The Problem

Over the past year, we’ve seen a rallying cry to bring back blue collar manufacturing jobs to the United States. There have been overarching claims that our jobs are being taken by Central America and Asia. This frustration isn’t unfounded, the United States has lost over 5 million manufacturing jobs in the past ten years as seen below.

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Admittedly, these numbers do raise a cause for concern; however, is it really possible for us to bring back the manufacturing jobs that have been lost? Granted, there are anecdotal signs of a return of this form of labor such as the Carrier deal (which is already under scrutiny). Unfortunately, it is neither wise nor efficient for the PEOTUS to go around striking deals one by one and also it gives people false hope about the return of these blue collars jobs. At the end of the day, manufacturing jobs are disappearing and here’s why.

 

1. Automation

It sounds repetitive, but it’s true. The 21st century has been characterized by rapid growth in technology, technology that is capable of replacing the very jobs that the Rust Belt was built on.  Manufacturing output has continued to increase without the help of increased manufacturing employment. When adjusted for inflation, the economic output from the manufacturing sector is higher than it has ever been. There’s only one possible explanation for this: automation. Nebraska Senator Ben Sasse wrote the other day saying “Automation–even more than trade–will continue to shrink the number of manufacturing jobs. This trend is irreversible.” Senator Sasse raises a good point: we have t0 be real with the American Public in acknowledging that employers don’t need that many people to do the job. Which means no amount of deal making will restore the manufacturing sector.

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2. Jobs Move With The Economy

In economics, all of the jobs in the country can be divided up into three main sectors. There is the primary sector (mining, logging, etc) the secondary sector (production of finished goods) and the tertiary sector (providing services to customers). What most people tend to misunderstand is that losing jobs in the first sector is not necessarily a bad thing, if jobs are gained in the latter two sectors. Ultimately, this is a sign that the economy is developing. The BBC shows below how poorer countries rely more heavily on the primary sector while more economically advanced sectors have shifted towards tertiary.

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So yes, this economic development will lead to structural unemployment but this is a price every developing/developed economy will have to pay at some point. Is it unfortunate? Without a doubt, but jobs are growing domestically and that’s not an easy task to accomplish.

 

The Solution

Senator Sasse was right, there is no real simple political solution. Congress cannot pass a bill and restore all the lost jobs.  We have to prepare Americans for disruption and changes in the workforce through education. Without this, we will continue to see people blame free trade, open markets and immigration for these fragile issues, which could not be farther from the truth.