Factory Temping America Into "Productivity"
The president touts how productive American workers are, but are they? Jordan Weissman writes in The Atlantic, quoting a Brookings Institute report:
Not only has the use of outsourcing inflated manufacturers productivity statistics, it argues, but so has the practice of hiring "temporary help" services to staff factories. That's right: Just like your office can hire a temp to handle filing, so too can Caterpillar hire a temp to man their assembly lines. But because employees from temp services aren't counted as "manufacturing workers" in official data, factories appear to be using less human labor than they really are.
via @Richard_Florida
Y'mean like Steve Jobs?
Crid [CridComment at gmail] at February 23, 2012 7:00 AM
While I'd rather see people getting full-time jobs with benefits and all that good stuff, I've been a temp myself, and the money sure came in handy! All told, it's better than no job at all.
DorianTB at February 23, 2012 7:05 AM
Don't a large portion of the gains in manufacturing productivity come from automation? When you replace people with machines and make the same – or more – widgets, productivity goes up.
Christopher at February 23, 2012 7:42 AM
Full-time jobs with government-mandated minimal benefits (minimum wage laws, workers' comp coverage, unemployment coverage) interfere with my business's profits and cost us nearly ten dollars an hour per worker, plus all the paperwork filing. Paying a temp agency relieves my business from paperwork, but the agency seeks to profit by charging us more than I'd pay doing the paperwork in house. I've got a clerk who costs me nearly fourteen dollars an hour, part-time, to run payroll and filings, and that seems the way to go.
Andre Friedmann at February 23, 2012 7:47 AM
Amy Alkon
http://www.advicegoddess.com/archives/2012/02/23/factory_temping.html#comment-2996091">comment from Andre FriedmannThe question isn't what makes sense in business -- temp workers or those you have on staff -- but whether the statistics on how well American business is doing are inflated.
Amy Alkon at February 23, 2012 8:42 AM
If the value-added number is being computed correctly, they should *already* be subtracting the costs of important parts/components and the fees paid for temporary workers.
There seems to be a lot of confusion/disagreement among economists on this issue...I'm going to dig into it and see what I can figure out.
david foster at February 23, 2012 8:50 AM
What Christopher said.
Manufacturing output has only been going up for decades, because of productivity increases.
Real increases, involving automation.
(I'm sure the temp issue makes them look even more efficient than they really are - but nevertheless real efficiency by all accounts is up, and has been for years.
Nothing to do with President Obama, nor President Bush, nor President Clinton or any other damned President.)
Sigivald at February 23, 2012 10:41 AM
I've worked in a few factories (currently as a temp worker) and have found that the robotic advancements have really not added that much to efficiency. While labor costs increase, so does the price of energy to operate that automation. Also, they tend to be difficult to keep in operation, breaking down, putting production out of commission for days. Then, the cost to employ technicians to operate/maintain/fix those robotics is much more expensive per hour, depleting the labor savings...it's not cost effective to employ half the amount of employees if you have to pay them three times as much. Then, to top it all off, a simple programming error can produce thousands of mistakes much faster than a human can before quality catches it.
The wage gap between China, India, etc., and the U.S. will slowly decrease as their civilizations develop. Their current greed and poor customer service is already sending many call centers back to the U.S. and I see this trend continuing into manufacturing. However, their return to the US is not likely...as they are filled with natural resources with a government that cares more about its economic growth rather than Mother Nature.
I figure the switch to temp services from the traditional human resources in-house is actually more efficient for larger companies. My current company hires all employees directly from its temp. staff, and is able to handle it's human resource needs (about 200 employees or so) with one employee.
It's all in how the numbers are figured. I'm sure my temporary labor costs are included during tax deduction time, and I don't understand why they wouldn't be included in production costs.
No matter how they figure them, the numbers are going to be skewed like this during a recession. Productivity goes up when people are terrified of loosing their jobs.
Cat at February 23, 2012 4:44 PM
Cat, I beg to differ with many of your points about automation.
I attended the Performance Racing Industry trade show in Orlando three months ago, and not only are engine parts not made by hand at all, most interior parts and paint is entirely robotic. Not only that, Asea Brown Boveri was advertising lower-cost production robotics that would let you set up for $$ in the low six figures. An "ink-jet" paint booth was a big hit, and so was the laser dimensional mapper... that could see colors. If you walked into the show with a plan and cash, you could leave with any machine you could imagine, not just a car. This would boggle the mind of someone who just knows where to put the gas, air and oil in.
One of the coolest things about the show is that the computers are shown to be doing what the artists of engine building have known for years (extra points if you know who Sonny Bryant, Nick Arias, Don Garlits and Robert Yates are). These guys welcome the precision and repeatability of automation because it lets them determine what to do next - how to advance their work.
Yes, you can say, "Gee, of course, they're selling robots there," but that's not the point of the exhibitors. They know they have to produce a final product that really works.
Now, take a good look at anything around your house. How much of that do you imagine is made by hand?
Dr. W. Edwards Deming proved to the Japanese, and then later to Ford Motor Co. that managers in charge of process controls could only advance their product by eliminating process errors. Here's how. This has come to mean getting people out of the final stages of manufacturing.
You're not making a lot of anything without automation, and "a lot of something" is in the very definition of productivity.
The majority of us do not work in the fields any more, and that changed what we have to do to get by. That's still changing.
Radwaste at February 23, 2012 5:32 PM
What Raddy said. Back in 1970 there were lots of factories that employed 2000 people, and factories employing 4000 or more weren't that uncommon. Don't see much of that anymore. A big multimillion-dollar Toyota engine plant here employs 150. A lot of semiconductor manufacturing is literally "lights out" -- the machines run in the dark; there's no point in having the lights on since nobody is there.
Raddy touched on two of the three big factors in improving factory productivity over the past four decades: (1) automation, and (2) improved practices and processes. (3) is the decline in unionization.
Cousin Dave at February 23, 2012 5:52 PM
I don't know if you realize this or not, but it's not all that long before you'll be asking Siri for a car and having (her) deliver it to your house.
Radwaste at February 24, 2012 3:26 PM
Leave a comment