
Is Automation Really to Blame for Lost Manufacturing Jobs? - jeffreyrogers
https://www.foreignaffairs.com/articles/2018-09-07/automation-really-blame-lost-manufacturing-jobs
======
Animats
Actual paper from that author.[1] From 2016.

Her real point is that the electronics industry is doing great, while some
other parts of of US manufacturing are not. Fig. 2 is useful. Textiles,
apparel, furniture, and paper products are the big losers. The apparel
industry was totally crushed by imports from low-wage areas. That took out the
US textile industry, since exporting textiles to be made into apparel and re-
imported was pointless.

US motor vehicle output is up, not down. That hasn't been crushed by imports.

Primary metals (which is mostly steel and aluminum) are up.

More breakdown of the computers and electronics sector would help. We'd
probably see semiconductors through the roof and consumer electronics down.
That data is available.

This is useful. Trade is an industry-specific problem. The American apparel
industry is mostly gone, but we have cheap clothing. The metals industry
complains but isn't in real trouble. Motor vehicles are doing OK. A breakdown
of consumer goods by category would help. That would show where to apply
tariffs.

Paper products are down because newspapers are obsolete, and they used vast
amounts of paper, and because offices use far less paper. Not import-related.

[1] [https://upjohn.org/sites/default/files/pdf/state-of-
american...](https://upjohn.org/sites/default/files/pdf/state-of-american-
mfg.pdf)

~~~
philipkglass
Another thing to consider, when pondering counterfactuals to free trade:
offshoring destinations are _also_ automating. China is now the largest market
for industrial robots:

[https://www.cnbc.com/2017/10/26/china-is-the-largest-
market-...](https://www.cnbc.com/2017/10/26/china-is-the-largest-market-for-
robots-in-the-world-right-now-abb-ceo.html)

Maybe when the local factory shut down in years past it transferred 500 jobs
straight to China. That doesn't necessarily mean that it kept employing 500
people for the same output in the years since. Re-shoring the same volume of
production may mean significantly fewer jobs today, in e.g. textiles:

"U.S. Textile Plants Return, With Floors Largely Empty of People", 2013

[https://www.nytimes.com/2013/09/20/business/us-textile-
facto...](https://www.nytimes.com/2013/09/20/business/us-textile-factories-
return.html)

 _... Take Parkdale: The mill here produces 2.5 million pounds of yarn a week
with about 140 workers. In 1980, that production level would have required
more than 2,000 people. ..._

Or in the case of fields that still are very little automated, like garment
sewing, it would require pretty much the same number of workers now as 20
years ago. As you say, it's very product-specific.

If we broaden the category a bit from "manufacturing jobs" to "industrial
jobs" (including things like coal miners and workers at coal fired power
plants), you also see strong effects from process-and-input changes. It takes
far fewer people to produce a terawatt hour of electricity from a modern
combined-cycle natural gas generating plant than from a modern (worse, built-
in-1970) coal plant. It also takes fewer workers for a TWh from solar PV or
wind power. The rapid growth of jobs in renewable energy is a temporary
excursion, mostly an artifact of current rapid expansion. At steady-state it
will take fewer people to supply electricity from a renewable-heavy
electricity system than a coal-heavy system. That's one reason that I am
bullish on the long term price-competitiveness of renewable electricity but
skeptical that "green jobs" are a panacea for declining industrial employment
in other sectors.

------
ThomPete
It's not just automation it's also digitalization which removes a lot of
middle layers which used to be part of the cost. A much better to think about
this is from the perspective of technology.

The music industry is the best example of what happens.

Basically, things that used to require all sorts of manufacturing and
distribution layers are now more or less compressed into a single digital
device.

------
bongo662
It'd be interesting to see a breakdown of what 'forms' of manufacturing are
leaving the nation. Its pretty obvious that as trade agreements rise up and
its more cost effective to move manufacturing to other countries with lower
payed workers that the company would do that but my guess would be that
higher(?) quality manufacturing still goes on stateside rather than in China
or Mexico for fear of IP theft. So for things like high grade medical devices
- MRI, CT scanners would still be manufactured here because of the knowledge
and technology necessary to construct it.

I also think theirs a good Stephen Hawking quote I like to think of when
people discuss how in a post scarcity world with full automation life will be
a utopia and its something along the lines of "If machines produce everything
we need, the outcome will depend on how things are distributed,"

------
geggam
Go tour a factory. Where there used to be 300+ people there are now 20.

Guess what automated robotic things you now see that weren't there before ?

~~~
madengr
I'm in low volume electronics manufacturing. Sometimes it's not even cost
effective to pick-n-place circuit boards, rather have someone stuff a PCB by
hand. The USA has probably moved to a lot of low-volume manufacturing.

Could be that people are not buying as much stuff. I have read that credit
card debt is back to 2008 levels. Maybe everyone is maxed out; not good.

~~~
geggam
Where I live people are on facebook selling home cooked food and offering to
do handy man work. Jobs I grew up with in fast food that could be relied on to
provide 38 or so hrs a week now provide my teenagers 16-20. The teenagers are
competing with adults for the jobs.

I am of the opinion outside metropolis areas the entire nation is running on
Empty as far as finance goes. The people I know who live here and work normal
blue collar jobs run just under the max on their credit cards and keep alive
by paying minimum. Opening new lines of credit to pay for emergencies

Granted this is only my personal experiences but its common enough its
disturbing.

When people run out of money to buy things what happens ?

~~~
erikpukinskis
When they run out of money, they become illegal and then are detained. As soon
as they need to defecate they will be breaking the law. So usually after
losing your money you become a criminal within 24 hours.

If they keep trying to “sell food” or other illegal activities out of their
home, they will be put in prison.

~~~
geggam
Glad to see I am not the only person who is aware of this.

------
clarkmoody
Is automation to blame for lost agricultural jobs? Lost textile mill jobs?

Yes, it is. Do we miss those jobs? No, we don't, because we're so much
wealthier when we can replace human labor with machine labor. That frees up
humans to do higher-order tasks, improving our standard of living.

Yes, there are winners and losers with any change, but long-term we are far
better off than we could have imagined at the dawn of the Industrial
Revolution.

~~~
sp527
> Yes, there are winners and losers with any change, but long-term we are far
> better off than we could have imagined at the dawn of the Industrial
> Revolution.

This is a deeply ignorant statement that renders invisible over 2 billion
completely disenfranchised people in the third world. Just because you don't
experience the consequences - while you gorge on the bounty of human progress
somewhere amongst the top decile of our species - doesn't mean they aren't
there.

~~~
clarkmoody
I recommend that you go check out some of the data here:
[https://humanprogress.org/dws](https://humanprogress.org/dws)

In the past 150 years, the human race has made extraordinary progress, lifting
billions out of poverty.

There are still many globally who are left out, and I am aware of that. But
you can't argue against the widespread gains to humanity through improved
technology.

------
phkahler
>> If, for example, this year’s model sells for the same dollar price as last
year’s but has more features that consumers want, its true price has, in
effect, dropped. So government agencies produce statistics showing that
output, adjusted for price, has risen.

This is a terrible way to view it. If we pack twice as much on a chip vs last
year, did output go up? But price went down by about the same amount. Should
we measure output in transistors? Printed die area? Dollar price of chips?
Number of man-hours required to produce things? Labor cost?

If Intel spent a bunch of cash on a new fab, made circuits with twice as many
transistors, reduced prices on the old model and sold the new ones at the old
price, then sold the same number as last year, did "output" really change? If
yo u think it did, then I ask if it changed in any way that is meaningful to
economic measures - it didn't change GDP, it didn't change cost or amount of
labor, it didn't even change the companies profits.

~~~
pixl97
Maybe take a larger view of it. Instead of just looking at Intel, look at the
companies buying intel chips, are they getting more output with the same
dollar input?

~~~
phkahler
>> look at the companies buying intel chips, are they getting more output with
the same dollar input?

Probably not. The ones who were constrained by computing power are now doing
higher quality work - FEA comes to mind as something that seems to produce
more accurate results with increased computing capability. Games get "better"
but their market doesn't get bigger - just more demanding. Hollywood does more
CGI, but that doesn't actually increase their market. These are all things
that don't affect GDP.

------
milesvp
It occurs to me as I think about this topic more and more (sadly article is
paywalled so I can't speak to it directly), manufacturing is to blane for lost
manufacturing jobs. Economies are self balancing, and since manufacturing
makes goods cheaper, eventually people will do other things that are still
expensive. This is prediminantly why people talk about transformation to
service economies.

Manufacturing is inherently about mass producing, which means it's always been
about scale, which means doing more without adding proportionately to labor.
Automation is just one of the many things that help scale, it's just one of
the many things that requires capital investment.

The bigger problem for manufacturing jobs has been globalization. When you can
take your capital to a market with cheaper workers, then labor becomes a
scaling tool (ironically?) in that you can throw labor at a problem to get
your labor costs down. What's interesting about this, though, is that at some
point you can't do this anymore. Textiles, which is considered level 0 for
manufacturing, has nowhere left to go for cheaper labor than Bangladesh
(without significant political instability issues).

------
bsder
Automation certainly isn't solely to blame. Our estimate of productivity is
wrong.

[https://qz.com/1269172/the-epic-mistake-about-
manufacturing-...](https://qz.com/1269172/the-epic-mistake-about-
manufacturing-thats-cost-americans-millions-of-jobs/)

------
salawat
No. Not as the root cause.

I mean it's definitely a contributing factor, but only because of the axioms
that drive our definition of a good company.

The ideal company is seen as an investment vehicle that creates shareholder
value. Full stop.

We don't measure well performance of a company in terms of hiring people. Nor
do we even measure it in how well they do what they are there to do. It always
getsmeasured in value returned to investors. Investors are generally not
laborers in this day and age. And any company that can make more long term by
automating and dumping the need for laborers will.

You can blame Automation all you want, but it's something far more basic that
makes automation a worthy goal in the first place.

And no, neither automation nor the incentives that make it desirable are
"easy" problems to fix.

~~~
Finnucane
>The ideal company is seen as an investment vehicle that creates shareholder
value. Full stop.

Even if that were true, that's not a factor that just suddenly started to have
force in the last couple of decades.

~~~
moosey
Massive tax cuts for the wealthy, particularly for capital gains and
dividends, have reduced the resistance for money escaping corporations into
the hands of investors, rather than the value add of paying employees more or
improving working conditions and benefits. These changes started to occur in
the 1980's, rather than the Dodge vs. Ford decision from 1919.

While it is certainly true that nothing legally changed (edit: this isn't
true: there is a full on attack on collective bargaining ongoing) in the more
recent 30-40 years to allow for the massive accumulation of wealth and
corporate practices that make the 'FULL STOP' in the original comment more
accurate than before, the modification of tax law certainly has had a major
impact.

------
rossdavidh
Well obviously automation is to blame, that's why the economy shifted to
buying real goods made in China and Mexico, two nations that at the dawn of
the 21st century were at the forefront of robotics. Also places like
Bangladesh and Vietnam. It also explains why imports from places like Japan
and South Korea, clearly laggards in robotics, declined over the last couple
decades.

Oh, wait...

~~~
John_KZ
Although China is on the other side of the equation, it provides plenty of
clear examples showing automation _not_ eliminating jobs. It changes the
available jobs, and generally improves them (ie digger operator instead of
hand-shovel "operator") but jobs are still available.

~~~
Brockenstein
Well I wouldn't call an excavator automation exactly. But at the same time,
you think ten guys digging a ditch at least some of them aren't made redundant
when you get an excavator? You don't need ten excavators, and maybe you don't
need 1 excavator driver and 9 ditch diggers...

I mean I think you're engaging in selective reasoning.

~~~
sigstoat
> Well I wouldn't call an excavator automation exactly.

go dig a trench by hand and get back to us.

------
madengr
On NPR this morning, they said that USA manufacturing jobs have decreased this
1/4, despite total number of jobs increasing.

------
pixl97
Paywalled partial article.

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0xdeadbeefbabe
Nope, speculation caused it.

