounding. In short, the results dispell the claims. I am more interested in the results than the many claims that would suggest the opposite should have occurred. The current Fed Chairman has been quoted saying something similar regarding economic results versus unfullfilled claims of economic disaster.

Question: Would you post for readers the tend in our exports? Are exports going up or down? It think they deserve to know the truth.

As I previoulsy stated we could resolve the stated trade deficit by inducing a recession of depression. Incomes would drop and we could not afford many goods now imported from China. In turn, China would not reinvest those trade dollars back into the U.S. economy. That sounds like a grand solution!!! Have a cool one.

 

[Econ101]

Agman, again, you dodged the question. Are you afraid of it? Where is your data coming from?

 

[Sandhusker]

Agman, "In turn, China would not reinvest those trade dollars back into the U.S. economy."

Thats a way to sugarcoat the Chinese buying our country out from under us.

 

[ocm]

Unfortunatley OCM you seem to be completly out of the loop in terms of the thinking and research going on within the fed and many economic circles. Known fact; manufactured widgets are easy to count. Our outdated accounting system is good at counting widgets but not very good at assigning a value to or counting the service sector. As such, many economists are recognizing the fact that the service industry, which does not trade widgets but in many cases gets paid for intellectual property is not being accounted for properly or fully. There are those who believe that if all service trade was properly accounted for we may actually be running a trade surplus. I am not in that camp but certainly do understand the accounting deficiencies and pitfalls that can and do exist.

This goes one step further in that eocnomic growth may be understated by the tune of $1.0 trillion dollars due to accounting deficiencies. There is serious move underway to correct this problem and better understand its implications. Generally, tax receipts grow consistent with economic growth. That has not been the case in recent years as tax receitps have outstripped the growth rate of the economy. This again, strongly suggests that all economic growth, especially service trade, is not being properly accounted.

I find it interesting that after sixty years of the same claims being made today by you and others that this economy produces more jobs and a better standard of living than all the other industrialized nations combined. Our record of economic growth is truly astounding. In short, the results dispell the claims. I am more interested in the results than the many claims that would suggest the opposite should have occurred. The current Fed Chairman has been quoted saying something similar regarding economic results versus unfullfilled claims of economic disaster.

Question: Would you post for readers the tend in our exports? Are exports going up or down? It think they deserve to know the truth.

As I previoulsy stated we could resolve the stated trade deficit by inducing a recession of depression. Incomes would drop and we could not afford many goods now imported from China. In turn, China would not reinvest those trade dollars back into the U.S. economy. That sounds like a grand solution!!! Have a cool one.

So you invoke a "you don't understand the stuff" argument. It sounds more like voodoo accounting to me. In all of world history nothing has ever worked this way, but now somehow the rules of trade are different than they have ever been before. This really is faith-based economics. The economists are saying, "trust me the trade deficit doesn't matter." And when they are asked why not, they answer, "you wouldn't understand the explanation."
It is a fact that international trade is manipulated by currency manipulation. Does currency manipulation matter. YES, it means "free" trade is really manipulated trade.
As to the service sector being counted as exportable, there are probably a few things that could be counted that way. Like broker commissions for foreign customers. But foreign countries indeed have more dollars in reserve than ought to be the case. If anybody is really making an understandable and rational case concerning the service sector "exports" being undervalued sufficiently to make up for the "apparent" trade deficit, by all mean point me to it.
This seems a little bit like arguing over whether the ship is sinking and I have said that we're taking in more water than we're pumping out. Then you say I haven't figured in the evaporation factor. OK, then let's look at the water level on the outside of the ship(foreign currency reserves).

 

[DiamondSCattleCo]

Interesting article Econ. I wonder if Agman's average wages are weighted averages (modes) or just midpoints?

Example: 10 people getting $1 per hour, 1 person gettting $10 per hour. Midpoint is $5.50. True average, or weighted average is $1.82.

Rod

Interesting point you are attempting to make. Once again if you actually studied the data you would know the answer.

Service jobs are categorized into numerous groups just as manufacturing jobs are. The reason I broke the income data down as I did was to the show the fallacy of service wages. Someone with your claimed education should have figured that out on your own. Don't confuse intelligence or education with knowledge. They are vastly different items.

I'm not completely sure how the above response answers my query. All you gave us were numbers that stated average manufacturing wages versus service industry wages. I'm asking what kind of average are we talking about? Weighted averages (modes) based on the number of people actually employed in a position at a given wage point or simply an average of what companies pay for a given position? The two numbers could be radically different and I don't have any idea of what numbers you have access to that enabled you to post the averages. Its got nothing to do with education or intelligence, except that I am bright enough to ask how the numbers were arrived at to see if they are even remotely insightful.

Rod

 

[Econ101]

Interesting article Econ. I wonder if Agman's average wages are weighted averages (modes) or just midpoints?

Example: 10 people getting $1 per hour, 1 person gettting $10 per hour. Midpoint is $5.50. True average, or weighted average is $1.82.

Rod

Interesting point you are attempting to make. Once again if you actually studied the data you would know the answer.

Service jobs are categorized into numerous groups just as manufacturing jobs are. The reason I broke the income data down as I did was to the show the fallacy of service wages. Someone with your claimed education should have figured that out on your own. Don't confuse intelligence or education with knowledge. They are vastly different items.

Agman, how can anyone study the data? You won't name your sources. They are suspect until you do.

The illusion of superior knowledge has gone to your head. You might be able to pull that stuff on the average rancher, but do you really think we are going to fall for it?

The fact is that your analysis can not stand up to critical scrutiny because you will not share where you get your assumptions and your data.

You are one piece of work there, Agman. You are a legend in your own mind.

 

[DiamondSCattleCo]

As such, many economists are recognizing the fact that the service industry, which does not trade widgets but in many cases gets paid for intellectual property is not being accounted for properly or fully. There are those who believe that if all service trade was properly accounted for we may actually be running a trade surplus. I am not in that camp but certainly do understand the accounting deficiencies and pitfalls that can and do exist.

Agman, I'm also curious as to what you and your sources consider "service industries". It sounds as though you are considering R&D type jobs as services. Perhaps things have changed radically since I was in school, but technical R&D positions that generate intellectual property weren't considered service positions, but rather professional or technical positions.

If you are considering professional or technical positions as services, I can see why your wage averages are higher than I would have expected. It also points to a failure in your basic analysis of how losing manufacturing jobs is not hurting the economy. Picture a small-town US lumber mill closing its doors (a subject near and dear to my heart, since my local town just lost its biggest employer, the sawmill). In reality, the jobs in the "service industries" will actually be reduced as well, since they have nothing to service any longer. There will be no professional or technical positions opening up to make up for the lack of jobs in the manufacturing industry. There will be a exodus of population, where they will move to the larger city centres, perhaps gaining employment in one of your "services", ie: professional or technical.

Whats the problem with that you say? Well, we may have gained some economic efficiency, however there is no measurement of the effect of losing the small town. I don't believe that most government analysts, or even economists, remotely comprehend how small town USA or small town Canada keep our nations afloat. The effects are simply too difficult to measure, or are ignored completely. How do you measure the effect on the economy when a producer has to travel 60 miles to gain access to emergency veterinary services, when it was previously a 5 mile trip? Or he has to travel 200 miles to ship his livestock when previously it was only a 20 mile trip? Its easy for most government officials to bury those effects or ignore them all together, since most primary producers don't operate on a cost plus basis.

Rod

 

[agman]

Could all this data be something like many of the conservative financial folks and economists are saying now about the inflation rate-- that both the Clinton and Bush administration have been cooking the books for the last 10+ years, and that instead of the 2% inflation they have been putting out- the inflation rate is really running now somewhere between 7 and 10% :???:

That fits in with more of the people out there in the real world-- instead of those sitting in an Ivory tower Denver penthouse office....

Try to sell that 2.8% figure to any farmer/rancher that bought trucks, machinery, gas, fertilizer, steel equipment, lumber, land, etc. this year and they will laugh you out of town......

What is wrong OT, did you fall off the ...end of a horse again? Your view never changes from where you sit-how pathetic!!! Given your propensity to develop opinions based upon limited and shallow observations I fully trust your personal calculation or opinion of inflation is just as wrong and misguided as many or your other positions.

 

[Anonymous]

Could all this data be something like many of the conservative financial folks and economists are saying now about the inflation rate-- that both the Clinton and Bush administration have been cooking the books for the last 10+ years, and that instead of the 2% inflation they have been putting out- the inflation rate is really running now somewhere between 7 and 10% :???:

That fits in with more of the people out there in the real world-- instead of those sitting in an Ivory tower Denver penthouse office....

Try to sell that 2.8% figure to any farmer/rancher that bought trucks, machinery, gas, fertilizer, steel equipment, lumber, land, etc. this year and they will laugh you out of town......

What is wrong OT, did you fall off the ...end of a horse again? Your view never changes from where you sit-how pathetic!!! Given your propensity to develop opinions based upon limited and shallow observations I fully trust your personal calculation or opinion of inflation is just as wrong and misguided as many or your other positions.

Ain't just me saying it-- Many of the financial folks, that are tired of the spend, borrow more, and sell out our country attitude of the neo-cons in the Bush administration and the Congress, are now saying it- after taking a closer look at the figures the government has/hasn't been putting out....

Maybe in your Denver Penthouse your afternoon martinis and business luncheons haven't risen- but if your making a living using gas, fuel, fertilizer, sprays, pharmaceuticals, equipment -- you question whether the 10% figure isn't too low......

 

[agman]

As such, many economists are recognizing the fact that the service industry, which does not trade widgets but in many cases gets paid for intellectual property is not being accounted for properly or fully. There are those who believe that if all service trade was properly accounted for we may actually be running a trade surplus. I am not in that camp but certainly do understand the accounting deficiencies and pitfalls that can and do exist.

Agman, I'm also curious as to what you and your sources consider "service industries". It sounds as though you are considering R&D type jobs as services. Perhaps things have changed radically since I was in school, but technical R&D positions that generate intellectual property weren't considered service positions, but rather professional or technical positions.


If you are considering professional or technical positions as services, I can see why your wage averages are higher than I would have expected. It also points to a failure in your basic analysis of how losing manufacturing jobs is not hurting the economy. Picture a small-town US lumber mill closing its doors (a subject near and dear to my heart, since my local town just lost its biggest employer, the sawmill). In reality, the jobs in the "service industries" will actually be reduced as well, since they have nothing to service any longer. There will be no professional or technical positions opening up to make up for the lack of jobs in the manufacturing industry. There will be a exodus of population, where they will move to the larger city centres, perhaps gaining employment in one of your "services", ie: professional or technical.

Whats the problem with that you say? Well, we may have gained some economic efficiency, however there is no measurement of the effect of losing the small town. I don't believe that most government analysts, or even economists, remotely comprehend how small town USA or small town Canada keep our nations afloat. The effects are simply too difficult to measure, or are ignored completely. How do you measure the effect on the economy when a producer has to travel 60 miles to gain access to emergency veterinary services, when it was previously a 5 mile trip? Or he has to travel 200 miles to ship his livestock when previously it was only a 20 mile trip? Its easy for most government officials to bury those effects or ignore them all together, since most primary producers don't operate on a cost plus basis.

Rod

An educated person such as yourself should know where to find the data; I am not your librarian. The real question is not how the govenment classifies the "service" sector but how your personal and narrow view differs from their classification which is all encompassing. Pehaps the real lesson to be learned is that if you do not know the classifications then you should not render an opinion per this subject. To do so suggests your opinion lacks factual backing.

Congrats, you at least have not blamed Wal-Mart yet. Why don't you check the data you profess concern about and tell all the readers the trend over the past 100-150 years in rural America or Canada. Does that tend differ from the present trend? If not, then what was the cause in previous periods when the conditions you cite as "cause" did not even exit?

Regarding manufacturing jobs you failed completely to understand the productivity of the manufacturing sector. Are we better off employing three times a many people in manufacturing and producing less? BTW, the last time I checked this economy and yours were at or near full employment.

Before you make statements or express an opinion study the data so you have at least a remote idea of what you are talking about. Intelligence without knowedge is a dangerous game you play.

 

[Sandhusker]

Am I the only one here who didn't catch Agman answering any of the questions posed to him?

 

[Anonymous]

Am I the only one here who didn't catch Agman answering any of the questions posed to him?

Nope-- He reminds me of old "only the FACTS" ~Stuper Hero~......Their arrogance proceeds them-- kind of like the smell of a polecat...

 

[DiamondSCattleCo]

1) An educated person such as yourself should know where to find the data; I am not your librarian. The real question is not how the govenment classifies the "service" sector but how your personal and narrow view differs from their classification which is all encompassing. Pehaps the real lesson to be learned is that if you do not know the classifications then you should not render an opinion per this subject. To do so suggests your opinion lacks factual backing.

2) Congrats, you at least have not blamed Wal-Mart yet. Why don't you check the data you profess concern about and tell all the readers the trend over the past 100-150 years in rural America or Canada. Does that tend differ from the present trend? If not, then what was the cause in previous periods when the conditions you cite as "cause" did not even exit?

3) Regarding manufacturing jobs you failed completely to understand the productivity of the manufacturing sector. Are we better off employing three times a many people in manufacturing and producing less? BTW, the last time I checked this economy and yours were at or near full employment.

4) Before you make statements or express an opinion study the data so you have at least a remote idea of what you are talking about. Intelligence without knowedge is a dangerous game you play.

1) :roll: You made a statement that I think is wrong. Now I'm asking you to defend your conclusions and present the data that you used to form those conclusions.

As far as your comments vis-a-vis ignorance of what entails a service industry, I believe its your ignorance thats showing. Whenever someone makes an economic analysis, they MUST list their assumptions and define their terms, especially one like "service industry". In Canada, I know when I read a government study that uses the term service industry, I know they're speaking of "burger flippers and sales people", however the definition of service industry is available to those who don't know how the government classifies services. All you're doing is allowing your government to expand the term service industry to include those positions that are not considered services to reputable economists.

2) I am perfectly aware of the trend towards population gravitating towards large centres. How does that change it being a bad thing?

3) I am not even remotely arguing the productivity of the manufacturing sector, but only speaking of the jobs that HAVE been lost to Mexico, India, China, etc etc etc. To bring up the enhanced productivity is only trying to cover up the loss of jobs and confuse the issue. Stick to the issue at hand. Argue that losing jobs to another country is a good thing.

4) Agman, I'm asking you to defend yourself. You should maybe re-read what you've wrote and apply that to yourself. People are noticing that you refuse to present your data and defend your conclusions. Why is that? Is it because you don't know? Or have you simply made up stuff? Can the subtle insults and start presenting some data.

Rod

 

[Econ101]

Agman quotes data but does not quote the source. Agman did you get points taken off in high school for your lack of a bibliography? Do you even know what that is?

You expect to misquote facts and then ask us to accept them?

Is that what you do with your clients? Agman knows best kind of thing?

 

[Jason]

Real life examples.

3/8 osb last fall $13 per sheet...this fall $5.70 per.

2x6-16' boards $7.90 last fall ... $5.63 this fall.

Years ago this place took 8-11 full time men to run it. Now I do it with me full time and dad part time. We raise more pounds of beef too.

The Calgary news has been doing stories on 40 and 50 year mortgages. Even with income figures of over 80k per year buyers are looking at longer terms to finance higher priced homes.

Long term debt is the norm, although not popular with ag types that have seen ressions and/or depressions.