American Manufacturing Companies are Expanding

According to a survey of 1,209 engineers, purchasing agents, business owners, sales and marketing executives of manufacturers, distributors, and service companies, over half of US manufacturers expanded in 2012 and nearly two-thirds expect to grow in 2013.  42% of manufacturers are increasing the size of their workforce.  Nearly 70% are introducing new products.

Prospects of future growth look good, but for one important problem.  More than 75% of manufacturing employees are 45 years old or older.  75% of the companies surveyed said only 25% or fewer of their employees were under 32 years old.  Almost half of the companies do not expect this percentage to increase over the next two years.

Those under 32 are members of Generation Y.  Most lack the skills that manufacturers need in the high technology world of modern manufacturing.  Automated production and the rapid design of new or improved products are not skills that the young possess.  What is more, the Generation Y has a bad image of manufacturing.  They have many misconceptions about it as dirty and unable to provide satisfying and well-paying careers.

Yes, some dirty manufacturing jobs still exist, but more and more, dirty is known for causing problems with the product and the high-tech equipment that makes the product.  More and more American manufacturing companies see advantages in a clean and safe workplace which enable them to compete worldwide with many companies that take the low cost and dirty route of poor-quality commodity products.  Many consumers do not want those low quality products.

Periodically, Americans see a wave of low-cost products come in from some sector of the world which is rapidly modernizing, but still far behind American companies.  For a few years they buy those products until they get tired of them failing and falling apart.  Their interest in higher quality American goods then increases, at least until the lesson has to be learned again.  In fairness, US manufacturers also periodically have to learn the lesson that they must distinguish themselves by making their product much better than that of the developing countries.

We seem to be in a time when both US companies and US consumers may be ready to contribute to a renewed resurgence of US manufacturing.  Perhaps some of Generation Y will even figure out that they should climb aboard that train.

The Right to Association with Others - The Right to Work and Hire

The equal, sovereign rights of individuals to life, liberty, property, the ownership of their own minds and bodies, and to pursue their own happiness are very broad.  Limitations put upon individuals by legitimate governments are few and strictly limited to the prevention of violence and fraud.  Among the most basic of an individual's rights are the right to work for a living.  Another is the right to associate with others for voluntary purposes, which includes such rights as the right to trade goods and services, the right to hire employees, the right to be an employee of another, the right to be a service provider, the right to be a customer, the right to use property to provide goods and services, the right to practice a profession or trade, the right to enter into a business partnership, the right to enter into a domestic partnership, the right to exchange ideas, and the right to enjoy friendships and romantic and/or sexual relationships.  The freedom to work and the freedom to associate voluntarily with others are very broad freedoms, which legitimate governments seek to protect.  On the other hand, illegitimate governments, which are much more common, seek to interfere with these basic freedoms.

Illegitimate government was defined in our Declaration of Independence.  Government which is destructive to the unalienable rights of the individual to, among other rights, the right to Life, Liberty, and the Pursuit of Happiness is declared illegitimate and tyrannical.  The United States of America today is full of such illegitimate and tyrannical governments.  These governments feel especially free to interfere with our voluntary associations in trade, work, and cooperation in the following ways

• controls and regulations on the production of goods,
• mandates and limits on the employer - employee relationships, 
• the licensing of professionals and tradesmen, 
• the imposition of slavery upon employers to keep financial records and to keep tax records and file tax forms, 
• limitations on the exchange of services, 
• the dictation of who can be hired and who cannot be hired, 
• the unequal treatment of various domestic partnership combinations, 
• the denial of access to the market of very large companies, 
• the excessive burdening of small companies with laws, mandates, regulations, and paperwork,
• micromanaging safety issues not understood by governments in complex workplaces,
• micromanaging performance standards not understood by governments in complex professions,
• exaggerating safety issues to gain control and to reward special interests,
• exaggerating issues of potential fraud in the interest of control and to award special interests,
• discriminating against many professions with property taxes on their tools and equipment, which does not hurt government pets such as lawyers and accountants and actually increases their business,
• discriminating against many professions because some people believe they are immoral, such as prostitution or marijuana suppliers,
• discrimination against some people in education and the exchange of ideas,
• preventing those with little wealth or income from entering many professions or trades,
• using minimum wage laws to discriminate against the undereducated and the disabled,
• using minimum wage laws to discriminate against young people lacking previous job experience or those living in low-cost-of-living areas (popular with unions),
• limiting the number of companies providing services to bolster the income of those previously in business,
• as a change-up, forcing companies and associations to grant special privileges to unions, people of favored races, people with handicaps, and to governments,
• requiring people to purchase goods and services, such as the services of accountants and lawyers by businesses, health insurance under ObamaCare, seatbelts in cars, child safety seats, high mileage vehicle mandates, unnecessary radiation inspection services for fully contained radiation sources, 
• the regulation and taxation of fossil fuels due to unproven and scientifically wrong fantasies of man-made global warming disasters,
• subsidies for favored people, companies, institutions, and industries, such as the cake-taking ethanol, wind generation, and solar power industries,
• manipulations of the value of the dollar to favor financial institutions or exporters or importers,
• restrictions on foreign competition such as the Jones Act provisos against foreign-owned shipping,
• interference with railroad and trucking rate structures,
• bailing out companies with strong union ties, such as GM and Chrysler, at the expense of other companies and taxpaying consumers,
• the massive transfer of wealth from the private sector to governments,
• requiring the payment of labor union labor rates on government projects or by government contractors,
• crippling American businesses with much higher taxes and regulatory burdens than foreign competitors have,
• and interfering with or failing to ease restrictions on foreign trade, since every individual has the right to trade with others, even when they are in foreign nations.

Of course, many of these restrictions on the freedom of association and work are justified with claims that public safety or the prevention of fraud make them necessary.  These claims are commonly exaggerated in the interest of some special interest, often that of the politician to award his friends and contributors being the foremost special interest.  Fraud should be combated with vigorous legal action against actual instances of fraud, not by overly active imaginations conjuring up ways in which someone in a profession might defraud a customer.  These anti-fraud prevention schemes will always cause more trouble than they address.  They gain traction, however, because many Progressive elitists believe the People are too stupid to choose their own associations well.  The People are imagined to be defenseless against fraud.  Somehow, the government will anticipate every possible fraud and prevent it.  Or so it wants us to believe.  In fact, it is mostly just successful in keeping entrepreneurs from competing for the business of a nation of sovereign individuals.

One of the best organizations in fighting such abuses of governmental power is the Merry Band of Freedom Litigators at the Institute for Justice. They have a long and successful track record of attacking irrational licensing laws and other approaches to preventing people from working and earning a living.  Here is a recent example of their work:

As demonstrated by a series of eight new reports issued in October 2010 by the Virginia-based Institute for Justice, one of the principal obstacles to creating new jobs and entrepreneurial activity in cities across the country is the complex maze of regulations cities and states impose on small businesses.  IJ’s “city study” reports are filled with real-world examples of specific restrictions that often make it impossible for entrepreneurs to create jobs for themselves, let alone for others.

The Institute for Justice has documented how police in Pine Hills, near Orlando, used barber licensing laws there, to fine barbers hundreds of dollars who had years of experience as barbers, but no license.  These raids on unlicensed barbers were used as a cover to search for drugs without a search warrant, showing how a disregard for some individual rights commonly leads to a disregard for other rights.  They also found that in eight major metropolitan areas, nearly one in three professions requires a license.  In the 1950s only about one in twenty professions needed a license.  One of the best ways to reduce unemployment is simply to let people work.  No subsidies are needed, no tax breaks are needed, and no government-sponsored training need be provided.  The governments simply need to get out of the damn way and allow people to work!

My bullet list above provides reason after reason for why Americans are unable to find jobs or to create their own jobs now.

A Medical Insurance Cost Increase

I have just received the renewal cost on the health insurance plan my materials analysis laboratory provides its employees.  The cost for individual coverage is going up 19.7%, which is at least twice the increase I usually see in it.  That more than doubled increase is due to ObamaCare mandates.

While the economy is no longer in recession by the official definition due to some growth in the GDP, large and medium sized companies are still hording their income and refusing to spend it.  There have been decreases in R&D and in quality control efforts as a result.  After a record year in 2008, my laboratory has seen a sizable drop in income in 2009 and so far in 2010 compared to 2008.  Meanwhile, our health insurance costs have continued to skyrocket.  Is it any wonder that companies are not hiring? 

Hiring in the Extended Obama Recession

I hired a scientist in December 2008 and another in April 2009. As noted above, we are awaiting the graduation of a new materials scientist who will begin working in June, if he accepts our position offering. Hiring people in a recession is a risky business, but it is when a small laboratory has its best opportunity to hire good people.

Given all of the best efforts of Obama and his socialist cohorts to create investor uncertainty, I am not being a good example of Going Galt. My laboratory is neither in an industry in Obama's gunsights nor large enough yet for him to try to milk us of all of our equipment and human capital. Of course, when he has stolen all he can from the bigger fish in the commercial realm, he will come after us and all of the other small businesses. And since some of my clients are pretty big fish, they have reason to be very worried in the near future. This is especially true if they have union workers, since Obama has made it clear with his handling of Chrysler and Government Motors that he will serve the interests of union leaders even if it means breaking long-established contract and property-rights laws.

The card-check law the unions want may result in the unionization of many small businesses. This in turn will put those unionized small business more and more in the socialists' gunsights, since they wish to find every opportunity to strengthen the unions with goodies taken from dirty, rotten capitalist pigs, such as small businessmen or any other businessmen. The unions will try to devour small companies using card-check to get to these goodies.

But, there is a countervailing effect which is going to surprise the unions and the socialists who back their avarice for stolen goods. Investors will understand the connection between the unions and the theft of capital which they will practice with the help of the union-pandering socialist government. The moment a company is unionized or it is clear that an attempt to unionize it is underway, its investors will seek to dump it. Investor discrimination against unionized companies will become much stronger. Investors will still want to invest, but they will seek out companies which will be hard to unionize, seek out non-commercial bonds, and invest abroad. All Americans will be hurt by this, but what else can an investor do given the strong-arm of brutal socialist government? Unionized companies will not be able to get adequate capital in the free market and will become dependent upon government to prop them up. Of course, this has been the case to a considerable degree in the past, but the flight of private, voluntary capital will be more massive and more and more only government will be able to keep unionized companies on life-support.

American workers have already seen the connection between company failure and unionization. This is why labor union membership in the private sector has fallen so drastically as a percentage of the workforce in the last 55 years. 35.7% of all workers in the private sector were union members in 1953. Now only 7.6% of private sector workers are union members. This is why the labor union leadership is desperate for card check, as are those Democrat politicians who are dependent upon the union leaders for campaign money and labor. They must do something to force workers to join the private sector unions those workers recognize as the cause of a slow death for the companies that employ them.

Thus, both investors and able workers will shun companies that are unionized. There is nothing new in this. This is a tried and true pattern. We have seen the effects in the U.S. in the big steel companies who came out of the 1950s and 1960s thoroughly unionized. We have seen the effects upon the American automobile companies. We have seen the effects throughout Europe. There is no rocket science involved in understanding what will happen.

I believe this recession was caused by the oil-price shock which preceded it by 9 months as explained by Alan Reynolds. See my earlier post on 11 April 2009 on his excellent article. The recovery from this recession was delayed by the lack of confidence in the private sector and the panic of Paulson and Bernanke toward the end of the last Bush administration. Then, incredibly, the people elected Obama to bring on change, which he has done with a socialist vengence against American investors, American manufacturers, American financial institutions, business owners and managers, non-union American workers, and all of the consumers of American goods who will hereafter pay higher prices for almost everything. This massive mistake by the American people will cost them dearly with a much delayed recovery and many added deadwood drags on all commercial activities and most of our individual efforts to pursue our happiness.

I strongly advise you to do a great job of insulating your homes and business buildings, because all of us are soon going to be hit by much higher heating and cooling costs, thanks to Obama and his allies in the uncompetitive wind generation and solar power industries.