Maybe Manufacturing is Our Savior After All

A few counterpoints to the argument I made in my previous post that I thought were interesting:

I received some interesting feedback from my Facebook post on this as well complaining I (or the New York Times article I linked) may have been a bit unfair to McDonald’s. Nobody is saying a McDonald’s job is bad, especially if it pays competitively. The important thing is if we are going to pour public subsidies into job training we should use it to direct people into fields where they will receive higher wages than they can get without job training.

There is also much to be said in regards to the clustering impact of having manufacturing available here. There is a lot of innovation that occurs on the ground from people who are intimately familiar with the process of making things. It may be strategic to target specific sectors in hope of becoming a cluster or center for something (like Connecticut is doing with their stem-cell research funding). The jury might still be out on the effectiveness of that, but look what happened when China dumped tons of resources into solar energy and crushed the American manufacturers.

There is no Skills Gap and Manufacturing is Not Our Savior

Adam Davidson of NPR’s Planet Money basically concludes the same thing as I about these mythical manufacturing jobs:

And yet, even as classes like Goldenberg’s are filled to capacity all over America, hundreds of thousands of U.S. factories are starving for skilled workers. Throughout the campaign, President Obama lamented the so-called skills gap and referenced a study claiming that nearly 80 percent of manufacturers have jobs they can’t fill. Mitt Romney made similar claims. The National Association of Manufacturers estimates that there are roughly 600,000 jobs available for whoever has the right set of advanced skills. Eric Isbister, the C.E.O. of GenMet, a metal-fabricating manufacturer outside Milwaukee, told me that he would hire as many skilled workers as show up at his door. Last year, he received 1,051 applications and found only 25 people who were qualified. He hired all of them, but soon had to fire 15. Part of Isbister’s pickiness, he says, comes from an avoidance of workers with experience in a “union-type job.” Isbister, after all, doesn’t abide by strict work rules and $30-an-hour salaries. At GenMet, the starting pay is $10 an hour. Those with an associate degree can make $15, which can rise to $18 an hour after several years of good performance. From what I understand, a new shift manager at a nearby McDonald’s can earn around $14 an hour.

via Skills Don’t Pay the Bills - NYTimes.com.

Also powerful is this post from Al Wenger of Union Square Ventures. These both lead to an unfortunate conclusion: until wages go back up I do not see how manufacturing is going to sustain our economy.

Giving Thanks

This year I am thankful to my friends in the fields of medicine and science. Today we live in a world where we can literally bring people back from being dead, cure cancer, and build replacement limbs. In our world a robotic exoskeleton can let a paralyzed person walk again. Immunizations mean that we need not experience the pain of polio or scariness of smallpox. Miracle drugs treat or cure diseases and conditions that would otherwise make life unbearable for many. What the doctors and scientists accomplish never ceases to amaze me, and I can only imagine what they will do next year.

That is why I am also thankful for the re-election of President Obama and the passage of healthcare reform. Our leaders are taking important steps to democratizing access to these treatments and as someone under 26 I have benefitted from the extension of parental health insurance that our leaders signed into law. The cost of healthcare locks people into jobs and makes it harder for entrepreneurs to start companies. There are few investments that I think will yield as many dividends as investing in the health of the American people.

Finally I am thankful to the taxpayers of Connecticut and the United States. They have generously chosen to invest in my future and education by subsidizing my loans and part of my law school tuition. The taxpayers of Connecticut even gave me a job for the rest of the year. It is my hope that I do not turn out to be a junk asset and will yield high returns for everyone.

Happy Thanksgiving!

The Connecticut Budget Crises

I think that the looming Connecticut budget crises is a bit scary. I am a bit too tired to process the entire report that the CT Mirror linked to from the Office of Fiscal Analysis but skimming it one thing stands out at me: tax collections are less than expected. The Mirror also explains that enrollment in Medicare is higher. Whenever the governor and legislature put together a budget they are playing a guessing game. They can set tax rates for the future but they do not know how much revenue it will create until it actually occurs. Spending on these social insurance programs is not certain either. The accountants and economists have methods to predict what these might be, but these are always subject to uncertainty. That is why we are left with a gap: the guess was different from the actual revenues or expenditures.

Governor Malloy has suggested that tax increases are off the table. This means there will be spending cuts. What we do not yet know are what these spending cuts will be nor their impact on the economy. When we entered this recession years ago I thought we would be in a recovery by now. Unfortunately we are crawling out inch by inch instead of being lifted out by a rising tide.

Paul Graham on Start-up Ideas

If you’ve ever been thinking about starting your own company and are interested in technology you probably follow Paul Graham. Today he posted his essay on how to get ideas for your start-up company and it’s a great read:

The way to get startup ideas is not to try to think of startup ideas. It's to look for problems, preferably problems you have yourself. The very best startup ideas tend to have three things in common: they're something the founders themselves want, that they themselves can build, and that few others realize are worth doing. Microsoft, Apple, Yahoo, Google, and Facebook all began this way

I thought it was especially interesting that he pointed out Facebook and Microsoft both launched during Harvard’s reading period. It seems a long natural period of downtime is the perfect catalyst for getting some of these startups off the ground. No wonder Google lets employees use 20% of their time on their own projects.

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