It’s the Jobs, Stupid
Automation limits any president’s ability to
significantly boost factory employment.
Pundits will debate the wellsprings of
Donald Trump’s election triumph for
years. Many journalists are stressing racial
resentments and xenophobia, and while
such explanations can’t be dismissed,
there’s another issue that should be high
on the list: the decades-long decline of
U.S. manufacturing employment and the
highly automated nature of the sector’s
The collapse of labor-intensive commodity manufacturing in recent decades
and the expansion in this decade of super-productive advanced manufacturing have
left millions of working-class people feeling abandoned, irrelevant, and angry.
That rage helped get Trump elected. But
the automated nature of advanced manufacturing means the president-elect won’t
be able to make America great again by
bringing back production jobs.
The trends show a massive 30-year
decline of employment beginning in 1980
that led to the liquidation of more than
a third of U.S. jobs in manufacturing.
Employment in the sector plunged from
18. 9 million jobs to 12. 2 million.
Much of the dislocation was concentrated in Midwestern and other Rust Belt
states. This visited widespread havoc on
blue-collar workers in manufacturing-oriented areas. Since 2000 alone, millions of workers have lost manufacturing
jobs paying $25 per hour plus health and
retirement benefits. Often the only alternatives were service-sector jobs without
benefits paying $12 an hour.
As a consequence, there’s been a
sharp increase in political polarization in
affected congressional districts—as dem-
onstrated recently by MIT economist
many measures in recent years, making
Trump’s promises seem like false dreams.
In fact, the total inflation-adjusted
output of the U.S. manufacturing sector
is higher than ever. That’s true even as
the sector’s employment is growing only
slowly, and remains near the lowest it’s
ever been. These diverging lines—a result
of improved productivity—highlight a
huge problem with Trump’s claims. Amer-
ica is already producing a lot. And in any
event, the return of more manufacturing
won’t bring back many jobs, because the
labor is increasingly being done by robots.
Boston Consulting Group reports that
it costs barely $8 an hour to use a robot
for spot welding in the auto industry. A
human doing the same job costs $25 an
hour—and the gap is only going to widen.
The “job intensity” of America’s manufacturing industries is only going to decline.
In 1980 it took 25 jobs to generate $1
million in manufacturing output in the
U.S. Today it takes five jobs. The hyper-efficient shop floors of modern manufacturing won’t give Trump much room to
deliver on his promises.
So what’s a more viable response to
the plight of displaced workers? One
response must be a forward-looking
vision of what manufacturing has become
(high tech, automated) to enhance American competitiveness. This means invest-ing in manufacturing innovation to keep
U.S. factories in the lead; ensuring that
workers get industry-relevant training
that equips them for today’s digital factories; and supporting the nation’s regional
clusters of advanced industry, whether in
Grand Rapids or Pittsburgh.
Yet no one should be under the illu-
sion that millions of manufacturing jobs
are coming back to America. Those who
would help displaced workers need to
think much more urgently about how to
provide for what policymakers euphemis-
tically call “adjustment” for the victims of
economic shocks like deindustrialization. AN
David Autor and his coauthors in a study
of locations exposed to low-cost Chinese
imports. There’s a direct line between the
loss of manufacturing jobs in those areas
and Trump’s election in November.
Manufacturing employment has in
fact ticked up since 2010, reflecting the
post-crisis auto boom and the relative
strength of the nation’s advanced manu-
facturing industries. But that hasn’t mol-
lified angry displaced workers. While it’s
encouraging for American competitive-
ness and some local clusters, the new
growth has been too little, too late.
Trump has promised to bring back
millions of jobs by renegotiating NAFTA,
rejecting the Trans-Pacific Partnership,
and slapping China with tariffs. But U.S.
manufacturing has been succeeding by
Four writers take on Trump and technology