Make America Manufacture Again

I think there are common misconceptions at the root of the discussion of the US manufacturing job market. So I wanted to dig a little deeper to shed some light on an often talked about but not researched topic. A lot of the talk is anecdotal so I had some questions:

  1.  With the discussion almost entirely centered around bad trade deals and negotiation…Is trade the biggest factor that explains the declining number of manufacturing jobs in the US?
  1.   If manufacturing is such a vital part of the American economy, how in the heck did nobody think to save it from this slow death? I mean, we’ve lost 5 million manufacturing jobs since 2000!
  1.  Will those jobs ever come back?

My first question was always in the back of my mind when manufacturing jobs came up during the campaign. I would think, “uh doesn’t the technology boom of the 2000s, specifically relating to automation of manufacturing plants, have SOMETHING to do with the loss of jobs?” I found my answer in a research study done by Ball State University and the numbers are staggering. The study states that “almost 88 percent of job losses in manufacturing in recent years can be attributable to productivity growth, and the long-term changes to manufacturing employment are mostly linked to the productivity of American factories.” In short, American factories have gotten vastly more productive since 2000 due in large part to automation. You know, like those fancy automaker commercials you see featuring the six terrifyingly accurate welding robots that put a car together in, like, 45 seconds. From 1998 to 2012, manufacturing as an industry in the United States became 90% more productive. That means you no longer need as many people to run a plant…meaning less jobs. It also means higher profits for those who own the factory, because although I’m sure maintaining automation robots is costly, they don’t need health insurance or any other costs associated with an employee. 

I also found within the research study the reason no one stopped the slow death of our manufacturing; because it didn’t need to be saved. The manufacturing sector grew from 2006-2013 at a pace just behind the rest of the economy: 17.6% vs 19.4%. US Manufacturing is still a viable force within our own economy. It is not sick or dying or whatever else people might say. That isn’t to say everything was rosy for manufacturing during the Great Recession, because it suffered like just about every other sector did. I am saying though that American manufacturing wasn’t especially hit during 2007-2009. It should be noted that President Obama did some good for the manufacturing sector during recovery by way of the auto bailout.

My last question of if those lost jobs are ever coming back has a resounding NO for an answer. These middle class factory jobs that support a nuclear family of four are going the way of the dinosaur. Not only has automation decreased the number of employees a factory needs to run, we’ve priced our labor force out of them. Many manufacturers simply cannot afford to make their lower priced goods here in the United States.

And more broadly, do we want those jobs back? Do you honestly think high tariffs and trade wars with China, Mexico, or [insert random country here] wants in on this royal rumble will help the economy? So what happens when all these manufacturing jobs that were promised up and down the middle of America don’t appear? You can only tout Carrier Air and the 1,400, uh, 800 jobs saved through $7 million in tax incentives given by the state of Indiana so many times before your constituencies start realizing that their lives haven’t changed.

Of course if you are the guy in charge, you have to highlight these small victories if you want to create a narrative of making America great again. I don’t mean “small victories” to by any way  belittle the people who’s jobs will be saved, mind you. I mean “small” as a way to define it in terms of the sector as a whole. The overall trend is towards efficiency and production, not necessarily a larger, pre-2000 workforce.

So when does that happen? Or do you think that the President is going to personally bully enough businesses to keep this going?

These questions will take time to answer but for the sake of the thousands of people he promised jobs to…I hope so.

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