Don’t tell the U.S. presidential candidates as they campaign through the heartland, because they might come after us. The chief cause for manufacturing job losses in the U.S. is not migration of jobs to low cost countries like China, India, or Mexico. The bogeymen are instead automation professionals like you and me.
The facts are undeniable. Automation is the single biggest destroyer of manufacturing jobs not just in the U.S., but worldwide. And that’s a good thing. It’s called productivity, and making more stuff with fewer people is perhaps the major driver behind improved living standards worldwide over the last few centuries.
U.S. Real Value Added Manufacturing output, a good proxy for stuff made, advanced from about $1.1 to about 1.4 trillion from 1995 to 2002. During that same period, the U.S. lost 2 million manufacturing jobs.
Perhaps these manufacturing jobs are moving to China? No, China lost 15 million manufacturing jobs during that time span. Mexican manufacturing employment also declined, and Indian manufacturing employment was flat at best.
Rather than spending billions on protectionism, nations and their workforces would be better off spending a fraction of those sums re-training low-skilled manufacturing workers displaced by automation. These workers could then become productive members of the service sector, or highly trained automation and machine operations employees in the manufacturing sector.
