48.1 F
Fort Worth
Sunday, November 29, 2020
Government The big reason Trump is going to struggle to keep his promise...

The big reason Trump is going to struggle to keep his promise on jobs

Other News

A look at big issues on Supreme Court’s agenda

Some of the issues either already on the Supreme Court's docket when it begins its new session or likely to be before the justices...

Wall Street posts solid gains after surge in corporate deals

By ALEX VEIGA and DAMIAN J. TROISE AP Business Writers Wall Street kicked off the week with a broad rally Monday, clawing back much of...

Tarrant County ranks low in work-from-home study by NAR

North Texas ranks pretty high in the “Work from Home” category, according to a just-released study by the National Association of Realtors. But Tarrant...

Commentary: Universities and COVID-19: Charting turbulent times

Ray Perryman As the COVID-19 pandemic emerged this spring, college campuses across the United States swiftly sent students home in droves and switched to...

Quick, answer this: Does America make stuff anymore?

Anyone who listened during the presidential election may be inclined to think not. Both candidates decried the disappearance of good-paying manufacturing jobs. President-elect Donald Trump garnered votes with his promise to restore America’s manufacturing base to its former glory.

“Under decades of failed leadership, the United States has gone from being the globe’s manufacturing powerhouse – the envy of the world – through a rapid de-industrialization,” Trump wrote in one op-ed. On the campaign trail, he promised to bring back American manufacturing jobs by making sure U.S. trading partners can’t take advantage of us – including slapping a tariff of 45 percent on China, if necessary.

But keeping this promise will be difficult, as Mark Muro, a senior fellow at the Brookings Institution, recently argued. That’s because American workers may be struggling, but American factories are not.

The relationship between factories and workers has changed over the past decades, and it’s unlikely to go back. Over the past 35 years, the United States shed about 7 million manufacturing jobs. And some industries, such as textiles and apparel, have disappeared almost entirely.

Yet American factories actually make more stuff than they ever have, and at a lower cost. Manufacturing accounts for more than a third of U.S. economic output – making it the largest sector of the economy. From that perspective, it’s hard to argue that American manufacturing today is anything but a success.

The issue is that the fortunes of factories themselves and of manufacturing workers have diverged. U.S. factories now manufacture twice as much as they did in 1984, with one-third fewer workers, according to the Federal Reserve.

The reason, of course, is that productivity has risen so sharply. Technology, and automation specifically, allows manufacturers to make more than ever before, at a much lower cost.

The economics are unavoidable and irreversible. Although a human welder may earn $25 an hour, a robot welder costs around $8 an hour over a five-year period, according to estimates from the Boston Consulting Group. The group projects that the cost could fall to as little as $2 an hour within 15 years.

“More generally, the ‘job intensity’ of America’s manufacturing industries – and especially its best-paying advanced ones – is only going to decline,” Muro writes. “In 1980 it took 25 jobs to generate $1 million in manufacturing output in the U.S. Today it takes five jobs.”

Given this reality, bringing back manufacturing to American shores may not be a true solution to restoring good blue-collar jobs.

Economist Gordon Hanson, who has studied the impact of Chinese imports on the U.S. economy, has suggested that imposing a 45 percent tariff on Chinese imports, as Trump has suggested he may do, may actually benefit factory owners and their investors more than workers. A tariff would encourage American consumers to buy more American-made goods. That would substantially increase business for owners and investors with factories in the United States, but it may not translate into that many jobs, since factories could invest in automation to produce more at home, rather than workers.

The problem is easy to identify; the solution is much harder. Some economists have argued for policies that do more to redistribute wealth to workers who have moved into the service sector, such as minimum-wage laws or a universal basic income. Hanson has suggested giving laid-off workers an immediate lump-sum payment, rather than periodic payments for retraining, to encourage them to find work quickly.

Muro argues for investing in manufacturing innovation and relevant training to make sure workers are prepared for 21st-century manufacturing jobs.


Oh hi there 👋
It’s nice to meet you.

Sign up to receive awesome content in your inbox.

We don’t spam! Read our privacy policy for more info.

Latest News

JRB Fort Worth chosen for main operating base for C-130J aircraft

Naval Air Station Joint Reserve Base Fort Worth has been selected as a main operating base for eight C-130J aircraft at the 136th Airlift...

Holiday trends to watch: Adult Play-Doh; stores that ship

NEW YORK (AP) — The pandemic is turning this into a holiday shopping season like no other. Toy companies are targeting stuck-at-home grown-ups with latte-smelling...

Tarrant County DA’s office changing how it handles misdemeanor marijuna cases

The Tarrant County Criminal District Attorney’s Office is changing how it handles misdemeanor marijuana cases. The Tarrant County  Criminal District Attorney’s Office on Monday, Nov....

Arlington selects new police chief from Baltimore department

Col. Al Jones, a 25-year veteran of the Baltimore County Police Department, has been appointed the new police chief of the the City of...

Left for dead, twice, RadioShack gets another shot online

SILVER SPRING, Md. (AP) — RadioShack, a fixture at the mall for decades, has been pulled from brink of death, again. It’s the most prized...