The Robot Reality: Service Jobs Are Next to Go

If you meet Baxter, the latest humanoid robot from Rethink Robotics – you should get comfortable with him, because you'll likely be seeing more of him soon.

Rethink Robotics released Baxter last fall and received an overwhelming response from the manufacturing industry, selling out of their production capacity through April. He's cheap to buy ($22,000), easy to train, and can safely work side-by-side with humans. He's just what factories need to make their assembly lines more efficient – and yes, to replace costly human workers.

But manufacturing is only the beginning.

This April, Rethink will launch a software platform that will allow Baxter to do a more complex sequencing of tasks – for example, picking up a part, holding it in front of an inspection station and receiving a signal to place it in a "good" or "not good" pile. The company is also releasing a software development kit soon that will allow third parties – like university robotics researchers – to create applications for Baxter. Read more >>

Guns and ammo sales spark jobs boom

Guns and ammo are selling briskly these days, and that means weapons makers are hiring. Some manufacturers are scrambling to find enough workers.

Mike Weddle, head of maintenance at Dynamic Research Technologies, an ammunition manufacturer in Albany, Mo., says he is adding 10 new hires to his staff of 35. DRT's machine operators make between $10 and $17 an hour -- a healthy paycheck in a region where it's tough to find a job and the cost of living is relatively low.

DRT currently cranks out 80,000 bullets per shift and operates two shifts per day. But that's not enough to meet demand. So Weddle is adding a third manufacturing shift and building an additional facility.

"Demand picked up a year ago -- it quadrupled," he said. "It just went crazy." He says .223 caliber ammo, which is for semiautomatic rifles, is particularly difficult to keep in stock. Read more >>

California manufacturing jobs tank

The shutdown of a 102-year-old California manufacturing company points to a major flaw in California's industrial development policy:

We don't have one.

The company is Pneumatic Scale Angelus, which turned out top-of-the-line machines for sealing lids on soda and beer cans from a factory in Vernon. That was a niche business but not a small one, since bottling companies the world over were Angelus customers.

As we reported just after Christmas, Angelus employees were told on Nov. 2 that its owner, privately held Barry-Wehmiller Cos., would shut down production at the plant Jan. 1 and move it to a factory in Ohio. That meant lost jobs for 111 members of the United Steelworkers in Vernon.

The company appears to have fulfilled its legal obligation to inform city and state officials of its plans; economic development agencies at all three levels of government got notices pursuant to the state WARN Act, which requires notifications of such layoffs 60 days in advance. Another copy went to the office of County Supervisor Gloria Molina, whose district covers Vernon. Her office didn't get back to me to explain how they responded to it, if at all. Read more >>

How 'Everyday Low Prices' Are Costing Americans Their Jobs

As consumers, we welcome Walmart's (WMT) low prices. But here's the thing about these low prices -- they're doing the U.S. more harm than good. A new research report has found that low prices have actually caused unemployment to rise, and dealt a massive blow to the manufacturing sector.

Look no further than the 7 million manufacturing jobs the U.S. lost from 1980 to 2011, according to a recent research report from Demos. The report acknowledges this happened because of "a variety of complex factors." But Walmart had a bigger hand in this than most of us realize.

The problem starts with Walmart's selling point: low prices. These low prices are possible both because Walmart pays its employees low wages and because the bulk of Walmart's products are sourced from foreign factories, where raw materials and labor are cheaper.

What's more, Walmart can -- and does -- use its massive size to bully American companies whose products it sells to do the same. In fact, Levi's jeans and Master Lock "were pressured to shut their U.S. factories and moved manufacturing abroad to meet Walmart's demand for low prices," Demos said. Read more >>

US Manufacturing Falls To Second Lowest Level Since The Crisis

U.S. manufacturing grew at the slowest pace since the economy emerged from the financial crisis in 2009 this July, new data out of MarkitEconomics shows. The headline manufacturing index declined 80 basis points during the month to 51.8. Economists polled by Bloomberg had forecast a narrower fall to 52.0. New orders and output both expanded in July, but did so at lower rates that recorded at the start of the summer. Read more >>

Factory Orders in U.S. Decline for Second Month

Orders to U.S. factories unexpectedly fell in April for a second month, pointing to a deceleration in manufacturing as the global economy cools.

Bookings dropped 0.6 percent after a revised 2.1 percent decrease in March, the first back-to-back declines in more than three years, figures from the Commerce Department showed today in Washington. Economists projected a 0.2 percent gain, according to the median forecast in a Bloomberg News survey.

Slowdowns in Europe and parts of Asia combined with a cooling in business spending in the U.S. following a reduction in a government tax credit may limit manufacturing this year. A falloff in hiring may also be causing American households to curb spending on big-ticket items like autos, eliminating another source of strength. Read more >>

Surveys Show Manufacturing Slowing Worldwide

Factory activity worldwide stalled last month as new orders tumbled, heightening fears that the global economy might be heading for another recession and driving stock markets lower.

In the euro area, the purchasing managers’ indexes showed that manufacturing contracted for the first time in almost two years in August, echoing earlier data from South Korea and Taiwan, where new export orders fell sharply.

Britain’s manufacturing sector shrank at its fastest pace in more than two years, hurt by a sharp decline in demand for exports.

The pace of growth in the U.S. manufacturing sector slowed to a crawl but fared better than economists had forecast.

The Institute for Supply Management said its index of national factory activity edged down to 50.6 from 50.9 the month before. The reading topped expectations of 48.5, which would have signaled a contraction, according to a Reuters poll of economists. More...

Manufacturing employs less than 9 percent of the US workforce

Reuters
For more than two decades, Jon Clark has been buying and selling machinery, primarily generators, from defunct American manufacturing plants.

When a manufacturing plant dies, for a while it becomes a hive of activity as a "multibillion dollar industry" strips it of equipment to be "rebuilt, recycle and reused elsewhere."

Based in Texas, the 63-year-old originally hails from Liberal, Kansas ("I'm the most conservative thing ever to come out of Liberal") and says after years of seeing a consistent number of plants shutting down, he was urged in 2003 to open a bimonthly publication that would document those closures in the United States and Canada.

"We figured we could have maybe anywhere up to 25 plant closings around the country per issue," Clark said. "It turns out we grossly underestimated the scale of the closures."

Since then Plant Closing News (PCN), as the publication was named, has regularly featured 75 or more plant closings per issue, or 150 per month. Clark said PCN has seen around 10,000 plant closings since 2003, which is "probably not even half the real total."

The machinery that comes out of those plants often ends up being shipped to developing countries, representing a gradual hollowing out of America's manufacturing capacity.

"The only thing that doesn't get recycled or reused is the people," Clark said. "What do you do with someone who is 50 years old who has been doing the same thing for 30 years? We treat people now like disposable resources and just like that we throw them away."

"All of a sudden we decided that it was more economically viable to shut all these plants down," he added. "I'm sorry, but I think we've taken this too far."

"The golden rule used to be do unto others as you would have them do unto you," said the born-again Christian. "Now the rule is he who has the gold, makes the rules."

THE AFTERMATH

In downtown Saginaw, a few miles from the fading sign in the Texan Restaurant's parking lot there is a handful of architecturally impressive but mostly dead high-rise buildings, a reminder of the high tide of manufacturing-based prosperity that crested here in the 1960s and has receded ever since.

Spray-painted on one building are the words "All gone to look for America," a riff on Paul Simon's song "America": "Michigan seems like a dream to me now, it took me four days to hitchhike from Saginaw, I've gone to look for America."

The Great Recession took a chunk out of America that is unlikely to come back.

Manufacturing generates just over a tenth of America's economic output and employs less than 9 percent of the workforce. Yet it accounted for more than 26 percent of the 8.4 million layoffs in the downturn, according to the U.S. Department of Labor.

There are pockets of strength in the sector, including construction and mining equipment makers like Caterpillar Inc or the world's largest farm equipment maker Deere & Co.

But executives in those areas have been candid about the fact that fresh improvements in productivity during the downturn mean many of the 2.2 million manufacturing workers who lost their jobs will not be rehired. And much of the hiring they plan to do will be overseas to serve developing markets. More...

Despite a 24/7 campaign of carefully managed "good news," 76% do not believe the U.S. "recovery

oftwominds.com
Suppressing the Cognitive Dissonance of a Bogus Recovery
A massive outbreak of economic cognitive dissonance is being suppressed with wave after wave of manufactured "good news." Every visibly negative bit of data is run through a media and Central State assembly line to refashion it as "good news" and "evidence" that the "nascent recovery is taking hold." Whatever cannot be rejiggered is simply buried or suppressed.

The fact that five corporations control the the vast majority of the U.S. mainstream media certainly aids that manufacturing process.

Let's run through a few of the most blatant examples of suppressed dissonance:

1. If the economy is recovering so strongly ( +3% GDP growth in the first quarter!) then why are tax revenues down? Federal budget deficit hits April record: The April deficit soared to $82.7 billion. Total revenues for April were down 7.9 percent from a year ago. In the seven months of this year, corporate tax receipts are up 8.9% to $77.1 billion. The same cannot be said of individual income tax revenue, which is down 11.6% in the first seven months to $500.8 billion.

Through the first seven months of the current budget year, which began on Oct. 1, the deficit totals nearly $800 billion. That is down only slightly from last year's deficit during the same period of $802 billion. Revenues total $1.2 trillion in those seven months, down 4.5 percent from the same period last year.

How can tax revenues be falling when the economy is "growing strongly"? As for those corporate profits: corporate profits register biggest year-over-year gain in 25 years.

As this chart from the Federal Reserve shows, non-financial corporate profits were almost 14% of GDP before the global meltdown. In a $13 trillion economy, that's $1.8 trillion.

But much of the "good news" in Corporate America is not quite as rosy as presented.

2. Rising corporate profits mask falling sales. Consider Walmart's last report, which caused the financial media to quiver in ecstasy because the retailer logged a 10% increase in profits. But behind the hype, (profits rose $0.3 billion on $99 billion in sales, whoopie), Walmart same-store sales drop; gross margins decline.

You have to read to the very last line to get to the sobering reality: same-store sales dropped in the U.S. and gross margins declined. Both are bad news, yet you'd never know it from the lead paragraphs and talking heads.

3. Corporate profits are boosted with special charges and other accounting trickery. It takes a forensic accounting analysis of corporate filings to discern what's real and what's been juiced to boost quarterly "earnings."

Meanwhile, corporations are loading up on debt again: Junk bonds-- essentially risky bets on future corporate earnings--made up the biggest share of corporate debt sales on record last year. That hardly suggests prudence on the part of the companies loading up on tens of billions of dollars of high-interest debt. Load the company with debt, goose profits, cash out the big bonuses and then let the balance sheet implode. More...