Manufacturing Declines and Trump’s Ascent

image via Creative Commons

 

by Elizabeth Fournier

As Trump settles into the presidency, the economy is doing far better than it was when President Obama took office. Since 2008, the unemployment rate has been cut almost in half, stocks are near record highs, and we have witnessed 75 straight months of job creation. However, slow wage growth and low worker productivity detract from Obama’s economic legacy.  In order to understand the economy under Obama, and Trump’s role in shaping our economic future, we need to look more closely at the manufacturing sector.

It’s not immediately clear why, but the manufacturing industry suffered during Obama’s presidency; 1.4 million manufacturing jobs were lost between 2007 and 2014. Increased imports from countries like China certainly have played a role in the decline of manufacturing jobs, and may be accountable for up to a quarter of jobs lost. Trump himself has accused China of taking US jobs multiple times, including during the first presidential debate. However, China, along with the UK, Australia, and Germany have all seen manufacturing jobs decline since 1971, which implies that there may be global structural issues at play.

The primary cause of the decline in factory jobs is technological advancement. As factories have become increasingly automated, fewer and fewer workers are needed, since robots can do a better job at lower costs. Boston Consulting Group reported that it costs under $8 an hour to use a robot to for tasks like spot welding, whereas it may cost $25 per hour for a worker. US manufacturers are looking to remain price-competitive however they can, and replacing low-skilled workers with high performing robots is one cost-effective way to do so.

Manufacturing employment has actually improved slightly since 2013, due to the post-financial crisis auto boom and the strength of American advanced manufacturing. However, over the past few decades, the trend is clear: more than one-third of US manufacturing jobs have been eliminated since 1980. Our economy has instead become increasingly service-focused, with more than 80% of all private jobs now within the service sector. The service sector includes industries like retail, transportation, financial services, education, healthcare, and leisure, among others.

Despite their decline, we should not underestimate the importance of manufacturing jobs in the United States. They have filled an important niche in the US economy for decades, because they pay well without necessarily requiring a college degree. The average factory worker earns more than $25 an hour, whereas the average retail worker earns $18 or less. Working class communities in the Midwest and the Rust Belt relied heavily on manufacturing jobs, and were crushed by loss of such work.

It is certainly valid for those who have lost their jobs to be angry. Their anger likely helped to Trump to victory, as evidenced by high levels of turnout for Trump in manufacturing-based communities. His rhetoric made sense to people; for the first time, they felt as though a politician was actually recognizing their struggles. Unlike the rehearsed, aloof politicians they had seen in the past, Trump was informal, candid, and effectively communicated the message that he cared and was going to get people’s jobs back.

Trump practice of blaming the loss of US manufacturing jobs on other countries, like China, may have fueled popular support for other nationalist and anti-globalization policies, particularly when it comes to immigration and trade. Those who lost their jobs heard Trump claim that “illegal immigrants” were taking them, and that the Chinese were using the US a “piggy bank” to rebuild their economy. They also heard Bernie Sanders during the presidential primaries, criticizing globalization and “disastrous” trade agreements that put American workers in competition with low-wage workers in other countries. They listened to Trump when he said, if elected, he’d put tariffs on Chinese exports, strictly enforce our immigration laws, and prioritize the jobs and wages of the American people. They believed those changes would improve their lives, and now they expect results.

Going forward, we need to make more of an effort to acknowledge the struggles of Americans who have lost their jobs in the manufacturing sector, and address the void of unskilled jobs in our country. Even if the way in which Trump addressed these concerns was immoral, we must resist the urge to dismiss them out of hand. It is a mistake to conclude that because Trump’s mode of addressing such concerns was racist, sexist, and xenophobic, the worries themselves are irrelevant. For the 1.4 million manufacturing workers who have lost their jobs, it is legitimate to want a change. Though this frustration has manifested itself in ways we may not agree with, it is impossible to come up with a solution if we dismiss the problem entirely.

That said, it is also immoral for our politicians to scapegoat certain groups, like immigrants or the Chinese, while taking advantage of other vulnerable groups, like the working class who have lost their jobs, in order to achieve some political goal. All of our politicians have a moral duty not to fuel intolerance or hatred for personal gain – especially our presidents. As the leader of one of the world’s most powerful nations, Trump’s influence on the attitudes, opinions, and beliefs of others is immense. Instead of using this influence to blame China or immigrants for the loss of US jobs, Trump’s focus should be on how to fill the vacancy that manufacturing jobs have left behind, and how to deal with the structural challenges that come with the automation of US industries in the future.

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