Manufacturing Decline Is Undoing Economy China-Style: “Millions of Workers Are Going to Lose Their Jobs”

by | Mar 2, 2016 | Commodities, Headline News | 45 comments

Do you LOVE America?



    This article was written by Michael Snyder and originally published at his Economic Collapse blog.

    Editor’s Comment: It is clear that a manufacturing decline has long since been underway — there is every attempt to “level” the income and living standard of the once-Middle Class America to that of modern-day peasants in other developing nations around the world.

    The bright, shining bubble for manufacturing and the American way of life after the United States came home a victor in WWII is over with, after decades of undermining prosperity at home for an empire overseas and a new system of government that has no respect for individual rights and IS NOT working towards the interests of ordinary people in this country, or any other.

    Plunging Manufacturing Numbers Mean That It Is Time To Hit The Panic Button For The Global Economy

    by Michael Snyder

    We haven’t seen numbers like these since the last global recession.  I recently wrote about how global trade is imploding all over the planet, and the same thing is true when it comes to manufacturing.  We just learned that manufacturing in China has now been contracting for seven months in a row, and as you will see below, U.S. manufacturing is facing “its toughest period since the global financial crisis”.  Yes, global stocks have bounced back a bit after experiencing dramatic declines during January and the first part of February, and this is something that investors are very happy about.  But that does not mean that the crisis is over.  All bear markets have their ups and downs, and this one will not be any different.  Meanwhile, the cold, hard economic numbers that keep coming in are absolutely screaming that a new global recession is here.

    Just consider what is happening in China.  Manufacturing activity continues to implode, and factories are shedding jobs at the fastest pace since the last financial crisis

    Chinese manufacturing suffered a seventh straight month of contraction in February.

    China’s official Purchasing Managers’ Index (PMI) stood at 49.0 in February, down from the previous month’s reading of 49.4 and below the 50-point mark that separates growth from contraction on a monthly basis.

    A private survey also showed China’s factories shed jobs at the fastest rate in seven years in February, raising doubts about the government’s ability to reduce industry overcapacity this year without triggering a sharp jump in unemployment.

    For years, the expansion of the Chinese economy has helped fuel global economic growth.  But now things have shifted dramatically.

    At this point, things are already so bad that the Chinese government is admitting that millions of workers are going to lose their jobs at state-controlled industries in China…

    China’s premier told visiting U.S. Treasury Secretary Jacob Lew on Monday his government is pressing ahead with painful reforms to shrink bloated coal and steel industries that are a drag on its slowing economy and ruled out devaluing its currency as a short-cut to boosting exports.

    Premier Li Keqiang’s comments to Lew on Monday were in line with a joint declaration by financial officials from the Group of 20 biggest rich and developing economies who met over the weekend in Shanghai. They pledged to avoid devaluations to boost sagging trade and urged governments to speed up reforms to boost slowing global growth.

    Across all state-controlled industries, as many as six million workers could be out of a job, with almost two million in the coal industry alone.

    But it isn’t just China.  Right now manufacturing activity is slowing down literally all over the planet, and this is exactly what we would expect to see if a new global recession had begun.  The following chart and analysis come from Zero Hedge

    As the below table shows, 28 regions have reported so far. Seven saw improvements in their manufacturing sectors in February, twenty recorded a weakening, and India was unchanged. This means that over 70% of the world saw manufacturing sentiment deteriorate in February compared to January.

    February Manufacturing Numbers - Zero Hedge

    In terms of actual expansion, there were 21 countries in positive territory and 7 in negative. In particular, Greece moved from neutral to contraction territory, while Taiwan dropped below breakeven from expansion.

    Unfortunately, most Americans don’t really pay much attention to what is going on in the rest of the world.  For most of us, what really matters is what is happening inside the good ole USA.

    And of course the news is not good.  There were more signs of trouble for U.S. manufacturing in the February numbers, and this continues a trend that stretches back well into last year.  The following is what Chris Williamson, the chief economist at Markit, had to say about these numbers

    “The February data add to signs of distress in the US manufacturing economy. Production and order book growth continues to worsen, led by falling exports. Jobs are being added at a slower pace and output prices are dropping at a rate not seen since mid-2012.

    “The deterioration in the manufacturing sector’s performance since mid-2014 has broadly tracked the dollar’s rise, which makes US goods more expensive in overseas markets and leads US consumers to favour cheaper imported goods.

    “With other headwinds including the downturn in the oil sector, heightened uncertainty due to financial market volatility, global growth worries and growing concerns about the presidential election, it’s no surprise that the manufacturing sector is facing its toughest period since the global financial crisis.

    Over the past couple of decades, the U.S. economy has lost tens of thousands of manufacturing facilities.  We desperately need a manufacturing renaissance – not another manufacturing decline.

    As good paying manufacturing jobs have been shipped overseas, they have been replaced by low paying service jobs.  As a result, the middle class is shrinking and the ranks of the poor are exploding.

    It is hard to believe, but today more than 45 million Americans are on food stamps, and a significant percentage of those individuals actually have jobs.  They are called “the working poor”, and it is becoming a major crisis in this nation.

    And no matter what Obama may say, unemployment remains a major problem in the United States as well.  At this point, unemployment rates in 36 states are higher than they were just before the last recession hit in 2008.

    Of course a lot of people are going to look at this article and will point to the stock market gains of the past couple of weeks as evidence that “things are getting better”.  It is this kind of clueless approach that is keeping the American people from coming together on solutions to our problems.

    The truth is that the United States has been experiencing economic decline for decades.  Our economic infrastructure has been gutted, the middle class is steadily deteriorating, and we have amassed the biggest pile of debt in the history of the world.

    Anyone that believes that things are “just fine” is in a massive state of denial.  Consuming far more wealth than we produce is not a formula for a sustainable economy, and it is just a matter of time before we find this out the hard way.

    GetPreparedNow-MichaelSnyderBarbaraFixMichael T. Snyder is a graduate of the University of Florida law school and he worked as an attorney in the heart of Washington D.C. for a number of years.

    Today, Michael is best known for his work as the publisher of The Economic Collapse Blog and The American Dream

    If you want to know what is coming and what you can do to prepare, read his latest book [amazon text=Get Prepared Now!: Why A Great Crisis Is Coming & How You Can Survive It&asin=150522599X].


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      1. China seems to be having their own SHTF…

        • I was in Manufacturing my whole life. My business always did well because I bought from and sold to local people. I bought very little from China until the parts just werent made here any more. Then I retired..

          • Someone here told this community two years ago that China was a BIGGER threat to the Global Economy than the USA.

            Someone here pointed out to this community two years ago, that China has had 25 years of unbroken prosperity and that when the dominoes started to fall, social unrest could explode in China, sparking a revolution.

            It’s just beginning. As designed by the FED. 🙁

            • “Someone here told this community two years ago that China was a BIGGER threat to the Global Economy than the USA.

              Someone here pointed out to this community two years ago, that China has had 25 years of unbroken prosperity and that when the dominoes started to fall, social unrest could explode in China, sparking a revolution.”

              And that someone was me. Delusional plagiarizing schmuck that you are.

              • 🙂 You need to remember that the average person here is 50+ and usually cant remember what he ate for lunch let alone who to credit for some obscure quote.

                • Its in the archives Ed and the search engine is in the top left hand corner of the page !!! 🙂

        • The issue is much greater than China–I believe that humans are progressing ourselves toward obsolescence in many fields of former employment.

          Just today alone, I had the day off for my annual doctor check-up. I pumped gas at a “self serve” to fill up my car where once was a service attendant and full serve.
          I went inside and got myself a cup of coffee and hit the ATM for a $100 pocket money–in the past I may have needed a café for coffee and a teller for a bank transaction.
          I arrive at the doctor’s office and there is no receptionist–I kid you not, no receptionist. My health card is slid into a scanner, I fill out my birthdate and name on a touch screen and it confirms my apt, acknowledges I’ve arrived and lets the Dr know I’m waiting.
          On the way home I stop at the grocery store for some fresh fruit for breakfasts–even though I only had 5 or 6 items in my basket I made a point of going to a clerk at a register instead of self checkout….maybe we can keep those jobs a bit longer if we take a minute extra and utilize them–otherwise, it may be one of our jobs next.

      2. I’ve been in manufacturing all my life. I’ve always been a little better than most around me so I’ve always had a job. I am currently managing sourcing for an international OEM and I’ve had several shops close since I started here more than half a decade ago. Several of our suppliers are my old employers and they’re telling me things are terrible, even in this manufacturing hub.

        I’m more determined than ever to get my garden to work and provide other sources of food for my family in the event I lose my job. Been stocking up on supplies, tools and raw materials to be able to create/fix things around the house. Picked up several more truck-loads of free firewood.

        • Latest acquisitions are several different types of hand saws, a spare chain for the husky chainsaw, wedges, mauls and sledge hammers for splitting.

          Also been grabbing 10 extra gallons of diesel every couple of weeks since it’s so cheap. Need a 55 gallon drum because all my 5 gallon containers are full. I’m also thinking an auxiliary fuel tank for the truck, mine’s stock at 22 gallons. Got some Pri-D and Pri-G to keep it stable.

          All my chickens are laying, getting about 3 eggs a day from the 4 of them, this is during winter! Still debating if I want to start with rabbits yet or wait.

          I’ve got about 20 bicycles in various shape, at least 5 fully functional. The rest are for parts and to teach my 10 year old how to work on them. First he’ll take them apart, we’ll catalog and store all the parts, then I’ll have him build one from scratch. Then we’ll move on to ICE repair. I’ve got an old VW motor in a sand rail frame and an old jeep that are just begging to be restored. Also got a couple of ATVs, a dirt bike and a chain saw that will require very little to get going but will provide priceless education.

          • You are a very wise man. Your son is fortunate to have you. A true example of what the US and the West used to me about.

            Nice post.

            • Thanks test. He’s a total motorhead so I want him to learn all he can, including machining (I have a machine shop in my garage, too) He was riding bikes w/out training wheels at 3. Knows just about every exotic, super and sports car on sight. Loves being outside doing things including riding ATVs/motorcycles/bicycles, driving my jeep, shooting, you name it. The 13 year old likes all the latter stuff but he’d rather be inside so it’s harder to get him interested but when I’m wrenching on car’s he’s always there and learning. He’s just not as anxious as the 10 year old.

          • Get that auxiliary tank for your truck while diesel prices are still low. I added a 92 gallon tank to my truck when diesel prices were above $4.00 a gallon. That tank, along with the 28 gallon stock tank, I carry 120 gallons of diesel. You can do the math on the cost of that initial fill up. My auxiliary tank feeds my stock tank. As I use the fuel from my stock tank, I replenish it from my auxiliary tank. When filling up at a fuel station I only fill the auxiliary tank. This way I am always keeping the fuel rotated out in both tanks. At 17 mpg from my Duramax, thats a 2000 mile range. Pulling my travel trailer, it drops to 13 mpg, or about a 1500 mile range.

            • I’ve been shopping for the auxiliary/transfer tank. Finding them for around $600 in ok shape. I hate being tied down to 300 miles (200 pulling the fully loaded toy hauler) so I’ve been buying extra. Writing the earlier post motivated me so I took an early lunch and went and picked up the two steel drums for the diesel and I’ll start buying some gasoline as well and fill the other one.

          • Cool beans Billy,, sounds familiar

            • Beans are on my list!! 🙂

              I’m the only one in the family that eats them though. Meh, they’ll get hungry some day…

        • I just came in from shoveling compost, holy crap i’m going to be sore tomorrow when we shovel dirt. Late last year i built 16 raised garden beds that are 2′ high and 4′ x 8′. I used 2×12″s for the sides and 4×4 posts for the corners and middle post on the 8′ sides. We have put several inches of river rocks in the bottom, then 2 wheelbarrow loads of compost in each and will then fill them with topsoil tomorrow.

          The topsoil will have a little vermiculite and perlite added as well as approximately 10% by volume used potting soil from our tomato barrels from last year.

          Any thoughts from the gardening veterans about the soil quality of my beds?

          • There are tests you can do on the soil to check the PH. If you have room, rabbits are rumored to make incredible fertilizer with no composting required. Spread directly into your garden. I’ve heard you can grow tomatoes in sand with rabbit droppings as fertilizer but of course, that was on the innerwebs and may or may not be true. That’s my next animal purchase.

          • If you have deadwood around, put it in the bottom. No rock. Deadwood soaks up rainwater then releases it to plant roots during dry spells. No watering. See hugelkultur. Pacific Northwest, where I am from, has natural hugelkultur on logs.
            didn’t you say you have lots of deadfall? Lol… better than tripping over it in the woods! I am only on raised bed 5 at my house. 🙂

          • Won’t raised beds made from wood rot out quickly?

            I’m wondering about making some out of brick or stone; but winters here are tough and between frost heaves and melt/freeze cycles those might have a limited life also.

            Ideas, anyone…???

            • Hi Karl
              I have more concrete pad than I want and used concrete blocks to build raised beds on top like a potager. They are awesome. In my other areas I have been using free rock from my property to build small terraces and raised beds. I get freeze, thaw cycles too. My oldest bed is 3 years, no problems. I love gardening at 18-24 inches! Getting spoiled so building more.

      3. Alan Greenspan’s comments about current economics in this short video explain it all.

        Here are the best quotes:

        As far as the US economy is concerned, Greenspan isn’t optimistic. “We’re in trouble basically because productivity is dead in the water…Real capital investment is way below average. Why? Because business people are very uncertain about the future.”

        And finally, here’s the punchline I liked best. Asked whether he’s optimistic going forward, Greenspan said this: “No. I haven’t been for quite a while. And I won’t be until we can resolve the entitlement programs. Nobody wants to touch it. And that is gradually crowding out capital investment, and that’s crowding out productivity, and it’s crowding out the standards of living… where do you want me to go from there.”

      4. I repair bicycles for charity since I retired a few yrs. ago. Problem, most of the bike parts I buy new, come from China. Guess I’d better stock up on the must replace parts needed. I’m almost 70 maybe I won’t be doing the repair much longer, who knows. Peace.

        • You are correct. I owned a Bike shop for several years. Almost ALL bike parts come from CHINA. Its hard to believe that its cheaper to build Brake pads for bikes in china then ship to US, transport to my shop. Than making them here in the USA.

          • Not hard to believe at all. You’re basically paying for material. As I said in an earlier post, I’m in sourcing for an international OEM. Our products have up to 13,000 components in them, including motion control, vision and thermal subsystems. I see just about every type of commodity there is.

            There’s not much the US can do competitively against China when it comes to price. And we’re teaching them in leaps and bounds how to make better quality parts (we’re very strict in our Quality).

            When I estimate machined parts, I use $65.00/hr to $120.00/hr for US based shops and $15.00/hr to $25.00/hr for Asian shops. If you are familiar with manufacturing machined parts you’ll know how much labor goes into it, even with CNC machines. Imagine, for all intents and purposes, not having to pay for labor.

            It’s sad and I have animosity about the work I do but I have helped several shops become competitive or at least increase their skill sets so they can make parts we can’t make in Asia. Yet. My second year here I went to an Asian country for 3 weeks to train the machine shops/programmers. They’re smart and catching on quick.

            However, I will not do that again (go to another country to teach them my ‘trade’) because I wouldn’t be able to live with myself. Yes, I risk losing my job but I have morals and priorities and have never put them above my job and never will. I’ll go back to making half the money cranking handles and making chips first.

      5. I live in Greenville SC . Many years ago , Greenville SC was called “The Textile Capitol of The World “. Almost everyone worked in a cotton mill or weaving plants. It seemed like there was a plant on every corner. A couple of times a day a man with a push cart would go around selling soft drinks and crackers. The employees of the mills called the cart “the dope wagon ” because Coca Cola had cocaine in it . The Jews pretty much owned and controlled these plants. The employees worked 60 or 70 hours a week. No overtime back then. Made very little money. One reason the dope wagons sold so many cokes. Most of the mill workers lived in mill villages owned by the Jews . These mill workers kept their yards and houses in pretty good shape. They were a proud group of people. As the older employees died out or burned out, the younger generation refused to put up with the bull shit. The Jew mill owners were then forced to find fresh , healthy slaves ,which they did , in China. Now ,the mill villages are falling in. Only ghetto rats ,taco crunchers , and red neck trash live in them.

        • Hi John, I live in Greenwood SC. Lot of mill vilages here also. Use to work up in Swannanoa NC at a plant called Beacon. Largest textile mill in the world. Textile jobs have always moved. Started in England. Then north, then south. It always follow the cheap labor. There is a lot of undeveloped land here. Hope you have some to produce food. That is the most important item right now. I have 8 grandbabies. Hate to see them hungry.

        • I grew up in Greer. I remember all the towns supported by the textiles plants Greer-Victor-Monagen-Parker-etc.

      6. “We have amassed the biggest pile of debt in history”. True statement. People have also contributed to a giant landfill pile of materialistic junk. Vintage and antique items are great. Probably the biggest waste of money is fashion trend clothes. These clothes are trendy today and out of style landfill material tomorrow.

      7. Most parts I have to purchase for customers are Chinese or Mexican origin. Friggin’ depressing. When friends of mine (in my trade) call me and ask me what am I up to, I usually respond, “Workin’ on junk”.

        • Yeah, I hear you on that.

      8. And Just how is the presedental election going to change anything. Too many parasite takers and too few producing makers is not sustainable. No matter who is elected that will not change.

      9. Snyder: The economy is absolutely going to crash by the end of last year, or the year before.

      10. Can ANYONE please tell me what we got for the 10 trillion ObuttHole spent in the last 7 & 1/2 years?

        We have fewer ships now, older airplanes, a smaller Army, and more folks on SNAP cards.

        WHERE DID THE $$$$$$ GO?

        • You can bet it’s in somebody’s pocket. Money doesn’t just evaporate. Whatever anyone has of value there is always a scammer that would like to have it.

        • The dollars are going to the government employees and their retirements.

          • God willing 🙂

        • That money is going to the welfare queens/uneducated voters. Keep them hooked on the freebies and they will keep voting in those who promise more freebies.

          • It’s also going into equipment and legislation geared towards stripping you of what few “liberties” you think you have left.

            • Actually it is them THINKING they will strip my liberties. I may die, but I will die a free man who enjoyed and fought for my freedoms to the end.

        • Seven Trillion of it was all for welfare…

      11. New that politicians have your full attention on the election, the other hand can do something big they don’t want you to see. To answer Seminoles question, we got nothing for all the money they borrowed but higher interest payments and fewer jobs.

      12. Those who lost their job to the Chinese can’t buy manufactured goods, and now the Chinese who took those jobs can’t either.

        I guess the 0.1% will have to needlessly spend ad infinitum, since no one else can afford to…

      13. This is an interesting study in detail that for all intent and purpose says that the more good jobs you export the less wages people possess to buy what is imported. It took people with high education to come to the same conclusion that blue collar HS graduates did when NFTA was being debated.

        The next study will be don’t eat feces.

        h ttp://

      14. We don’t need a manufacturing sector, or a services sector or a middle class, not when you can print an economy, and put everyone on the dole, what could possibly go wrong?

        Debt clock today says $19,090,880,799,021.63

        Any bets on how much the debt will be the day Obama leaves office? We should have a pool, winner gets a case of mountain house #10 cans? I’m thinking 21.5 trillion.

      15. Best way I know of (and always use) is to USE STAMPS-think about how many local humans stay employed each time you use a stamp, The designer of the stamp was an American, the ink and glue and paper were likely made here in America, the stamp catalog was produced and mailed here in America, the stamp was purchased from a local post office and paid lease rent or property taxes locally, and that human who sold it to you had to get to work somehow, either bought gas or took the bus, either way taxes were paid to maintain the roads, they ate lunch or bought groceries somewhere, the letter upon which the stamp was affixed was processed by Americans at the start and finish of the transaction, and the paper was recycled at an American plant. NEVER use e-commerce, always make sure you use stamps, think about it..

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