The recent Presidential and Congressional elections in the US shocked me to the core. I, like many of my closest friends, were certain that the American people would reject Donald Trump and the Republican party’s rhetoric.
But the election happened, and since then, I’ve been trying to pay attention to the reasons. I’ve had many conversations with Trump voters and the old adage proves true: It’s the economy, stupid.
But what’s wrong with the economy? For me, a tech worker in California, the last 8 years have been the best of my life. My pay has risen, and my job quality has gone up. This is true of all of my close associates as well. We simply haven’t seen this economy as anything but a boon. Of course, we’ve worked hard, and played our cards right. But the timing has never been better for workers in the tech sector.
However, I’m not ignorant to the reasons behind this. Why is my salary going up, but those of factory workers in Ohio and Michigan going down?
Donald Trump would have you believe it is our trade policies and the lack of a large wall on our southern border. The latter is an absolutely absurd idea on its face, but if you think longer, it’s really just a physical manifestation of the frustration of his supporters. They do see Mexican and Central American immigrants working, and they think “They took some US Citizen’s job.”
Economists disagree. In fact, those immigrants who have illegally crossed the border tend to take service economy jobs that are low paying and without benefits. Because they live in fear of deportation, they tend not to exercise their labor rights, and as a result, tend to have a very low job quality. That’s not the kind of job that will “make America great again”. That’s the kind of job that comes and goes over time and leads mostly to a lower class lifestyle. Those who come legally tend to come on visas to fill labor shortages, despite rhetoric suggesting that somehow companies are abusing the H1B and other programs.
But what about trade policies? Is it simply too easy to make stuff in China, Mexico, or Pakistan, and then import it back to the US?
That is a part of it. Those places don’t have the same worker protections and have a lower cost of living, so one would expect that greedy corporations can make more money by reducing manufacturing costs there, and giving back a bit of the margin in shipping costs.
But many things made in factories require customization. One difficulty in putting the product so far from the consumer, is that you can only make to stock. Make to order with a 10 week lead time is extremely haphazard and unpopular with most products. Many of the products still made in the US are of this kind.
Also many products require skilled labor to produce. While a T-shirt can be sewed by relatively unskilled hands, and an iPhone can be assembled in stages that require minimal training, a wafer of microprocessors must be created in a high level clean room by automation that is overseen by well trained employees. Certain products are simply so American that it would make no sense to make it anywhere else, such as Wilson Footballs which will likely forever be made in the US unless China decides it wants more concussions and we end up with a Shanghai vs. Dallas super bowl in 2035.
Also, don’t forget that these countries have now built their own middle class, and will soon run out of cheap labor as well. There are more emerging economies, but the point is, this isn’t a never ending chain, though it is one that doesn’t end soon.
So I would suggest that while globalisation is an important factor, it’s been here for a long time, and no recent trade policies have really added to its impact. Those jobs aren’t coming back because our government wills them to. Tarrifs on Chinese imports will just result in China putting Tarrifs on US goods, and soon you’ll find that companies in the US are struggling to grow because the US economy, while large, is not in fact big enough to sustain itself. Whether you agree with the way in which NAFTA or the TPP were implemented, the economy will experience a huge upheaval without international free trade of some kind.
So, globalization took jobs away decades ago. What’s going on now? Why haven’t manufacturing jobs grown with the rest of the economy?
Well, I’m sorry to say, but in many cases, I took your job. Not me personally, but my industry has made automation and artificial intelligence a reality. And if you are being relied upon to make things even after globalization, get ready to have your job threatened again. In 1961 the first industrial robot, Unimate took dangerous jobs away from GM factory workers, and since then plenty more robots have been added to the global manufacturing scene. This was an expensive robot to build and oporate, and so, by the 1980’s, we had already seen that generation of robots take as many jobs as were going to be taken.
But lo, a new generation is upon us. Robots are on the market right now that cost under $30,000, and will do general purpose tasks with enough flexibility to make things to order. This means that for a capital investment of a low end employee’s salary for a year, a factory can replace a human right here in the US. No more benefits, smaller parking lot, no air conditioning or heating, no cafeteria. And they’ll just need to employ a couple of engineers to keep the whole thing running.
So what do we do for those displaced workers as automation happens at this level?
Well believe it or not, there are tons of jobs that aren’t getting done because of labor shortages. These jobs aren’t just in computers. They are also civil engineering tasks, environmental engineering, and raw science. These are all things that will want you to have specific training, whether it’s a doctorate degree or some specific training in a particular field.
But, you don’t have a college degree, you weren’t trained in one of these fields, and your job is threatened so you’re not going to be able to afford to get one.
Well, folks, this is where the recent choice of a Republican Majority government is going to make this hard. The republicans are suggesting that if they let those at the top keep more of their money, they’ll build more factories, and invest in more businesses. But the reality is, that will just enable them to buy more automated infrastructure, and keep even more of their profits. They’ll do this 100% under the protection of the US constitution, and there won’t be anything you can do about it.
I know, it sounds like marxism to some, but the answer is to raise taxes on those individuals living far above subsistance and even above comfortable middle class lives. We should then use that money to make college and advanced job training affordable, or even free to those who qualify by their academic achievements. That will get us even more engineers and scientists to actually build the world we want to live in, and also more system administrators, repair technicians, etc. to keep the world running. Most of these are safe jobs, and many of them can be done remotely, so you don’t have to move to a dirty, crowded city to take them.
And make no mistake, what I’m arguing for is my own salary to be reduced. If there are more people out there who can do my job, I can expect to make less money. But I’d be happy to have less money, if it meant my kids get to live in a world where everybody has a chance to do what they want with their time, and we have the time to take care of the earth the way it should be done.