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The Future of Manufacturing, GM, and American Workers (Part II)


Symbolic analysts have been hit by the current downturn, just as everyone else has. But over the long term, symbolic analysts will do just fine – as long as they stay away from job functions that are becoming routinized. They will continue to benefit from economic change. Computer technology gives them more tools for thinking, creating and communicating. The global market gives them more potential customers for their insights.

To be sure, symbolic analysts are popping up all over the world. More than half of all Fortune 500 companies say they're outsourcing some software development or expanding their own development centers outside the U.S. But apart from recessions, demand for symbolic analysts in the U.S. will continue to grow faster than the supply. Innovation creates that demand, and demand for it, in turn, generates more innovation.

It's simply wrong to assume a zero-sum game among nations. There is no finite amount of symbolic-analytic work to be parceled out around the globe. There is no limit to the capacity of the human brain to discover new problems needing to be solved, or to create better solutions to old problems. And no limit to the number of problems needing solutions.

In decades to come, nations with the highest percentages of their working populations able to do symbolic-analytic tasks will have the highest standard of living and be the most competitive internationally.

America’s biggest challenge is to educate more of our people sufficiently to excel at such tasks. We do remarkably well with the children from relatively affluent families. Our universities are the envy of the world. and no other nation surpasses us in providing intellectual and creative experience within entire regions specializing in one or another kind of symbolic analytic work (LA for music and film, Silicon Valley for software and the Internet, greater Boston for bio-med engineering, and so on).

But we’re in danger of losing ground because too many of our kids, especially those from lower-middle class and poor families, can’t get the foundational education they need. The consequence is a yawning gap in income and wealth which continues to widen. More and more of our working people finds themselves in the local service economy -- in hotels, hospitals, restaurant chains, and big-box retailers -- earning low wages with little or no benefits. Unions could help raise their wages by giving them more bargaining leverage. A higher minimum wage and larger Earned Income Tax Credit could help as well.

Not all of our young people can or should receive a four-year college degree, but we can do far better for them than we're doing now. At the least, every young person should have access to a year or two beyond high school, in order to gain a certificate attesting to their expertise in a particular area of technical competence. Technicians who install, upgrade, and service automated and computerized machinery -- office technicians, auto technicians, computer technicians, environmental technicians -- will be in ever-greater demand.

Some argue that even if I’m correct about all this, the erosion of traditional manufacturing impedes the capacity of Americans to learn important symbolic-analytic tasks, because such learning depends on an intimate understanding of the manufacturing process. This may be true for a few of these tasks: manufacturing engineers surely need to know manufacturing inside out and some design engineers need that knowledge as well. But most symbolic analysts do not. Whatever they need to learn about manufacturing can usually be discovered online.

Others argue we need more manufacturing in the U.S. because our national security depends on it. That seems doubtful. U.S. military contractors subcontract all over the world. As long as they diversify their sources so as not to be dependent on one location or country, we’re safe. In the unlikely event that much of the rest of the world where manufacturing is now done suddenly turns on us, we can create the factories and equipment we need. We’ve mobilized for war before, quite successfully.

Still others say that eventually the dollar will drop so low that global firms will find it profitable to locate traditional manufacturing assembly in the United States. Don't hold your breath. But if and when that should happen, Americans will be far poorer than even low-wage workers are today, because everything we purchase from anywhere will be far more costly.

Obviously, the market is fallible, as we’ve recently and painfully experienced. And sometimes we need to consider what’s good for our economy and society as a whole regardless of where the market may lead us. But that’s exactly where I depart from those who believe we need to protect or bring back traditional manufacturing in the United States. To do so would be enormously costly. I just don’t get how those costs can possibly be justified.

Tomorrow: Where does GM come in?

29 Comments

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Not quite sure that the term "symbolic analyst" is well defined. If we look at it as a modified noun, it literally implies an analyst that is symbolic as opposed to....what real?
Discarding that interpretation by the Principle of Charity (see ,Herbert Paul Grice ) one might interpret the locution to mean an analyst that deals with symbols.

That does not get us too much further either down the road because: language is symbolic, analyst must use language(s) to do their work (indeed we all use symbols to think in general) and so the adjective seems redundant.

Far be it for me to suggest Dr Reich find a better expression for what he wants to say because I'm not quite sure what exactly it is.

So let me just give my two cents. What we need are people who show two characteristics 1) an ability to think both practically and abstractly and the ability to formulate abstract thought that has practical applications, and 2) these people need to be well grounded in moral principles so that they don't use their symbolic analysis for diabolical ends. The recent geniuses that devised clever schemes to defraud the public and the whole financial system, we can do without.

My recommendation is a mandatory course in logic for any AA or above candidate. You might want to add an introduction to philosophy and an introduction to ethics course taught BY REAL PHILOSOPHERS and not Humanities people who have enough graduate credits to teach the subject but who are invariably lousy at it. Philosophy is an excellent subject for the exercise of the mind's capacity for abstraction . And logic is essentially the study of the rules of right reasoning. That is general enough and can be applied by the student in whatever career she chooses to pursue.

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The reason they're so easy to overlook is that so much of the new value added is invisible. A growing percent of every consumer dollar goes to people who analyze, manipulate, innovate and create. These people are responsible for research and development, design and engineering. Or for high-level sales, marketing and advertising. They're composers, writers and producers. They're lawyers, journalists, doctors and management consultants. I call this "symbolic analytic" work because most of it has to do with analyzing, manipulating and communicating through numbers, shapes, words, ideas. Symbolic-analytic work can't be directly touched or held in your hands, as goods that come out of factories can be. In fact, many of these tasks are officially classified as services rather than manufacturing. -- Reich


Symbolic-analytic workers identify and solve problems; in Reich's words, they are "strategic brokering" people. In some ways, symbolic analysts are similar to routine production workers because they typically compete on an international level for positions; because so much of the work of symbolic analysts takes place in computer-mediated communication, they are more likely able to telecommute. But in most other ways symbolic analysts differ from the other job classifications in terms of status, responsibilty, mobility, and pay. Because they are often highly recruited, they are more able to move from place to place because of their higher disposable incomes and because companies will often pay moving expenses for their services. In essence, symbolic analysts act out the movement away from history (where an employee often worked in the same location and position as their parent and even grandparent) to power over global information spaces. http://english.ttu.edu/kairos/1.1/features/johndan/symbolic_analytic_103.html


In his book Datacloud, Johndan Johnson-Eilola points out that today’s workplace involves jobs requiring symbolic-analytic work. This type of activity consists of gathering information, circulating it, reorganizing it, seeing patterns in it, and gleaning concepts from it.

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The ideal would be the independent contractor/consultant, thirty-something, unattached, roaming the world to wherever the next gig can be found, complete with Blackberry and laptop, the ultimate intellectual piece-worker.

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Roaming the internet, not the physical global world.

I cannot quite tell how serious Reich is about this notion's applicability now. SAW, symbolic-analytic work, can be considered in several ways:

SAW necessary to production
SAW convenient to production
SAW imaginarily connected to production
SAW disconnected from production

A similar symbolic analysis applies to SAW and consumption.

Reich has discussed this at least since 1991, so in one sense it's just an old SAW.

But let's consider: If 5% of labor can feed a society, what to do with the 95% of labor? That is, if 5% are sufficient to production of necessary goods (food, water, basic shelter) there is a huge supply of labor available for production of unnecessary goods.


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And the greatest SA of the 21st century is? The envelope please. And the winner is . . . .

Joe Cassano!

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And Bernie Madoff is runner up?

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Nah. Bernie did it the old fashioned way.

He schmoozed.

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That too.

But he managed to perpetuate a largely symbolic investment company for decades, compared with just the few years of Joe Cassano's tenure at AIG FP.

Possibly, a "lifetime achievement" prize?

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He's in the running for most symbolically notorious so far, but 21st Century?

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In his book Datacloud, Johndan Johnson-Eilola points out that today’s workplace involves jobs requiring symbolic-analytic work. This type of activity consists of gathering information, circulating it, reorganizing it, seeing patterns in it, and gleaning concepts from it.

Sounds like the kind of stuff any reasonable person does on a daily basis. No need to coin a special term for it.

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No, you're over-simplifying.

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If this Homo Analyticus Symbolis is something that Dr Reich is projecting into the future, then it is understandable that the term is not yet well-formed; that it is more emotive than exact..

It isn't as if Dr. Reich or anybody here can give us a precise definition of that infelicitous phrase: "symbolic analyzer". It seems everyone is just reading into it whatever it invokes in their mind which is a sure indication that the term is not complex but ambiguous. If it were merely a complex concept, well, then there should be no reason why you can't spell it out in the sense that all and only those persons are symbolic analysts if they meet criteria x,y,z...

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of course that should be evokes not invokes

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That is your own phrase.

I quoted Reich himself. Is that not good enough for you?

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Quoting Reich does not change the fact that the term is ambiguous. It's somewhat like the guy who can't believe what he reads in a newspaper going out and buying another copy to make sure it is right.

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I quote Reich to help explain the intended usage. Maybe you skipped that part of my comment:

"A growing percent of every consumer dollar goes to people who analyze, manipulate, innovate and create. These people are responsible for research and development, design and engineering. Or for high-level sales, marketing and advertising. They're composers, writers and producers. They're lawyers, journalists, doctors and management consultants. I call this "symbolic analytic" work because most of it has to do with analyzing, manipulating and communicating through numbers, shapes, words, ideas. Symbolic-analytic work can't be directly touched or held in your hands, as goods that come out of factories can be. In fact, many of these tasks are officially classified as services rather than manufacturing. -- Reich"


But you're right about one thing. The way you quote out of context does NOT help explain anything in what Reich wrote.

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Here is Reich's opening sentence:

symbolic analysts have been hit by the current downturn, just as everyone else has

I rest my case.

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Bob,

As one of those manufacturing boosting troglodytes, let me quickly clarify the position (or at least my position) on manufacturing and the dollar. The U.S. currently is running an enormous trade deficit (temporarily shrunk by the recession) because China and other exporters are effectively subsidizing their exports by buying up huge amounts of dollars. This raises the value of the dollar against their own currency, making their imports cheaper for people in the United States.

At some point, China and other major exporters will likely tire of subsidizing our consumption. They can pay anyone to buy their stuff, including their own populations, they don't have to pay Americans to buy it. When they stop paying us to buy their stuff, then the dollar will plunge.

In that case, our manufacturing sector is likely to prove more competitive than other sectors open to trade. Our wages are less out of line with the rest of the world in manufacturing than in areas like computer or financial services.

While the U.S. does currently enjoy modest trade surpluses in these areas, this is likely to be reversed in the near future as world class industries develop in places like India and China. On a per worker basis, the gap in pay in finance and software engineering swamps the gap in pay in manufacturing.

For this reason, when we get to a world where we actually have to pay for the goods we import, we are likely to end up both importing fewer manufactured goods and paying for some of these imports with manufactured goods.

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That sounds pretty sensible.

And in general, would not countries that have moved away from crudely manufacturing anything be in a position to resume (if they had to) in roughly the reverse order that they left off?

It looks to me as if Secretary Reich has allowed some pet notions about improving education to interfere with his economics in this matter.

Happy days.

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How about these numbers?

In 2004, 2,191 students in my state's capital, Richmond, Virginia were enrolled in public schools, but only 1140 of them graduated four years later. Those numbers do not include the kids that left school even before the ninth grade.

Only 52% of urban kids ever graduating is not an unusual number. Plus, those numbers reflect a condition that has existed in public schools for decades.

Moreover, those numbers reflect multiple underlying causes that affect people across the country. Huge drop-out and push-out rates are certainly not the fault of school systems by themselves. Often they just do the final push.

Without assembly jobs, how will half of the people in urban centers ever earn an income that propels the economy? Or, looking at it another way, how will we increase the school completion rate so that your vision is feasible?

Bob Spencer

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I thought of another type of problem to consider.

I lived in Maine a few years ago, and one important issue facing the Mainers is that they have the fourth highest rate in the country for high school graduates, but are fourth from the bottom in the number of students entering postseconary education.

George Mitchell led with efforts to change those numbers. Nevertheless, Maine is one of the places that lost manufacturing jobs early. Now, huge numbers of college graduates are working as supermarket checkers and retail clerks.

Maine has a rich resource of progressive civil society leaders and a workforce that would be way above average in its willingness to strive. So, how come not much has changed in the past few decades?

I often think that Maine would be a good place to start testing the kind of ideas that you offer.

Bob Spencer

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Oops!

In my first post, I should have said that in 2004, 2,191 students were enrolled in the NINTH grade.

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There is no finite amount of symbolic-analytic work to be parceled out around the globe. There is no limit to the capacity of the human brain to discover new problems needing to be solved, or to create better solutions to old problems. And no limit to the number of problems needing solutions. Robert Reich

True; the "limit" is the money (income or capital) to pay for the solutions these symbolic-analysts come up with. And since symbolic-analysts only get paid for their brainstorms when someone buys their solutions, well . . . .

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There is the old joke about how one lawyer moved into town and was close to starving. Then another moved in and they both made a good living.

A less fanciful example would be the tax code. Not only is there an opportunity for think tanks, lobbyists, legislative staff, experts from the executive branch, and various others symbolic analysts attached to the legislative process to present "improvements" to further this or that objective, but the resulting complexity provides a steady income for lawyers, accountants, tax experts, financial planners, tax software developers, information systems project managers, etc. who cope with the resulting complexity.

A great deal of symbolic analysis work can be created without much consideration of whether anyone is interested in paying for it.

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While I agree that your examples of "solutions" to problems authored by certain of today's SAs are probably not the "problems" Reich has in mind, it is not true that there isn't a market for these types of solutions*.

* That is, solutions to the problem of how to transfer costs (taxes in this case) from me to you.

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It seems to me that the analyst position itself has become devalued, due to industry pressure to make a quick buck. Henry Blodgett, anyone? Beyond the traditional analysts role, the demise of the Big Whatever Consulting firms would also seem to counter Reich's rosy scenario.

I particularly like the howler about how they can find out everything they need to know about manufacturing on the Internet--priceless! It's the classic divide between academic/generic 'manufacturing' and the real thing--kind of like the old truism that the symbol is not the thing it represents.

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Is is salve or is it snake oil? Most of what people produce here in the USA isn't essential, but it still improves standards of living for someone.

But that's only part of the issue. The other piece that everyone seems to be dancing around, here is the influence of power on wages.

I heard this story second hand, so maybe it's apocryphal:

A manager and a machinist were having a disagreement at a company event and the machinist said that he could do the manager's job. The manager said that she could do his job, too. And he said, "No. You couldn't."

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Although normally a huge fan of Robert Reich’s, I find this two-part series of his to be very disappointing. A tenth-grade writing teacher would send these essays back for revision.

How about some numbers or evidence to back up the claims and assertions?

Sure there will be plenty of demand for symbolic analysts or analytical symbolists or whatever we want to call these smart people. We probably can’t produce enough of them. So what? We’re creating ten jobs for waiters, bottlewashers and room cleaners for every engineer and economist our universities produce.

I’d like to think it’s true that the nation with the greatest analytical and advanced scientific capacities will prosper the most. But an economy that elicits admiration from economists and business leaders because it enriches a few while everyone else treads water (as was the case in the US for the last ten years), can only be considered a success if we ignore the welfare of most of the people trying to survive in it. If we’ve seen anything since 1972, it’s that income inequality can grow right alongside national economic growth. While the rich in the US got richer, the middle class melted away. Median US income today is just about where it was in 1972 in real terms.

It’s not good enough to say, as Reich argues, that we can encourage manufacturing innovation without manufacturing plants to experiment with. As Paul Craig Roberts (a Treasury official in the Reagan years) argues, innovation in manufacturing happens not in the lab but on the line.

And really, given the shocks this country has experienced in the last ten years, Reich does us a disservice to pretend that we can wish away the national security implications of outsourcing our manufacturing capacity and supply chains. The best evidence of that lies in Boeing, which in an effort to lower costs and build markets has suppliers from seven countries building major parts of its new 787 Dreamliner. The result? The Dreamliner is two years behind schedule (largely due to supply chain problems) and critical industrial capacity and manufacturing skill in the US are showing signs of rusting.

Is it too much to say that the US no longer manufactures airplanes, but simply assembles them? It probably is, but that’s the path we’re going down – and one of these days, we’ll find ourselves without the engineers and scientists needed to develop, manage and maintain a first rate aerospace industry. You just can't crank up this kind of capacity on the fly. The US was able to start turning ploughshares into swords in a matter of weeks during World War II because it already possessed the industrial capacity to make the ploughshares (automobiles) in the first place.

Do we need GM and manufacturing? Michael Moore, who began predicting what would happen to GM about twenty years ago with his brilliant little film “Roger and Me” (spoofing his efforts to interview the then-CEO of GM, Roger Smith), has earned the right to be heard on this. This is what he had to say just today on his blog:

“The only way to save GM is to kill GM. Saving our precious industrial infrastructure, though, is another matter and must be a top priority. If we allow the shutting down and tearing down of our auto plants, we will sorely wish we still had them when we realize that those factories could have built the alternative energy systems we now desperately need. And when we realize that the best way to transport ourselves is on light rail and bullet trains and cleaner buses, how will we do this if we've allowed our industrial capacity and its skilled workforce to disappear?”

As a great admirer of Robert Reich, I was hoping for much more. I wanted to be convinced that my anxieties about what's happened to the middle class in the United States and about the way we've outsourced manufacturing were overblown. I'm not convinced. I’m terribly disappointed with where he wound up.

I need to be convinced that an advanced economy in which everyone can prosper can be built on services. Mark Twain made the essential point long ago: A village, he said, can’t support itself if everyone is taking in the neighbors' washing. That is to say, an economy can’t prosper on services alone – no matter how many symbolic analysts it produces.

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