Big Ben's Blunder!
Today, Federal Reserve Chairman Ben Bernanke told of how our increasing productivity didn't automatically translate to an increase in employment.
He went on to say that automation was likely the cause in negatively impacting employment, as there was an increase in demand for highly-skilled workers with a marked decline in demand for skilled and un-skilled personnel.
His answer as usual was our needing to educate and re-train the those under or un-employed and solve the problem. Yes, just send more money to the schools.
What Uncle Ben seems to have over-looked was how a lot of the productivity increase involves importation of partially manufactured products that only need a few simple steps in an effort to make it a finished product. These final-step products are then included in our productivity numbers based on the selling price.
Here are three examples where I am aware of our being snookered!
Example A: A truck frame manufacturer in Texas imports pre-manufactured frame components from Mexico. They then merely complete a few simple steps, paint the frames and labels them as US made products.
Example B: A transit bus manufacturer brings in major components from Canada and simply assembles the vehicles, installing the engines, axles, wheels, decals, seats and such and again claims them a US made product.
Example C: A pipe fitting manufacturer imports unfinished product from China that only needs 'completion' of one last machine function and again the items become another US made product.
The bottom line of all this is, our productivity has fallen in reality and this is made evident in all the empty manufacturing facilities we see all over the country.
We have a problem here and Houston isn't listening.
He went on to say that automation was likely the cause in negatively impacting employment, as there was an increase in demand for highly-skilled workers with a marked decline in demand for skilled and un-skilled personnel.
His answer as usual was our needing to educate and re-train the those under or un-employed and solve the problem. Yes, just send more money to the schools.
What Uncle Ben seems to have over-looked was how a lot of the productivity increase involves importation of partially manufactured products that only need a few simple steps in an effort to make it a finished product. These final-step products are then included in our productivity numbers based on the selling price.
Here are three examples where I am aware of our being snookered!
Example A: A truck frame manufacturer in Texas imports pre-manufactured frame components from Mexico. They then merely complete a few simple steps, paint the frames and labels them as US made products.
Example B: A transit bus manufacturer brings in major components from Canada and simply assembles the vehicles, installing the engines, axles, wheels, decals, seats and such and again claims them a US made product.
Example C: A pipe fitting manufacturer imports unfinished product from China that only needs 'completion' of one last machine function and again the items become another US made product.
The bottom line of all this is, our productivity has fallen in reality and this is made evident in all the empty manufacturing facilities we see all over the country.
We have a problem here and Houston isn't listening.
posted by Localfella at 2:31 PM
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