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Robots - not trade deals - killed factory jobs, despite what Trump says

Donald Trump’s critics fear he will turn back the clock, while backers fervently hope he can. But when it comes to one of his key campaign promises – bringing back manufacturing jobs lost to other countries – they are both missing the point.

Factory workers worried about their jobs as they rack up holiday bills should forget the question of whether other nations will magically rewrite trade deals to give the U.S. whatever it wants.

The more fundamental problem is this: Off-shoring is not the primary culprit in job loss.

A study by Ball State University’s Michael Hicks found that 88 percent of manufacturing job losses can be traced not to plants moving to Mexico or China, but to robots moving into U.S. factories. As the BBC put it when interviewing Hicks, "Automation has stolen the jobs, it seems, not the Mexicans."

In his study "The Myth and the Reality of Manufacturing in America," Hicks – director of Ball State’s Center for Business and Economic Research – noted that while the value of U.S. manufactured goods has grown steadily despite recessions and trade pacts, "employment has largely stagnated."

Looking at 2000 to 2010, which encompassed "the largest decline in manufacturing employment in U.S. history," Hicks concluded that turning out the 2010 level of goods at 2000 productivity levels would have required 20.9 million workers – not the relatively paltry 12.1 million actually employed,

In just the transportation and motor vehicles sector, productivity gains accounted for nearly 86 percent of the 716,500 job losses, a finding that should resonate here, where "flying robots" glide along sky beams in GM’s Tonawanda plant. While "productivity" can include improvements beyond automation, Hicks – in a phone interview – said the two terms are to some degree synonymous when looking at what has happened to jobs.

At the Tonawanda plant, both union and management deem robots a boon rather than a threat. Plant manager Steve Finch said humans have to install, program and maintain the robots, so "it doesn’t mean that because I’ve put a robot in there that I’ve gotten rid of all the jobs." Humans also innovate and improve, he said, adding that operations like assembly now have more workers than in the recent past while automation is targeted only to certain jobs with ergonomic or other challenges.

How many humans would be doing those jobs if the robots weren’t? Finch said it’s impossible to say without analyzing each individual job.

But if Hicks and others – like the Boston Consulting Group, which predicts a "robotics takeoff" because of dropping costs and improved performance – are right, trade critics like Trump and Bernie Sanders are railing at ghosts to try to save U.S. jobs.

Still, the robots do revive questions about an economic system in which progress creates crisis. Hicks, however, said such fears go back to 19th century economist David Ricardo, who wrote about "technological unemployment" when the steam loom displaced weavers. What nobody counted on, he said, was that workers would then want more shirts, thus stimulating the economy.

The key now, experts say, is to prepare students for the complex human tasks left as machines proliferate. That makes more sense than scapegoating the Chinese or Mexicans, when the robots are right here at home.

 

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