President Trump’s announcement that he was abandoning the Trans-Pacific Partnership will surely be looked at by some as a win for the manufacturing industry and workers. Election rhetoric brought the loss of manufacturing jobs to the forefront of any economic discussion. If you’re to believe what you hear, the United States has been hemorrhaging manufacturing and losing out to other countries, namely China and Mexico, in this industry. Trump’s own campaign website claimed that we’ve lost one-third of our manufacturing jobs since NAFTA and 50,000 jobs since China joined the World Trade Organization, citing research from a 2007 Economic Policy Institute study. One would think it’s clear that the trade policies used by the United States contribute directly to strengthening the manufacturing sectors of other countries while our middle class disappears. However, the actual reason why these jobs are disappearing is much harder to paint as an economic enemy.
While production levels have reached new highs, the number of workers employed by this industry has continued to decrease, and the reasons are fairly clear. The average salary for the cheapest factory employees, non-unionized assembly line workers, is $12 an hour. The alternative for many manufacturing companies has been to implement automation, effectively employing robots that do not unionize, do not need benefits, and cost around $8 an hour to operate. It’s easy to see why automation accounts for nearly 85% of the over 5.5 million jobs lost between 2000 and 2010, and only 13% of job losses can be attributed to trade.
Discussion over manufacturing job losses rarely, if ever, centers on a Terminator-like narrative of man versus machine. For a politician to stand and speak about losing 85% of manufacturing jobs to robots would sound ludicrous to most voters, even if it is the truth. It also doesn’t progress any “tougher” trade policies that President Trump loves to promote. If we were to admit that our technological achievements were our working class’s worst enemy, the narrative would have to shift from imposing tariffs and denying freer global trade to looking within our own borders at failings in our own system. Admitting our failings in supporting the working class is a far more difficult thing to do than to place the blame on other countries.
Even if manufacturing jobs were lost largely because of trade, rejecting free trade and bringing millions of manufacturing jobs back would not necessarily grow our middle class and provide the “good” jobs that used to be in the industry. Right-to-work laws, most prevalent in the South but growing even in previous union bastions like Michigan and Wisconsin, have decreased the power of unions, and union membership was what made these jobs solid economic opportunities. Bureau of Labor Statistics show that from 1983 to 2015, the union membership rate in the United States went from 20.1 percent to 11.1 percent. Further BLS data data shows that in 2015, union workers’ median weekly earnings were $980, versus $776 for nonunion workers. The more power that unions lose, the less these manufacturing jobs would be able to support, if it was even possible for them to come back. The United Auto Workers had to negotiate a two-tier pay system in 2007, lowering average worker salaries from $28 an hour to $14. Another important place for unions is providing better wages when identity is taken into account. While many think of factory workers as white and male, the union difference among race and gender is even more apparent: black union workers’ median weekly earnings are $800 to nonunion $617, and union women earn $928 to a nonunion figure of $697. While union employers must work to raise the wages of women and minorities, they’re clearly doing better than nonunion employers.
With the rise of automation and the decrease in unionization, the question arises of how we are going to rebuild our manufacturing sector, and with it our middle class. The hard truth is that unless we start to discuss automation replacing humans, we aren’t going to rebuild manufacturing. While some say that providing a universal basic income will be a necessity when peak automation is reached and workers are hardly necessary, that isn’t an idea that would be popular among our lawmakers or the general public. Even if automation was not the issue, it’s becoming clearer that if manufacturing jobs came back they wouldn’t be what they once were: an opportunity for a fair paycheck with good benefits that allowed a middle class lifestyle. The United States needs to take stock of what industries will expand to allow new jobs in this new post-manufacturing economy, and invest heavily in training and education for regions that were once home to factories. These people didn’t lose their jobs to China, but rather were made obsolete in the workforce by technology. It wouldn’t be a popular talking point on the campaign trail, but what it comes down to is that these people lack the skills needed to afford them a decent life without manufacturing. We owe all of these workers this opportunity. Lacking skills and education wasn’t an issue when the factory in town was paying $28 an hour to start, but this is no longer the reality of our economy. If we want to grow our middle class and get people working again, we need to admit that manufacturing is not going to do it.