US Jobless At Record 91.8 Million; Participation Rate Plunges To 1978 Levels + Could 3-D Fabrication Technology Lead to Re-Industrialization?

Submitted by Tyler Durden: Curious why despite the huge miss in payrolls the unemployment rate tumbled from 7.0% to 6.7%? The reason is because in December the civilian labor force did what it usually does in the New Normal: it dropped from 155.3 million to 154.9 million, which means the labor participation rate just dropped to a fresh 35 year low, hitting levels not seen since 1978, at 62.8% down from 63.0%.

And the piece de resistance: Americans not in the labor force exploded higher by 535,000 to a new all time high 91.8 million.


The US jobless, laborless recovery continues to steam on.

Edited by WD

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Could 3-D Fabrication Technology Lead to Re-Industrialization?
3-D fabrication enables massive redundancy of productive capacity but at no loss of flexibility.
By Charles Hugh Smith: I posed this question to longtime correspondent Joe H., who recently retired from a career in the U.S. auto industry: could 3-D fabrication technology lead to a re-Industrialization of the U.S.? Joe's response addresses aspects of industrialization that receive little attention:

"One item to consider is that resilient structures have underloaded "fibers" that can take up load as parallel paths fail. In structure-speak, they are structurally or mathematically indeterminate. 

As such they are not optimum from a mass standpoint. So there is an economic incentive to make structures truss-like....i.e. to minimize underloaded fibers. 

I can make a case for the industrialization of the economy as an elimination of "underloaded fibers." The full-time workers get overworked (to dilute the mandatory fixed costs) and the marginal workers either get dumped or given so few hours that they slide under the fixed costs.

Question: Would you classify re-industrialization via 3D fab machines as the re-introduction of underloaded fibers? 

My initial thoughts: 

Fixed costs are evil. All costs are genetically programmed to become fixed costs. 

3-D fab machines are an elegant way to avoid fixed costs. It is elegant because it addresses the fixed cost footprint with agility instead of starving the Clydesdale (the punchline about a frugal Scot). Dip in. Dip out. Instead of 10,000 square feet, crucibles, 3 pattern makers, 3 machinists, wages, benefits, etc. 

I don't know if the 3-D machines qualify as a commodity like a 2-D printer or a digital camera. But they may be well on the way. 

The other side of the equation is having a large enough base of efficient users or high-level software that makes model creation "intuitive."

Thank you, Joe, for introducing key aspects of re-industrialization. Underloaded fibers can perhaps be understood in terms of redundancy and "slack" in the system: the current global production model places a premium on long supply chains and "fully loaded" single suppliers. This model maximizes single-source manufacturing but at the tradeoff cost of increasing systemic vulnerability to disruption of the supply chain.
3-D fabrication enables massive redundancy of productive capacity but at no loss of flexibility. The fixed-cost footprint of fully loaded, no-slack suppliers is high; that is the tradeoff cost of high-productivity centralized production.
Once 3-D fab equipment becomes a commodity (i.e. low-cost, widely available), the fixed costs of productive capacity decline rapidly. At this point, as Joe observes, the key becomes design/fab software tools that are low-cost and intuitive to use.
Once the digital instructions for fabricating a specific part are online, anyone with access to the web could download the instructions to a networked fab machine.
There are limits, of course, to what parts of an industrial product can be fabricated on a commodity 3-D machine: large-scale steel beams, for example, and multi-layer CPU chips that require many steps and very costly machines (i.e. fabs costing $1+ billion) do not lend themselves to low-costs commodity 3-D fabrication.
Despite these obvious limits, 3-D fab machines open up opportunities for a new model of industrial production, one based on low-cost underloaded, decentralized commodity fabs: redundant, distributed, networked and stripped of fixed costs.

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