In the presidential election season, free trade is being attacked by politicians on the left and right, who promise to bring manufacturing jobs back to the U.S. or at least keep existing jobs from moving out.
Putting a specific focus on the debate is a viral video of an announcement that a Carrier plant in Indianapolis would close, with 1,400 jobs sent to Mexico, where workers would earn in a day what the Indianapolis employees could earn in an hour.
In fact, despite campaign season promises, there is little politicians could do to boost the number of U.S. manufacturing jobs. As Nelson D. Schwartz puts it in the New York Times, “The relentless loss of American manufacturing jobs…goes back nearly half a century, driven largely by forces beyond the control of any president. The advances of technology, the diffusion of industrial expertise around the world, the availability of cheap labor, and the rise of China as a manufacturing powerhouse would have disrupted the nation’s heartland even without new trade deals.”
Schwartz adds that Indianapolis is faring better than other Rust Belt cities, having transitioned to a service economy in healthcare, logistics, and banking industries. But he notes that a college educated woman working in a medical lab earns one-third less than what her mother makes at the Carrier factory.
The Carrier situation involves the transfer of high-wage jobs to a low-wage region. A bigger problem is the loss of manufacturing jobs to automation.
Ben Casselman at FiveThirtyEight offers his own take: “A plea to presidential candidates: Stop talking about bringing manufacturing jobs back from China. In fact, talk a lot less about manufacturing, period.”
He adds, “It’s understandable that voters are angry about trade. The U.S. has lost more than 4.5 million manufacturing jobs since NAFTA took effect in 1994. And as Eduardo Porter wrote this week, there’s mounting evidence that U.S. trade policy, particularly with China, has caused lasting harm to many American workers. But rather than play to that anger, candidates ought to be talking about ways to ensure that the service sector can fill manufacturing’s former role as a provider of dependable, decent-paying jobs.
In fact, he writes, factories have been coming back to the U.S., but without jobs. The factories are heavily automated and employ only a small fraction of the workers they would have a generation ago. Since the end of the recession in 2009, manufacturing output in the U.S. has risen by more than 20%, but factory employment is up just 5%.
Casselman concludes, “There is nothing wrong with politicians’ trying to save what remains of U.S. manufacturing, nor with trying to avoid repeating old mistakes on trade. But like it or not, the U.S. is now a service-based economy. It’s time candidates started talking about making that economy work for workers, rather than pining for one that’s never coming back.”
