Steel jobs are gone forever

CNN has an interesting article on Trump supporters in Youngstown, Ohio. Trump fans will like what they read (even 18 Democratic precinct captains voted for Trump).  But what struck me was the interview with voters.  I don’t know what makes me sadder, the fact that they think Trump sincerely wants to help them, or their belief that he could bring back steel jobs if he were sincere. Contrarian intellectuals tell us regular intellectuals that we need to “listen” to what the working class voters are saying.  But when I listen all I hear are pathetic fairy tales.

Back in 1967, the US steel industry employed about 780,000 workers, and produced about 115 million tons of steel.  By 2015, employment had fallen to 90,000, producing about 79 million tons of steel.  In both years the US consumed about 130 million tons of steel.  (I’m not sure these figures are exactly right, but I think they are close enough.)

The bottom line is that even if we still produced 115 million tons, or even upped it to 130 million, the level of employment in steel would be in the 120,000 to 150,000 range.  The vast majority of those 780,000 steel jobs were lost to automation, and they aren’t coming back.

Back in the late 1800s, William Jennings Bryan told farmers their problems were caused by eastern bankers, whereas the real problem was that rapid productivity improvements were relentlessly lowering relative food prices and driving farmers into the cities. Trump blames Mexico and China for problems that are actually caused by automation.

PS.  I’m not certain about the 780,000 figure, which was derived by multiplying 4.4% times 17.9 million manufacturing workers in 1967.  This source reports 521,000 steel employees in 1974, and another source listed 680,000 in 1953.  So I’m not sure the peak employment level.  There may be definitional issues from different sources.

Update:  A helpful reader sent me the following:

The Statistical Abstract of the US seems a fair choice, and the 1968 release provides numbers for workers in “Blast furnace and basic steel products” and “Iron and steel foundries” on page 59 of the PDF linked below (page 221 of the original publication).

All workers In Blast furnace / basic steel products: 631K

All workers in Iron and steel foundries:  225K

Total = 856K

Production Workers In Blast furnace / basic steel products: 506K

Production workers in Iron and steel foundries:  190K

Total: 696K

Statistical Abstract of the US 1968

Your estimate of 780K is just about the midpoint between the 2 totals.

PPS.  The Springsteen song “Youngstown” lamented the collapse of a once proud economic dynamo.  It was written in 1995, before Trump scapegoats like NAFTA and China had any significant impact.

Then:
Screen Shot 2016-07-18 at 3.40.30 PMScreen Shot 2016-07-18 at 3.57.37 PM
Now:

Screen Shot 2016-07-18 at 3.48.53 PM


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79 Responses to “Steel jobs are gone forever”

  1. Gravatar of Luis Pedro Coelho Luis Pedro Coelho
    19. July 2016 at 06:54

    “The bottom line is that even if we still produced 115 million tons, or even upped it to 130 million, the level of employment in steel would be in the 120,000 to 150,000 range.”

    Even that is an over-estimate, marginal steel production would be more automated than the average.

  2. Gravatar of ssumner ssumner
    19. July 2016 at 06:59

    Luis, Good point.

  3. Gravatar of Benny Lava Benny Lava
    19. July 2016 at 07:02

    This is an excellent post. Places like Youngstown Ohio and Flint Michigan have no future and everyone knows it. But who is out there campaigning for these people? Trump. Does it really matter what policies he favors?

    Remember when I told you that the conservative view on race and poverty wasn’t culture but genetics? Trump did a good job of proving me right. Maybe you just aren’t a conservative anymore.

    P.S. I hear Trump is polling better with evangelicals than Romney.

  4. Gravatar of Brian Donohue Brian Donohue
    19. July 2016 at 07:11

    Excellent post, Scott. This is not rocket science, but for some reason economists are uninterested with sharing these kinds of perspectives. You are a huge credit to your profession. Thank you.

    Billy Joel wrote Allentown in 1982.

  5. Gravatar of Daniel Griswold Daniel Griswold
    19. July 2016 at 07:39

    Yes, Scott’s analysis is right on the mark. Those who want to blame NAFTA and China for the demise of steel jobs in Youngstown should consider this: If you talk to long-timers in Youngstown, they will remember the crucial date of September 19, 1977. That is known locally as “Black Monday,” the day Youngstown Sheet and Tube announced the closure of a large part of its operations there. Of course, that date was 15 years before we signed NAFTA, before China even began its reforms and almost 25 years before it joined the WTO.

  6. Gravatar of Chuck Chuck
    19. July 2016 at 08:06

    Sure, but it’s more fun to blame foreigners.

  7. Gravatar of CMOT CMOT
    19. July 2016 at 08:12

    “[W]hen I listen all I hear are pathetic fairy tales.”

    But what else is left to them? The Dem and Repub political establishments offer them little beyond food stamps and Oxycontin.

    You and the better sort of intellectuals offer them nothing but contempt and scorn.

    The identity and grievance politics taking over our culture generally paints them as the bad guys. The worst thing that Trump is doing is adapting & turning the story around so that now they are victims, too, and get crazy pie in the sky solutions like every other victim class gets.

  8. Gravatar of W. Peden W. Peden
    19. July 2016 at 08:18

    “The worst thing that Trump is doing is adapting & turning the story around so that now they are victims, too, and get crazy pie in the sky solutions like every other victim class gets.”

    This is a very good observation and also consistent with Scott’s observations, which are also excellent.

  9. Gravatar of ssumner ssumner
    19. July 2016 at 08:19

    Benny, You said:

    “Remember when I told you that the conservative view on race and poverty wasn’t culture but genetics? Trump did a good job of proving me right. Maybe you just aren’t a conservative anymore.”

    Trump proved that poverty is about genetics? That’s one I’d never heard. (Just to be clear, I’d guess that genetics does play SOME role in poverty, but I would not look to Trump for “proof”. Indeed his example suggests the opposite, a complete and utter moron who somehow became a billionaire.)

    And given that I’ve never viewed myself as a conservative, I guess I’m not conservative any longer, as you indicated.

    Brian and Daniel, Thanks. These problems do have deep roots.

  10. Gravatar of ssumner ssumner
    19. July 2016 at 08:26

    CMOT, In fairness, I do agree that the Dems sometimes pander to African American voters, making unrealistic promises.

    And I don’t think there was any scorn in my post, I said it makes me feel sad that they are being suckered by this con man. But lots of upper middle class white voters are also being conned by Trump, so it isn’t just the working class.

    I would add that I don’t judge people by their political views—one can be a fine person and have lousy political views, and vice versa.

    If I was a young working class person in Youngstown, I’d consider moving to Dallas or Houston. Or at least Columbus.

  11. Gravatar of AbsoluteZero AbsoluteZero
    19. July 2016 at 08:39

    Scott,
    Right. And it’s not just automation and better technology leading to higher productivity. Many applications that used to require steel now use other, better materials.

    The new world of material science is wonderful. It will employ far more people than the steel industries (worldwide, not just the US one) ever did. But they will be scientists, researchers, engineers, technicians and workers in the various new material industries, they will be the new “steel workers”.

    And Daniel Griswold makes a very important point. Many people believe a lot of things based on seemingly obvious correlations. But on closer examination many are revealed to be untrue as the dates just don’t line up. But, sadly, and not unexpectedly, many continue to believe such things.

  12. Gravatar of Benny Lava Benny Lava
    19. July 2016 at 08:40

    “Trump proved that poverty is about genetics?”

    No dummy. Trump proved that deep down that is the conservative view. Conservatives are wrong about a lot of things.

  13. Gravatar of E. Harding E. Harding
    19. July 2016 at 08:47

    In any case, America must be made Great Again. Trump is far more likely to do that than Her.

    BTW, I found the Trump vote/Hillary vote ratio in Mahoning County unimpressive, and not that different from the Romney vote/Obama vote. I suspect Trump will perform better than Romney there, but not by much.

    Make America Great Again!

    Trump/Pence: Makes Sense!

    “I said it makes me feel sad that they are being suckered by this con man.”

    -Every stinking politician is a con man. Trump is just the best of them.

    “I hear Trump is polling better with evangelicals than Romney.”

    -Maybe. Rmoney was an elitist Mor(m)on, Trump isn’t that.

  14. Gravatar of E. Harding E. Harding
    19. July 2016 at 08:47

    “Trump proved that deep down that is the conservative view.”

    -LOLNo.

  15. Gravatar of Jim Glass Jim Glass
    19. July 2016 at 09:06

    I don’t know what makes me sadder, the fact that they think Trump sincerely wants to help them, or their belief that he could bring back steel jobs if he were sincere. Contrarian intellectuals tell us regular intellectuals that we need to “listen” to what the working class voters are saying. But when I listen all I hear are pathetic fairy tales.

    It brings to mind ‘Larry the Liquidator’s’ great Prayer for the Dead speech (in response to Gregory Peck’s last great career speech) in Other People’s Money.

  16. Gravatar of Tom Brown Tom Brown
    19. July 2016 at 09:27

    The vast majority of those 780,000 steel jobs were lost to automation, and they aren’t coming back.

    Maybe Trump can promise to get rid of automation. Maybe he can promise to bring back the buggy whip makers jobs too.

  17. Gravatar of Tom Brown Tom Brown
    19. July 2016 at 09:31

    -Every stinking politician is a con man. Trump is just the best of them.

    No, it’s bloody obvious he’s a con man. I would never buy anything Trump was selling. You have to be a 1st class chump (or incredibly desperate and uninformed) to be taken in by such a 2nd rate con man.

  18. Gravatar of bill bill
    19. July 2016 at 09:32

    An additional problem for places like Youngstown is this. As the companies upgraded technology, they didn’t do it within existing plants. They built new plants in new places where labor was cheaper and more flexible. So Youngstown may have lost close to 100% of its steel jobs, and if we did ban imports and got back 50,000 steel jobs, none of those would go to Youngstown either.

  19. Gravatar of Art Deco Art Deco
    19. July 2016 at 09:47

    Places like Youngstown Ohio and Flint Michigan have no future and everyone knows it.

    The principal employer in my home town went from 60,000 employees (nearly a quarter of the local workforce) to 4,000 employees over a space of 35 years. The city’s still there, and the dense settlement’s slightly more populous than it was in 1980. There’s ample housing stock, human capital appended to people who’ve spent their lives there, and extant amenities. Flint and Youngstown haven’t disappeared. There are 200,000 people in greater Flint and 240,000 around Youngstown. Where I grew up, the private sector successfully soaked up the released labor while a portion of the workforce went elsewhere each year. The trouble has been public officials, who’ve treaded water the whole time and accomplished very little beyond that. You need people with imagination and skill addressing your quality-of-life issues. Very often, politicians fall back on gimmicks (see the Fast Ferry in Rochester for an example. Convention and visitor’s bureaux are another gimmick).

  20. Gravatar of Tom Brown Tom Brown
    19. July 2016 at 09:51

    My dad (who turns 99 the week) grew up in Eastern Ohio. He worked in a steel mill, a coal mine and on a farm in the 1930s. That’s what inspired him to go to college and get a degree in engineering: so he wouldn’t have to do those terrible jobs anymore.

  21. Gravatar of Art Deco Art Deco
    19. July 2016 at 09:53

    An additional problem for places like Youngstown

    Youngstown’s not properly in the business of allocating capital beyond construction and maintenance of public works. What the local governments need to be doing is achieving better performance in the execution of their core tasks. Improved public safety, improved local schools, and beautification projects should be the order of the day. Step one should be for the State of Ohio to re-draw local government boundaries and place the dense settlement in one county-level authority and the exurban, small town, and rural settlement under other authorities. Step two should be a consolidated police force which goes to school with Wm. Bratton.

  22. Gravatar of Art Deco Art Deco
    19. July 2016 at 10:04

    tell us regular intellectuals that we need to “listen” to what the working class voters are saying. But when I listen all I hear are pathetic fairy tales.

    What’s interesting about you is that you never think outside the faculty rathskellar box. Folly is folly. The distinction between working-class follies and haut bourgeois folly is that working people are more concise. Loopy educational theories, psychoanalysis, racial-preference schemes, turning criminal procedure into a hopeless kabuki theatre, stupefying indulgence of sexual deviants, abuse of cultural minorities like evangelicals, and the abandonment of law enforcement in slum neighborhoods are all bourgeois initiatives. The complete ruin of democratic institutions (which are now toy telephones operating in the interstices between judicial decrees) is another bourgeois initiative. Turning the task of sorting the labor market over to a hopelessly bloated higher education nexus is another bourgeois initiative.

    In 1966, James Q. Wilson and another scholar embarked on a research project of exploring both public and elite opinion in Boston. They discovered the overlap between the city hall agenda and the street agenda was just about zero. That’s what treating the working class with disdain gets you. City hall was all about social work and welfare projects (which don’t work out for a variety of reasons) while neighborhoods were being engulfed in escalating disorder.

  23. Gravatar of Art Deco Art Deco
    19. July 2016 at 10:09

    That’s what inspired him to go to college and get a degree in engineering: so he wouldn’t have to do those terrible jobs anymore.

    Most people are wage-earners and there’s no reason to believe that will not always be the case, and they’re not going to have much use for aught but brief and vocationally-oriented programs in tertiary schooling. Public policy shouldn’t be in the business of sneering at people who are not college material. It should be in the business of improvement and maintenance of the public square.

  24. Gravatar of Art Deco Art Deco
    19. July 2016 at 10:11

    But lots of upper middle class white voters are also being conned by Trump, so it isn’t just the working class.

    No, they’re fair-minded. They’re not in the business of ranting about Trump and ignoring just who it is that’s running against him, nor are they in the business of concealing their priorities.

  25. Gravatar of Sean Sean
    19. July 2016 at 10:25

    What is the actual solution to the Youngstown problem?

    And the Youngstown problem might be coming to economists in the next 20 years. What industries employ the most economists – finance/academia/maybe a few more
    Finance is getting killed by automation. Hedge Funds haven’t performed for a while and the move to passive is increasing. One could say hedge funds ate their own lunch and attracted too many smart people. Academica has online courses.

    Personally we are probably destined for a guaranteed basic income in the next 50 years if productivity gains continue.

  26. Gravatar of Art Deco Art Deco
    19. July 2016 at 11:14

    What is the actual solution to the Youngstown problem?

    What’s your conception of what the problem is? The Youngstown municipality’s most salient problem is manifest: it has a homicide rate of 33 per 100,000 in a typical year, just like Newark, NJ. About 73% of the dense settlement in Trumbull and Mahoning counties is outside the Youngstown, municipality, of course. The area’s second largest municipality, Warren, has an elevated homicide rate as well (12 per 100,000). The greater Youngstown metropolis has a mean homicide rate about 2x the metropolitan mean for the country as a whole. That’s going to be replicated in rates of other sorts of crime, in school disorder, and in damage to the built environment.

    If greater Youngstown is like a mess of places, you might see the following:

    1. Public employees paid well in excess of local private sector norms, generally through the conduit of generous defined-benefit pension plans.

    2. Weak performance and discipline in the public sector, derived from failure to administer timely civil service examinations, gutting civil service examinations to please federal judges, long term employment of ‘temporary’ hires, allowing selection of anyone who ‘passes’ the examination rather than limiting hires to top performers, elaborate union rules, and effective life tenure for civil servants barring reductions in force.

    3. Understaffed law enforcement. Misplacement of law enforcement agencies in municipal government rather than county government. Demoralized and otiose law enforcement. Law enforcement harassed by liberal judges, craven politicians, and black nationalists.

    4. Bad schools. Tolerance of disorder in schools to cater to the social justice shticks of school administrators, &c, to please federal agencies, and to please judges.

    5. Decay of the built environment consequent to over-reliance on property taxes. (The state needs to help fix this).

    6. Eyesores and safety hazards from abandoned physical plant.

  27. Gravatar of Art Deco Art Deco
    19. July 2016 at 11:18

    Personally we are probably destined for a guaranteed basic income in the next 50 years if productivity gains continue.

    There has been no secular trend in weekly working hours since about 1920 and the share of people over the age of 16 with a workaday job has varied between 56% and 64% for the entire post-war period.

  28. Gravatar of Tom Brown Tom Brown
    19. July 2016 at 12:28

    Most people are wage-earners and there’s no reason to believe that will not always be the case.

    I don’t disagree, but automation is not going to stop eliminating old economy jobs. Also, engineers are often wage earners, as my dad was his whole life (same goes for myself and my brother, also both engineers). The new economy doesn’t need people to compete with machines, it needs people to constantly educate themselves on how to design and use them. I spend half my time learning new technology. We are in an era when we must constantly educate ourselves in practical technical know how to remain competitive.

  29. Gravatar of ssumner ssumner
    19. July 2016 at 13:16

    Benny, You said:

    “No dummy. Trump proved that deep down that is the conservative view.”

    OK, I admit to having missed all that. When did Trump argue the problem of poverty was genetics, and not culture, or bad economic policies that gave away America’s manufacturing sector? I’ll post on it if you can show me a link.

    Harding, You said:

    “Every stinking politician is a con man.”

    I know you think this makes you sound sophisticated, but it actually shows you are an idiot. Sanders is not a con man who actually plans massive tax cuts for the rich. He just isn’t. Hillary won’t repeal Obamacare. With Trump, anything is possible, big tax cuts or big tax increases for the rich, I wouldn’t even hazard a guess. Will he repeal Obamacare? No one knows. He’s a phony, so you’ll have to wait until he takes office to find out his true agenda.

    I plan to vote for Johnson, because he is not a con man, and I have at least some idea as to his actual policy views.

    Jim, Yes, great speech.

    Bill, Yes, I agree.

    And so Art continues to be under the delusion that I share the views of my socialist colleagues in academia. Former colleagues, as I retired from Bentley.

    Bill, However I actually do agree with Art’s final comment—people have been predicting machines would steal our jobs for 100 years, and they’ve been consistently wrong.

  30. Gravatar of Art Deco Art Deco
    19. July 2016 at 13:17

    You fill out a time card?

  31. Gravatar of Tom Brown Tom Brown
    19. July 2016 at 14:03

    Time card: yes, I’m paid by the hour, as are all the employees here including our president. It’s truly by the hour here but I’ve always filled out a time card, even when I was an “exempt” employee at other companies.

  32. Gravatar of Art Deco Art Deco
    19. July 2016 at 15:02

    And so Art continues to be under the delusion that I share the views of my socialist colleagues in academia. Former colleagues, as I retired from Bentley.

    And you continue under a delusion that the professoriate has socialist views or that I was referring to them. There’s an old red where I used to work. Very intellectually serious man and likely less problematic than the mainstream faculty; he retires in two years. One of the rare Republicans on that faculty number people like him there in the single digits out of 200 professors and lecturers.

    Now find someone on that faculty who defended that faculty Republican in a public forum when samples of his private correspondence were published and when the inner ringers on the faculty attacked his integrity and staged a two-minutes hate regarding him. The number = zero. Find someone on that faculty who will critique, in a public forum, the diversity shtick at that school. The number = 1. Find someone, on a faculty where most have guaranteed employment until they retire, who will tell you in blunt terms that the core curriculum there is pr-brochure-horse-pucky whose real purpose is to employ the dangling PhD in faculty marriages. The answer is … none really, though the fellow referenced above gets about half-way there.

    Or ask Tyler Cowen why he fancies our most quotable commentator today is a no account like Corey Robin. Or ask yourself why the both of you are in a lather that the British hoi palloi simply do not value what you value. Ask yourself why the GMU faculty member I know best would be incensed that anyone would object to court-ordered imposition of homosexual pseudogamy in the Commonwealth of Virginia. He’s not a ‘socialist’. He’s an admirer of Jimmy Carter and a Southerner much like him. He is also, however, a faculty member. And has been for more than 30 years.

  33. Gravatar of E. Harding E. Harding
    19. July 2016 at 17:15

    “I plan to vote for Johnson, because he is not a con man,”

    http://www.centerforsecuritypolicy.org/2005/12/21/50-patriot-act-supporters-warn-against-acts-lapse-2/

    https://www.youtube.com/watch?v=COItiKtHWyg

    https://youtu.be/lBNvyX9xEtI

    https://twitter.com/JustinRaimondo/status/750427691967344640

    He’s a con man. And I didn’t even bother doing more than scratching the surface.

    “Sanders is not a con man who actually plans massive tax cuts for the rich.”

    -He is, though, a con man who cannot ever get any of his “political revolution” through congress. He simply lies as to whether a single aspect of his program is achievable, or would have the effects he says they would have.

    “Hillary won’t repeal Obamacare.”

    -How do you know? She’s corrupt.

  34. Gravatar of E. Harding E. Harding
    19. July 2016 at 17:20

    “I plan to vote for Johnson, because he is not a con man,”

    centerforsecuritypolicy.org/2005/12/21/50-patriot-act-supporters-warn-against-acts-lapse-2/

    youtube.com/watch?v=COItiKtHWyg

    youtu.be/lBNvyX9xEtI

    twitter.com/JustinRaimondo/status/750427691967344640

    He’s a con man. And I didn’t even bother doing more than scratching the surface.

    “Sanders is not a con man who actually plans massive tax cuts for the rich.”

    -He is, though, a con man who cannot ever get any of his “political revolution” through congress. He simply lies as to whether a single aspect of his program is achievable, or would have the effects he says they would have.

    “Hillary won’t repeal Obamacare.”

    -How do you know? She’s corrupt.

  35. Gravatar of E. Harding E. Harding
    19. July 2016 at 17:21

    “I plan to vote for Johnson, because he is not a con man,”

    centerforsecuritypolicy.org/2005/12/21/50-patriot-act-supporters-warn-against-acts-lapse-2/

    youtube.com/watch?v=COItiKtHWyg

    youtu.be/lBNvyX9xEtI

    twitter.com/JustinRaimondo/status/750427691967344640

    He’s a total and complete con man. And I didn’t even bother doing more than scratching the surface.

    “Sanders is not a con man who actually plans massive tax cuts for the rich.”

    -He is, though, a con man who cannot ever get any of his “political revolution” through congress. He simply lies as to whether a single aspect of his program is achievable, or would have the effects he says they would have.

    “Hillary won’t repeal Obamacare.”

    -How do you know? She’s corrupt.

  36. Gravatar of Mark Mark
    19. July 2016 at 18:43

    Scott, I think “pathetic fairy tails ” is a bit harsh .

  37. Gravatar of Benjamin Cole Benjamin Cole
    19. July 2016 at 19:06

    On Gary Johnson–

    Dunno about this guy. Doesn’t seem to have the courage of his convictions

    Ronald Reagan in the 1980 campaign said straight out he wanted an open border with Mexico, due to the “labor situation” in the United States. So you knew where Reagan stood. (BTW, the average annual unemployment rate in the United States in 1980 was 7.1%, then 7.6% in 1981, and then 9.7% in 1982).

    Johnson today says he wants a worker visa program with Mexico. In other words, a laboring class in the U.S., but without the vote and no citizenship.

    Johnson’s position is neither libertarian nor democratic, but rather polluted and weak. The word “squirrel” comes to mind.

    Who wants to vote?

  38. Gravatar of engineer engineer
    19. July 2016 at 19:18

    We are on the brink of a manufacturing revolution that will totally up end world trade. Nearly every product that you can buy on Amazon will be built on-demand, locally, be customizable, and have more durable designs. Google HP Jet Fusion printer as an example of the first stage of the revolution. THe world economies most dependent on consumer manufacturing will be most impacted. Trade policies will be largely irrelevant.

  39. Gravatar of Lorenzo from Oz Lorenzo from Oz
    19. July 2016 at 22:48

    There is a difference between paying attention to concerns and agreeing with what folk say. The clever politician divines the way to usefully address the former without necessarily agreeing to the latter.

    I know I can be a bit obsessive on the example, but it is very pertinent to current difficulties in Western politics.

    John Howard, election campaign speech, October 28th, 2001.
    It is also about having an uncompromising view about the fundamental right of this country to protect its borders. It’s about this nation saying to the world we are a generous open hearted people taking more refugees on a per capita basis than any nation except Canada, we have a proud record of welcoming people from 140 different nations.
    But we will decide who comes to this country and the circumstances in which they come. And can I say on this point what a fantastic job Philip Ruddock [Minister for Immigration] has done for Australia.

    http://electionspeeches.moadoph.gov.au/speeches/2001-john-howard

    In other words, yes, continue to be refugee-accepting settler country, but on our terms. The sense of having no say can be very debilitating and a great basis for resentment to be harvested by political entrepreneurs (and not in a good way).

  40. Gravatar of Tim Worstall Tim Worstall
    20. July 2016 at 01:07

    Steel is an interesting one because we’ve had a large technological change here.

    The old plants were blast furnaces. Take in iron ore, coking coal and limestone and produce iron and steel. A (formerly) labour intensive process.

    Something like (not actual figure but about) 50 -60% of today’s steel is recycled steel in arc furnaces. A less labour intensive process all round.

    The general technological development over the decades is that mini-mill output from the likes of Nucor, mini-mill meaning scrap recycling, has become ever higher grade. Way back when recycled was OK for rebar (to stick into setting concrete) and not much else. Now we can make the much higher grade auto steel from scrap.

    In turn that has meant that we’ve, in general and not exactly, moved from a flow economy, where we make new steel from virgin materials and use it, to a stock economy where we recycle the extant steel in the economy.

    We can’t do this perfectly and never will (contaminants, “tramp” elements will always build up and thus degrade the steel we can make from scrap. Anything nuclear for example is always made from virgin metals on reliability grounds) but we’ve just needed less and less of that blast furnace, labour intensive, production over time.

    The US even exports scrap steel these days.

    There would actually be an interesting little paper there. Has employment in steel actually declined at all?

    Sure, obviously, employment in the “making” of steel has declined. But if we add back in all those in the recycling of steel to feed the mini-mills, how much is that still true?

  41. Gravatar of Major.Freedom Major.Freedom
    20. July 2016 at 04:07

    It was persistent, decade after decade government budget deficits that destroyed the industrial infrastructure of the country.

    Deficits redirect crucial savings away from maintaining, replacing and growing capital, towards wasteful consumption of government and those it gives money to.

    Add to this the accelerated growth in regulations (#of pages of the federal register is a good proxy).

    Add to this the rise of capitalism abroad which increased the competition.

  42. Gravatar of Scott Sumner Scott Sumner
    20. July 2016 at 04:30

    Art, You have some interesting obsessions with the professoriate, but you really don’t know much about me at all. I’m just as opposed to campus PC nuts as you are. Personally, I never held back from expressing unpopular views on campus, and never suffered as a result. But I know conservatives that did suffer.

    Harding, If Jim Jones said the sky was green, his followers would nod their heads in agreement. If Trump says Hillary’s not entitled to mistakes but Pence is, the Trumpistas will nod their heads in agreement. If Trump says he opposed the Iraq War (he didn’t), they’ll nod their head in agreement. At this point it’s just a cult.

    Lorenzo, I certainly agree that politicians need to do a better job of coming up with economic policies that make people better off. But the truth is that there is simply no solution for some problems. I referred to the mass migration from the farms to the cities. It’s sad that so many farmers lost their jobs, but it’s good that the US government did relatively little to stop the process, and it would have been even better if they had done nothing at all to stop the process. The “solution” for a 25 year old blue collar worker in Youngstown is to tie a U-haul trailer behind his car and move to Dallas. I wish I had a better solution, but I don’t. The solution for low wages is low wage subsidies from the government and weaker intellectual property rights. But even I realize that’s just a bandaid.

    Tim, I was vaguely aware of that process, but thanks for fleshing it out in more detail. I’d guess that’s also describing China in 30 years.

  43. Gravatar of ssumner ssumner
    20. July 2016 at 04:34

    Mark, I’m referring to voters who claim that Trump will bring back our steel jobs by stopping imports. He isn’t going to stop imports, and it wouldn’t bring back the jobs if he did. Sorry, but their beliefs are pathetic. (in the sense of being sad, not in the sense of stupid)

  44. Gravatar of Brian Donohue Brian Donohue
    20. July 2016 at 05:14

    @Tim, great comment. Thanks.

  45. Gravatar of james elizondo james elizondo
    20. July 2016 at 07:00

    So who won?

    http://zacharydavid.com/2016/07/ngdp-futures-targeting-is-a-pretty-goofy-idea/

  46. Gravatar of dw dw
    20. July 2016 at 09:30

    while I know that the steel jobs (and manufacturing) arent coming back like they were, and almost all of that is because of automation (even jobs that stayed arent as numerous, ex GM, back in the 60s made fewer cars than they do today, with a lot more people . and the jobs arent any thing like they were). the problem is how do you solve that? not every one is going to be an economist. or a teacher. so what do the majority of Americans do? and if they could, the pay for those jobs would collapse. and while some were lost to other countries, its not like we did any thing about it (i know we have programs to do so, they just dont get applied to those that were or are impacted).
    its like the theme just get a college education. problem is, a lot of jobs that require that, are as much as risk as those that went away. that is what Trump is plugging into. the felling of hopelessness and that the government that is supposed to work for them, isnt

  47. Gravatar of Art Deco Art Deco
    20. July 2016 at 10:25

    Art, You have some interesting obsessions with the professoriate, but you really don’t know much about me at all. I’m just as opposed to campus PC nuts as you are. Personally, I never held back from expressing unpopular views on campus, and never suffered as a result. But I know conservatives that did suffer.

    “Obsession”? How is that defined in the space between your ears (as opposed to, say, a dictionary)?

    And, no, your formulations regarding campus PC are humbug, as noted previously. You might have reproved the editors of the Dartmouth Review, ca. 1985, with the character string ‘reasonable courtesy’. You’d be hard put to find any recent controversy which featured student reporters attempting to cadge a recorded after-class interview with a music professor known to be emotionally unstable. You might have reproved them; please note, though, Charles Sykes reporting on the situation at Dartmouth: the enforcement of standards was sectarian and contrived, which could be seen from cataloguing incidents in which campus feminists et al had treated James Freedman at least as badly as Prof. Cole. That sort of thing is a liberal staple (which I run into in these sorts of fora routinely).

    Keep in mind that college administrations have no trouble punishing and ignoring constituencies they despise, including alumni with a long history as donors. A cretinette like Jeralyn Luther is not an antagonist of the administration, but a collaborator. Incorporated withing the administration’s activities will be: systemic lying in public relations, try-every-door noncompliance with state law, systemic lying to black students (and some others) about their academic performance, the manufacture of patron-client relations between the apparatchiki and black students, the degradation of curriculum in the generation of patronage for political interests (see ‘women’s studies’), the abuse of students in star chamber proceedings ( again try-every-door noncompliance with court rulings), &c.

    Sections of the faculty, meanwhile, have ruined a string of disciplines and subdisciplines, turning them into crooked apologetical enterprises. If the trustees many places were serious, the entire English department, the comparative literature department, the sociology department, the anthropology department, and the American history faculty would be shown the door. Other disciplines are more like parody subjects (teacher training at many schools, social work, and studio art to name three).

    And, of course, there’s the whole padding project of ‘gen ed’ requirements. The last figure of consequence to raise this subject was Allan Bloom, nearly 30 years ago. Then you have the courses in the circular which never seem to actually be offered or students extending their program because scheduling conflicts prevent their fulfilling requirements on time.

    That you find Melissa Click an embarrassment is of no account. You’ve reached the point in academe where there’s more gangrene than healthy flesh. And don’t look to Tyler Cowen to say a word about that or Melissa Click.

  48. Gravatar of MarketWatch First Take: Why Trump and Clinton vows to bring back manufacturing jobs are a pipe dream – wordpress-16884-37649-130173.cloudwaysapps.com MarketWatch First Take: Why Trump and Clinton vows to bring back manufacturing jobs are a pipe dream – wordpress-16884-37649-130173.cloudwaysapps.com
    20. July 2016 at 12:19

    […] 800,000 steel workers in 1967 to produce 115 tons of steel, noted professor Scott Summer of the Money Illusion blog. By 2015 only 90,000 people worked in the industry and they produced about 79 million tons of […]

  49. Gravatar of Massimo Heitor Massimo Heitor
    20. July 2016 at 12:26

    @sumner,

    “I know you think this makes you sound sophisticated, but it actually shows you are an idiot. Sanders is not a con man who actually plans massive tax cuts for the rich. He just isn’t. Hillary won’t repeal Obamacare.”

    Trump is less reliable on policy commitments than Sanders or Cruz or even Clinton. Yet, deception and dishonesty is rampant in politics. You mention Obamacare. That was advocated with rampant levels of deception and dishonesty. I bought and read Gruber’s graphic novel “Health Care Reform” explaining the ideas, and in hindsight the whole thing was wildly dishonest and manipulative. Gruber famously admitted some of that. It’s not unreasonable to accuse Obamacare of being a con and the politicians who advocated it.

    I do generally agree with Sumner on free trade and that past industries will not return from the dead. It is interesting that Paul Ryan, who I thought was in the free trade camp, said he’s not that different from Trump on trade.

    Cities like Youngstown may some revitalization ahead that involve new industries. And Trump may or may not have something to give them.

  50. Gravatar of E. Harding E. Harding
    20. July 2016 at 12:27

    You said Gary Johnson wasn’t a con man. I showed you he was a conman. And now you ignore your original statement. Typical Sumner.

    “If Trump says he opposed the Iraq War (he didn’t)”

    -Trump quickly changed his mind on the war in the first few days of fighting and was a consistent opponent of it since late 2003. These are well-documented facts.

    “At this point it’s just a cult.”

    -Most Blacks are much bigger cultists. Just look at their overwhelming Hillary vote. Yet, you never focus on that. I wonder why.

  51. Gravatar of MarketWatch First Take: Why Trump and Clinton vows to bring back manufacturing jobs are a pipe dream | Market MasterClass MarketWatch First Take: Why Trump and Clinton vows to bring back manufacturing jobs are a pipe dream | Market MasterClass
    20. July 2016 at 12:28

    […] 800,000 steel workers in 1967 to produce 115 tons of steel, noted professor Scott Summer of the Money Illusion blog. By 2015 only 90,000 people worked in the industry and they produced about 79 million tons of […]

  52. Gravatar of Art Deco Art Deco
    20. July 2016 at 13:23

    The ‘cult’ complaint is just strange, even as an attempt at instructive hyperbole.

    -Most Blacks are much bigger cultists.

    What it is is voting according to communal affiliations, which is what was done in Ulster for decades. What’s curious about it is that it wasn’t done among American blacks prior to about 1962 and the black electorate has been completely insensitive to events since that time.

  53. Gravatar of Art Deco Art Deco
    20. July 2016 at 13:30

    Cities like Youngstown may some revitalization ahead that involve new industries. And Trump may or may not have something to give them.

    The 3d and 4th tier metropolitan centers which got whalloped by the regional and sectoral shifts after 1979 are still suffering, for the most part. Of the two 2d tier centers who got smacked (Cleveland and Buffalo), Buffalo is just now settling demographically. I think Detroit was the only 1st tier city that was notably injured; the parlous state of the core municipality in Detroit is a function of intrametropolitan migration, for the most part.

  54. Gravatar of MarketWatch First Take: Why Trump and Clinton vows to bring back manufacturing jobs are a pipe dream | Stock Transcript MarketWatch First Take: Why Trump and Clinton vows to bring back manufacturing jobs are a pipe dream | Stock Transcript
    20. July 2016 at 13:35

    […] 800,000 steel workers in 1967 to produce 115 tons of steel, noted professor Scott Summer of the Money Illusion blog. By 2015 only 90,000 people worked in the industry and they produced about 79 million tons of […]

  55. Gravatar of Tom Brown Tom Brown
    20. July 2016 at 13:36

    Scott, looks like you stirred up the hornet’s nest again with this one. =)

    The message of this piece from 538 is petty well summed up in the title, and it’s probably bloody obviously true to most people, yet I found it an interesting read nonetheless. It fits nicely with your statements about cults (and the ensuing swarm of angry hornets):

    http://fivethirtyeight.com/features/theres-probably-nothing-that-will-change-clinton-or-trump-supporters-minds/

  56. Gravatar of Tom Brown Tom Brown
    20. July 2016 at 14:07

    … also I was really hoping Trump would pick Christie for VP for one reason: Harding claimed more than once he’d become #NeverTrump if that happened. So naturally I wanted to see the outcome of this “natural experiment:”

    1. Would Harding really follow through?

    2. If he did follow through, then how would the other Trump fans treat him afterwards?

    Oh well, maybe another time.

  57. Gravatar of Tom Brown Tom Brown
    20. July 2016 at 14:44

    Scott, also along the lines of your cult comment, you might enjoy this by Leon H. Wolf at RedState.com today:
    http://www.redstate.com/leon_h_wolf/2016/07/20/watch-paul-manafort-vehemently-deny-morning-melanias-speech-cribbed-michelle-obama/
    But as the 538 piece points out, I don’t think his laundry list of facts is going to convince any of his fellow Republican friends. If you follow my link in my previous comment above, just think of the mountain of evidence required to change Charlie Veitch’s mind about 9/11: and he was the only one from a group of people given the same tour to actually change his mind. As 538 points out, evidence is a poor tool to use with people using “motivated reasoning.” That’s why I’m wondering if this guy might be onto a more efficient method. David McRaney covers some of the same territory here.

  58. Gravatar of Tom Brown Tom Brown
    20. July 2016 at 14:52

    Here’s an excerpt from that 538 piece (emphasis added):

    To understand why someone might acknowledge that Trump has made outrageous comments and yet still support him, consider what an internet commenter calling himself Bryan wrote. He’s supporting Trump “because a vote for Trump is as close to a punch in the face to the ENTIRE establishment as you can get.” And then there’s this: “Is he a racist misogynistic asshole? Yes. Is he a big-time buffoon who makes a joke of himself? Yes. Is he a narcissistic snob who makes careless controversial statements? Yes,” wrote a Trump supporter at Quora. “But, he will have the independence to implement any legislation without having any external pressure. And that is good for the country.”

    I would have loved to ask this man “Bryan” why he thinks not having any “external pressure” is a good thing (even if it were true).

  59. Gravatar of Massimo Heitor Massimo Heitor
    20. July 2016 at 15:55

    @Tom Brown,

    “But, he will have the independence to implement any legislation without having any external pressure. And that is good for the country.”

    I’m a Trump fan and I think that’s terrible and won’t happen. The US still has checks & balances. I actually hope Trump being president might encourage the left to strengthen those checks & balances.

    You can find lone commenters that have all kinds of ridiculous reasons for voting the way that they do.

  60. Gravatar of ssumner ssumner
    21. July 2016 at 09:01

    Harding, No, you didn’t show me Johnson is a con man, don’t be ridiculous. I don’t waste time responding to idiotic comments.

    You said:

    “Trump quickly changed his mind on the war in the first few days of fighting ”

    That’s just hilarious. Start a war and then after it’s too late he realizes it was a mistake. He’ll make a wonderful commander in chief. “Boys, we are sending you in, but if it doesn’t go well in the first week we’ll cut and run”.

    He supported the war when the decision was being made to go to war. And now he’s lying and claiming he did not support the war.

    As far as blacks, they had the good sense to support Obama over Hillary. They had the good sense to support Obama over McCain (who never saw a war he didn’t want to enter). They had the good sense to support Hillary over Sanders. And they will have the good sense to support Hillary over Trump. Sure, there are flaws with any ethnic group, they sometimes elect corrupt mayors. But in recent years it’s been white males (like you?) who have been acting like idiots.

    Tom, Christie’s views are closer to Trump’s (compared to Pence)

    As far as “Bryan” if I said that was the reasoning used by Hitler supporters, would some idiot say I’m comparing Hitler to Trump? :)

    BTW, I most certainly am comparing Hitler supporters to Trump supporters. The 35% of Germans who voted for Hitler most certainly are the sort of people who would have voted for Trump, had they lived in America in 2016, instead of Germany in 1932.

    (And I suppose those who voted for the communists would have voted for Sanders.)

  61. Gravatar of Art Deco Art Deco
    21. July 2016 at 10:51

    The 35% of Germans who voted for Hitler most certainly are the sort of people who would have voted for Trump, had they lived in America in 2016, instead of Germany in 1932.

    You’re referring to just what? Social stratum? Subcultural affiliations? Occupational segments?

  62. Gravatar of Scott Freelander Scott Freelander
    21. July 2016 at 12:26

    Scott,

    You’re quite right about Trumpistas being cultists. I’d had the same thoughts myself lately. That’s why I don’t even address them anymore. Exchanges with them are about as productive as exchanges with the internet Austrians or the internet MMT types.

    Unfortunately, there are some crazies uncles and cousins in my family who never paid attention to politics in the past now trying to push Trump on me. I had to block communication with them and disinvite them to future family events at my house, because they’re rude, crude, insane, and don’t listen.

  63. Gravatar of Benjamin Cole Benjamin Cole
    21. July 2016 at 18:52

    Scott Freelander–

    “I had to block communication with them and disinvite them to future family events at my house, because they’re rude, crude, insane, and don’t listen.”

    I dod not realize we are related.

  64. Gravatar of Benjamin Cole Benjamin Cole
    21. July 2016 at 18:59

    BTW, if the steel production and employment figures are roughly right, then a steel worker in 1967 produced 144 tons a steel, but today produces 878 tons.

    Call it five times as much production per worker.

    Not so bad.

  65. Gravatar of Art Deco Art Deco
    22. July 2016 at 06:54

    I had to block communication with them and disinvite them to future family events at my house, because they’re rude, crude, insane, and don’t listen.

    Somehow I suspect their take on you would be amusing to the assembled here.

    My family is shot through with Paulbots and Berniebros. Somehow, we’ve stayed on speaking terms. It didn’t take much effort.

  66. Gravatar of Scott Freelander Scott Freelander
    22. July 2016 at 06:55

    Scott,

    I wonder if it’s worth your time to do a post on Japanese immigration policy as a cautionary tale in the context of stupid Trump anti-immigration stances.

  67. Gravatar of ssumner ssumner
    22. July 2016 at 07:31

    Art, There are three main groups of Trump supporters:

    1. Bullies.
    2. Morons (at least about public policy)
    3. Bigots.

    Add a 4th group who don’t like Trump but will vote for him because they think Hillary’s worse.

    These people occur in all strata of society. I doubt that Trump voters will skew strongly upper or lower class in the general election–it will be fairly balanced. Obviously it will skew white, but not exclusively. He’ll probably do better with people whose jobs deal with things, and not so well with those whose jobs deal with ideas.

    BTW, I’m not saying the information workers have better political views in any overall general sense, just on the specific issue of Trump. Trump will do especially well among professions that involve treating people poorly (prison guards, used car dealers, car repair shop owners on the East Coast)

  68. Gravatar of msgkings msgkings
    22. July 2016 at 07:53

    @ssumner:

    Is a 5th group of Trump voters those who would vote Team Red if they nominated a hunk of Velveeta cheese? Or are those part of the 2nd or 4th groups?

    That 5th group is the group Art is in.

  69. Gravatar of Art Deco Art Deco
    22. July 2016 at 08:35

    Art, There are three main groups of Trump supporters:

    No, there are three sets of insults you have for Trump supporters.

  70. Gravatar of Art Deco Art Deco
    22. July 2016 at 09:00

    Velveeta cheese isn’t running.

    Over the last 27 years, the Democratic Party has (3x) run candidates out the sociopathic white-collar criminal element and 4x run candidates devoid of executive experience. Of the latter, one has to be the most vapid creature ever nominated by a major political party, a petulant empty suit who personifies what’s wrong with the bourgeois types who are the backbone of the Democratic Party. Another is a legacy pol who has provided us with an odd example of characterological decay manifest (as we speak) over 30 of his 50 years of adult life. Another was on active duty in the Navy for 3 years, which incorporated 6 months posted to the Mekong Delta. He then spent much of the succeeding 35 years dining off it. You strip away his airs and the unadorned man is a mediocre Boston lawyer with an odd habit of cadging women with 8-figure sums of money behind them (and a corps of reporters who act as his press agency).

    These cretins were running against men who had built businesses, or had had a long run in the military, or were accomplished practitioners of parliamentary maneuver.

  71. Gravatar of dw dw
    22. July 2016 at 09:09

    to me the only real businessman that ever an for President, was Ross Perot. havent seen once since. really didnt see one before either. mainly cause running a business, is in no way related to running a country.

  72. Gravatar of msgkings msgkings
    22. July 2016 at 09:11

    Art, you are an intelligent person and have a clever posting style. But you are also literally as partisan as you can possibly be. I wish Trump were running as a Dem so I could read the same kind of paragraph from you taking him down, in the same style. Note you didn’t exactly deny you’d vote for the hunk of Velveeta if the Reps nominated it.

    Donald Trump is awful. This has nothing to do with Dems or Reps or Hillary or Obama. He is terrible, and in no way should he be president. I suspect you know this, but you are so Team Red you can’t just admit it.

    Can’t you be against Hillary without being for that authoritarian narcissistic coarse idiotic bully? Heck, I bet you could pull of a Turing test style paragraph on Trump, I would genuinely be eager to see it.

  73. Gravatar of Art Deco Art Deco
    22. July 2016 at 09:57

    to me the only real businessman that ever an for President, was Ross Perot. havent seen once since. really didnt see one before either. mainly cause running a business, is in no way related to running a country.

    Leaving aside Donald Trump, Mitt Romney, George Bush the Younger, “Steve” Forbes, George Bush the Elder, Barry Goldwater, and Stuart Symington spent more than 15 years of their adult life working for business concerns. Bob Kerrey, Nelson Rockefeller, William Scranton, and Margaret Chase Smith put in less time at it, but they did know that world. You fancy they’re artificial businessmen?

  74. Gravatar of Bill Ellis Bill Ellis
    22. July 2016 at 22:22

    Benny Lava says….”Remember when I told you that the conservative view on race and poverty wasn’t culture but genetics?”

    You and the conservatives you speak for are absolutely clueless about the science of how human development is impacted by genetics…

    our genes determine a range that our attributes may develop within. The level of Deprivation and stress people experience while growing up is strongly correlated with development. The less secure the environment, the greater the detriment to a persons mental and physical health…The more they will be prone to violence and lack impulse control… insecurity and deprivation also as lower IQs ( up to about 10 points lower )
    Studies of twins separated at birth clearly show how a person with the same genetics will end up worse off when raised in an insecure environment. For example both twins might be genetically predisposed to be vulnerable to become manic depressive… But the twin raised in a secure environment does not become a manic depressive while the twin raised under stress and deprivation does…
    Furthermore …its not just if an environment is secure or insecure.. That’s only half the picture.. If a twin child experiences a secure and ENRICHED environment as they develop, they will became way healthier mentally and physically than their twin raised in deprivation…
    Not only does the twin raised in a secure AND enriched environment trun out healthier…they turn out even smarter… They get the 10 point IQ advantage of a secure environment…PLUS up to about 15 more points … A twin raised in an Ideal secure and enriched environment will have a 25 point IQ advantage over his brother raised in deprivation…

    There but for the grace of god…

    We have an ‘UN” natural, hideous, large scale experiment to look at that shows the truth of thees Ideas…. GAZA.

    for more than a generation now the people of GAZA have been subjected to constant deprivation and insecurity… Most of the children of Gaza have known nothing else… These kids..and young adults suffer from all the things that developmental psychology suggests they would… Shortened life spans poor, mental health and lowered IQs…

    Conservatives hate this truth… Because it points out a basic flaw in their priors…

    Conservatives believe that an underachieving person can be punished by insecurity and deprivation into being at least a good enough achieving person… But If the truth that deprivation actually hurts a person’s ability to achieve is faced…. WHat’s left them ?

    The truth is its not genetics that explain the difference in the races…its the environments their genetics interacted with as they developed that explain the difference.

    Conservatives who think Genetics are to blame for the under performance of African Americans are confusing cause and correlation..
    And to the extent that you/Conservatives think the best way to address under performance is to Increase deprivation… is the extent that you are actualy the cause of the problem…

  75. Gravatar of Lorenzo from Oz Lorenzo from Oz
    22. July 2016 at 23:41

    Bill Ellis: the main reason for the insecurity in Gaza is that they are ruled by Hamas which invests in conflict and hate rather than anything resembling nation building. Also, I would have thought there was a strain in conservatism which could respond to the points you make by saying “see, we told you social order was really important”.

    Scott: Fair enough.

  76. Gravatar of ssumner ssumner
    23. July 2016 at 05:17

    msgkings, I’d lump 5 in with 4.

  77. Gravatar of Bill Ellis Bill Ellis
    23. July 2016 at 08:11

    Lo of oz says…. “the main reason for the insecurity in Gaza is that they are ruled by Hamas which invests in conflict and hate rather than anything resembling nation building”

    This is not true…but as it stands it is still…cart before the horse logic…

    At least consider that any negative feed back loop requires input from at least 2 sources… but a change in input from either source can disrupt the loop…. or as my mom used to say all the time as my brother and I were beating the crap out of each other… “it takes two to tango”…

    Lorenzo… Do you disagree with the basics of what I said about development and environment ?
    If you do basically agree…It does not change my point at all…All you are saying is that it is the Palestinians own fault… that they deserve the treatment by Israeli…even though that treatment makes the problem harder to solve…

    I would say that concentrating on who has the moral right to be barbaric to whom will only continue the loop.. Past a certain point…when a population or a person is desperate or deprived…Punishment will only make things worse…

    And Lo says… I would have thought there was a strain in conservatism which could respond to the points you make by saying “see, we told you social order was really important”.

    I think that would be a great place for the debate to start…
    Of course social order is really important… But its the form and intensity of the social order makes all the difference..

    I’m no anarchist…

  78. Gravatar of Heisenberg Heisenberg
    10. September 2016 at 02:04

    The logic of this article is flawed. The writer argues that there is no way that the US steel industry can ever get the same number of jobs back due to advancements in the automation which is used in steel manufacturing. This assumes that the demand for steel in the world has not gone up in 30 plus year (it has). Also, the writer erroneously assumes that automation is free to build, and requires no cost to maintain. So if it’s all done by automation, what advantage do the labor rich Chinese have in today’s steel market. By this writers logic, China should not be first, but it is.

    In short, you’re wrong.

  79. Gravatar of UberDave UberDave
    16. November 2016 at 08:35

    In 1984 Springsteen sang
    They’re closing down the textile mill across the railroad tracks
    Foreman says these jobs are going boys and they ain’t coming back to your hometown
    The difference between what a journalist would see and what an economist would see is best captured here (replace agriculture or manufacturing for hot-dogs; services for buns): http://www.pkarchive.org/theory/hotdog.html

    “When a famous journalist arrives on the scene. He takes a look at recent history and declares that something terrible has happened: Twenty million hot-dog jobs have been destroyed. When he looks deeper into the matter, he discovers that the output of hot dogs has actually risen 33 percent, yet employment has declined 33 percent. He begins a two-year research project, touring the globe as he talks with executives, government officials, and labor leaders. The picture becomes increasingly clear to him: Supply is growing at a breakneck pace, and there just isn’t enough consumer demand to go around. True, jobs are still being created in the bun sector; but soon enough the technological revolution will destroy those jobs too. Global capitalism, in short, is hurtling toward crisis. He writes up his alarming conclusions in a 473-page book; full of startling facts about the changes underway in technology and the global market; larded with phrases in Japanese, German, Chinese, and even Malay; and punctuated with occasional barbed remarks about the blinkered vision of conventional economists. The book is widely acclaimed for its erudition and sophistication, and its author becomes a lion of the talk-show circuit.

    Meanwhile, economists are a bit bemused, because they can’t quite understand his point. Yes, technological change has led to a shift in the industrial structure of employment. But there has been no net job loss; and there is no reason to expect such a loss in the future. After all, suppose that productivity were to double in buns as well as hot dogs. Why couldn’t the economy simply take advantage of that higher productivity to raise consumption to 60 million hot dogs with buns, employing 60 million workers in each sector?

    Or, to put it a different way: Productivity growth in one sector can very easily reduce employment in that sector. But to suppose that productivity growth reduces employment in the economy as a whole is a very different matter. In our hypothetical economy it is–or should be–obvious that reducing the number of workers it takes to make a hot dog reduces the number of jobs in the hot-dog sector but creates an equal number in the bun sector, and vice versa. Of course, you would never learn that from talking to hot-dog producers, no matter how many countries you visit; you might not even learn it from talking to bun manufacturers. It is an insight that you can gain only by playing with hypothetical economies–by engaging in thought experiments.”

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