This is the problem but you have the motive wrong. It wasn't intentionally destroyed, it was a complete lack of concern about whether or not it was destroyed.
You have, on the one hand, unions and others who lobby for more regulations. They have perverse incentives. If they get a new regulation that increases US manufacturing costs by 2%, they get credit for protecting workers. But they don't get credit for regulations passed in the 1970s, so they're always asking for more, so the cost of US manufacturing is always going up.
Manufacturing companies would have the incentive to counterbalance this by lobbying against them, if they didn't have the alternative to offshore manufacturing to countries without this. But they do, so they do that instead.
So regulations that can't pass a cost benefit analysis, or that no longer make sense because things have changed or we know more now than we did then, are still on the books and have no obvious path to being removed.
Politicians have no incentive to fix this because their incentives are to make the lobbyists happy. The unions are happy that they get to take credit for passing more regulations all the time and the corporations are happy that they get to avoid all the regulations by manufacturing in other countries, so who is the lobby to fix it?
China arguable has better protection when it comes to mandatory severence pay and most workers don't work by the hours, or depend on the tips to survive. On the other hand, China don't have hyper-active unions, overtime limits are not strictly enforced. However, I remember reading a piece about a janitor in San Francisco who worked so many hours he's getting paid more than a regular programmer. So when it comes to that, regulations can't do much when someone's determined to get that overtime .
The core thing is, however, a lot more Chinese workers are willing to work that overtime and get that extra pay without complains, and the cost of living is simply way lower.
For an outsider, $15 per hour in the bay may seem high, but even if you work the full hours, you can save very little after housing and food. However, those workers in China are housed, fed, and they get to save all that they get.
The US has mandatory unemployment insurance which serves the same purpose, and none of the jobs that get paid in tips are in manufacturing.
Also, waitstaff in the US in practice generally get paid more than minimum wage, because the ones whose service is so poor they can't get more than that in tips will quit and take a job where tips aren't part of the compensation.
> The core thing is, however, a lot more Chinese workers are willing to work that overtime and get that extra pay without complains, and the cost of living is simply way lower.
The cost of living, especially the cost of housing, is certainly a major factor. But that's still a regulatory failure, because in that case the cause is zoning regulations.
There are tons of US PhDs working in manufacturing. Most of the interesting and high-leverage problems in manufacturing are in Chemical/Biochemical Engineering, Robotics, Controls, ...
When it comes to "stuff phds do in the manufacturing sector", the US is still a leader.
> The west self-harm is contradicting itself by allowing both heavy labor-regulations in their own countries and trade with countries with basically no labor-regulations.
This is accurate. If you want manufacturing capacity in the US, the correct thing to do is to raise the bar globally. Want to import? Great. Meet a minimum standard of labor and environmental regulations, perhaps different than the US labor regs, and even possibly lower in some dimensions, but qualitatively similar.
Of course, this is far easier said than done.
> It's just like they hate their own low skill workers so much that the politicians intentionally destroyed the factory job market.
WRT environmental regulations, it's much easier to turn a blind eye to something happening half-way around the world than something happening in your own town. Especially when that "something" is "Pittsburgh's skies blacker than night at noon due to cancerous smog".
WRT labor regulations & cost, you seem to claiming that the workers rights movement hated workers? Again, it's easy to say "make jobs safer and pay people more". It's much harder to so "and also we're going to accept permanent double-digit inflation."
I think, instead of malice, we can attribute the US's current situation to the fact that policies which make manufacturing more expensive are largely popular even among manufacturing laborers and policies which make imported goods more expensive are (a) horrendously difficult to "get right" and (b) largely unpopular.
I don't think they want to put more PhDs in manufacturing. They want to produce less PhDs.
What they want to copy from Germany is its Apprenticeship.
Super short term thinking.
The west self-harm is contradicting itself by allowing both heavy labor-regulations in their own countries and trade with countries with basically no labor-regulations. It's just like they hate their own low skill workers so much that the politicians intentionally destroyed the factory job market.