Job losses from automation or trade pacts? Will we learn from this?

[KPN]

A simple request: please don't turn this into something it is not by making this about supporting our fake pResident.

The Epic Mistake about Manufacturing that's Cost Americans Millions of Jobs

America’s manufacturing sector is in far worse shape than the media, politicians, and even most academics realize. Manufacturers’ embrace of automation was supposedly a good thing. Sure, some factory workers lost their jobs. But increased productivity boosted living standards, and as manufacturing work vanished, new jobs in construction and other services took its place. This was more of a shift than a loss, explained Bradford DeLong, economics professor at the University of California, Berkeley.

Thanks to a painstaking analysis by a handful of economists, it’s become clear that the data that underpin the dominant narrative—or more precisely, the way most economists interpreted the data—were way off-base. Foreign competition, not automation, was behind the stunning loss in factory jobs. And that means America’s manufacturing sector is in far worse shape than the media, politicians, and even most academics realize.

In the four decades between 1960 and 2000, US manufacturing employment was basically stable, averaging around 17.5 million jobs. Even during the 1980s and 1990s, as Korea and other smaller Asian nations joined the ranks of Germany and Japan to threaten the dominance of US factories, the absolute number of manufacturing workers stayed mostly flat.

Between 2000 and 2010, manufacturing employment plummeted by more than a third. Nearly 6 million American factory workers lost their jobs. The drop was unprecedented—worse than any decade in US manufacturing history. Even during the Great Depression, factory jobs shrunk by only 31%, according to a Information Technology & Innovation Foundation report. ... How, then, do you reconcile the epic employment slump of the 2000s with the steady rise in output? The obvious conclusion is that factories needed fewer people than they did in the past because robots are now doing more and more of the producing. That’s tough for factory workers, but US manufacturing is doing fine. That rests on the basic assumption that the manufacturing output data reflect the actual volume of stuff produced by US factories. It’s a reasonable assumption to make. Unfortunately, it’s not an accurate one.

Two decades of ill-founded policymaking radically restructured the US economy, and reshuffled the social order too. The America that resulted is more unequal and more polarized than it’s been in decades, if not nearly a century. ... In effect, US policymakers put diplomacy before industrial development at home, offering the massive American consumer market as a carrot to encourage other countries to open up their economies to multinational investment. Then, thanks to the popular narrative that automation was responsible for job losses in manufacturing, American leaders tended to dismiss the threat of foreign competition to a thriving manufacturing industry and minimize its importance to the overall health of the US economy.

https://www.msn.com/en-us/money/markets/the-epic-mistake-about-manufacturing-thats-cost-americans-millions-of-jobs/ar-AAwGZsq?li=BBnbfcN

[MichMan]

1. The two are linked

With foreign competition being able to take advantage of lower labor costs and reduced environmental standards, automation is necessary by American manufacturers to off set those factors

[Crutchez_CuiBono]

2. At some point the profit at any cost

system has to be addressed. Unions need to take back what's been taken. This country has a social pact with all of us. Not just the folks w sharp elbows who want to be rich....right now. We need a cure for greed.

[MichMan]

3. Wouldn't that cause even more automation or production moved overseas?

Unions can be powerful in jobs that can't be easily moved overseas. In many manufacturing plants that isn't the case.

I have worked for auto suppliers for much of my life. There are a lot of suppliers in Mexico and China that we compete with business. profit margins are already quite low. Customers demand price decreases regularly.

Increasing costs of manufacturing will either require much more automation or would result in plant closures as selling parts for less than it costs to make them is not good business.

[Crutchez_CuiBono]

4. So whats the answer?

If workers can't defend themselves, who will? Always this answer...don't do that bc it will make it worse etc. Never ends.

[MichMan]

5. Embrace automation

It isn't going away. People with skills in designing, building, repairing, programming, and maintaining automation will be in very high demand with good wages.

[Crutchez_CuiBono]

6. yeah..

No. I'm not embracing anything like that. We have smart college kids graduating and can easily handle that but factories were where folks w GEDs went if they wanted to and still, through hard work, had a middle class American life. The American Dream. Just bc you have a quick cut out answer doesn't mean that adaptation is just as easy as what you said. America belongs to all of us. It's our birthright and not something that can be parsed out by a few percent of the population that are so greedy they 'seemingly' can't help themselves. People want to work. Automation is for the birds. Personally thats how I feel and it's not a debateable question beyond what I've said. Automation does NOT have to happen. Funny how Chinas middleclass growth is known and understood and accepted by industrialists. Those were our jobs. And greedy Americans sold them overseas bc they could. We made those things here and had established enough regulations to do it much cleaner than China. But somehow now, it's the American worker that has to over come more obstacles to get yet another set of jobs, that if automation is allowed to happen, will happen to your job too. We live in a society. It's not every man for himself. That's why we have government and basic rules. Legal and economic. The economic rule of' faster bigger' profits are possible doesn't mean that's what's good for American citizens. Corp law needs reform badly.
Meanwhile dt doubles visas for skilled workers bc they "can't find any here." Always a quick answer from corporate America and those who are it's undying apologists.
People need jobs now...not after going to yet more college based training. People already dont go to college bc it's unreasonable economically, or they just choose not to. that's their right. The American worker doesn't have to exhaustively keep adapting to run away ideas from Corp America, bc it's the shareholder argument of the day. Good grief.

[MichMan]

7. Apparently you have little understanding of manufacturing

You wish for a time when all labor was manual and could be performed by unskilled workers making high wages.

What do you mean if automation is allowed to happen? Automation has been going on since the industrial revolution. Tractors improved farming yields over plow horses, computers replaced typewriters, slide rules and adding machines, backhoes replaced armies of laborers with shovels. Would you be in favor of eliminating those advances and going back to older times? A luddite?

Do you really expect Tesla to manufacture cars like Henry Ford did with the Model T (Which itself was highly automated compared to others carmakers back then) Of course not.

I have worked for auto suppliers my entire life. It is a cut throat industry with low profit margins. Customers demand lower and lower prices and we are competing against suppliers in Mexico and China, so it isn't an option to just raise prices. It is actually worse than that; our customers demand price cuts every year on parts. If we do raise prices, say goodbye to any new business and the plant will close, putting a couple hundred employees in a small town out of work.

Automation in specific areas of the plant may very well be the only way to keep the doors open and ensure the employees can pay their mortgages and provide for thier families.

[KPN]

8. Automation is not responsible for the vast

majority of job losses over the past 2-3 decades. Embracing automation will not replace jobs that have been lost to cheap labor nations.

[MichMan]

9. How would you reverse it? Tariffs? Ban trade ?

[KPN]

10. First, it should never have happened. It was about corporate America and complicit

politicians following greed impulses that resulted in poor public policy choices. Second, while we can't just flick a switch and reverse the consequences of past policy choices, we can at least take steps to stem the tide.

With that as backdrop, I would say yes, utilize tariffs if necessary, but focus overall on renegotiating existing trade agreements to convert them to fair as opposed to free trade agreements. By that I mean include protections within the trade pacts for American workers (as well as worker rights in party nations) and the environment globally. Fair trade means having similar environmental protections/regulations in place for the party nations. It means having similar cost-of-living wages, benefits and rights. Without those, there is no fair trade, rather it's corporations taking advantage of cheap labor and a cheap manufacturing regulatory environment. If it takes tariffs to leverage fair trade stipulations, then YES, by all means.

Other measures:

Create an inverse link between off-shore corporate tax rates and labor/environmental regulatory costs as opposed to a one standard fits all tax formula;

Return to genuine progressive taxation -- 1) given the rise in inequality associated with off-shoring production, tax the wealthy at a much higher rate to fund public programs that benefit the working class (health care, education including early child care, investment in public infrastructure and services, and green energy development; etc.) that ultimately create jobs and a competent/skilled workforce to perform them; 2) provide tax cuts for the middle/working class to increase consumer demand for non-luxury manufactured goods; 3) greater tax cuts for true small businesses to incentivize smaller business starts and create/stabilize small business jobs (by true small businesses I mean significantly less than 500 employees as "small business" is now defined). Keep in mind, it makes good sense to tax those who benefited most by off-shoring (and actually deregulation as well) at a significantly higher rate.

Provide greater incentives for "buy American" to businesses, corporations and tax payers via a consumption tax credit; strengthen commitment to "buy American" by the federal, state and local governments;

... to name a few things we could do.