The Economy Of Scale

I am struck by this Elk Grovian who has been broadcasting his availability for work at the Highway 99 interchange and Elk Grove Blvd.


Photo from ElkGroveNews.net

I don't suppose there's a single Elk Grovian who noticed, noticed that the guy walked drove to the local WalMart to buy a pen and posterboard to broadcast his message to passersby. I don't suppose anyone ever put the two together, that cheap imported posterboard and permanent markers are among the reasons this guy can't find work, that there are no manufacturing jobs left in California. I'm pretty sure that if there were a permanent pen factory at that intersection he'd have already applied to drive a forklift, to operate a stamping machine, to do something.

This article was offered by the Sacramento Bee on the same day a regional economy article showed how some 370,000 California jobs were lost to China over the last decade. This is a small percentage of the total workforce, but Tommy is included in that figure, along with Hank, Sahm, Bill, and Terry. Manufacturing comprised 21% of the 1979 economy, while today it's 11% and falling further.

Of course it can be argued that our service and FIRE economy won't support manufacturing and indeed doesn't need to -- that all we have to do is innovate, design, and market those products made elsewhere. Apparently, that's our role in the global economy: to market shit made elsewhere, back to ourselves.

I really should stop arguing this point. U.S. manufacturing is dead, it won't come back, and apparently it shouldn't come back. Let those Asian nations with their lower labor costs handle that work. While they're at it, they can develop their own supply chains, support firms, engineering services, capital investment, and research and development. These things aren't important to the American economy, either. We only have to worry about selling shit to ourselves (10% of our workforce) and managing the finances of the selling of that shit to ourselves (another 10% of our workforce).

Next week will mark the last automobile manufactured in California. Yeah, there might be a one-off electric model produced here or there, but following the NUMMI closure next week we will have lost the last auto plant in the golden state. Let those Asian nations with their lower labor costs handle that work. While they're at it, they can develop their own supply chains like Modesto's Trim Masters, Tracy's Pacific Coast MS Industries, and Stockton's Kyoho Manufacturing, and their own distribution networks like Manteca's Mountain Valley Express. These support firms aren't important to the American economy, either. Let them die. Let them die so that I can save a few hundred bucks on a Corolla, because that's what I want. I want a nice, cheap imported car without having paid Californian laborers to make it. I, the employed consumer, stand to benefit the most, so why wouldn't I applaud this plant closure, huh?

Turn the plant into a Home Depot anchored strip retail power center. The more these things sprout up, the more the economy of scale will benefit me, the employed consumer. The cost of a piece of ABS pipe in Elk Grove will marginally fall as Home Depot pits Asian manufacturers against one another to see who can produce 6 billion linear feet of pipe the cheapest. And if they can sell 7 billion feet by opening more stores and gaining market share, I stand to take advantage of that comparative advantage.

Yep. From here on out I will no longer decry the evisceration of American manufacturing; I will embrace it and encourage it. I will take advantage of the economy of scale that warehoused retail offers, and I will no longer decry the loss of quality and craftsmanship as I'll make up for it with throwaway volume. Hooray for globalization! And hooray for being an employed consumer in the consumer capital of the world!