Can Trump Bring Back Manufacturing Jobs?
During his campaign, President-elect Donald Trump promised to create jobs, revitalizing the manufacturing industry. Since 2000, the U.S. has shed 5 million manufacturing jobs. The question is, can Trump or any U.S. president bring those jobs back to the U.S.?
A lot depends on what killed those jobs in the first place.
Trump lays much on the blame on NAFTA, the North American Free Trade Agreement signed by President Bill Clinton in 1993.
“NAFTA is the worst trade deal maybe ever signed anywhere, but certainly ever signed in this country,” he said, during the presidential debates.
On his website, Trump promised to, “Tell NAFTA partners that we intend to immediately renegotiate the terms of that agreement to get a better deal for our workers. If they don’t agree to a renegotiation, we will submit notice that the U.S. intends to withdraw from the deal. Eliminate Mexico’s one-side backdoor tariff through the VAT and end sweatshops in Mexico that undercut U.S. workers.”
Did NAFTA Destroy American Manufacturing Jobs?
Economists take various viewpoints on NAFTA’s role in the decline of American manufacturing.
Economic Policy Institute founder Jeff Faux calls NAFTA “the door through which American workers were shoved into the neoliberal global labor market.”
“By establishing the principle that U.S. corporations could relocate production elsewhere and sell back into the United States, NAFTA undercut the bargaining power of American workers, which had driven the expansion of the middle class since the end of World War II,” he writes at EPI’s Working Economics blog. “The result has been 20 years of stagnant wages and the upward redistribution of income, wealth and political power.”
Experts who disagree point to the fact that manufacturing jobs actually increased for several years after NAFTA was signed. Others note that foreign manufacturing already competed with American industry — often at a smaller price tag, thanks to lower wages in other countries.
“We’re running large trade deficits, and those do cost us jobs,” says C. Fred Bergsten, director emeritus of the Peterson Institute for International Economics, in an interview with PBS. “Almost none of that can be traced to trade agreements, bad, good or otherwise. Trade agreements always have a small net effect on jobs.”
But regardless of which viewpoint you take, one thing is clear: even if the U.S. pulled of NAFTA tomorrow (or six months from tomorrow), most American manufacturing jobs are never coming back. And trade agreements have nothing to do with it.Even if the U.S. pulled of NAFTA tomorrow, most American manufacturing jobs are never coming back.Click To Tweet
No One Can Stop the Robots
In their 2015 study, The Myth and the Reality of Manufacturing in America, Michael J. Hicks and Srikant Devaraj write:
“Three factors have contributed to changes in manufacturing employment in recent years: Productivity, trade, and domestic demand. Overwhelmingly, the largest impact is productivity. Almost 88 percent of job losses in manufacturing in recent years can be attributable to productivity growth, and the long-term changes to manufacturing employment are mostly linked to the productivity of American factories.”
Why did productivity increase? Advancements in technology, including automation that replaces human workers on the assembly line.
“In other words, robots — not immigrants or bad trade deals — are to blame for manufacturing job loss, the study showed,” Kyle Jaeger explained at ATTN:.
That’s the bottom line: even if every new factory in the world were built in the U.S. from now on, it wouldn’t necessarily mean a boom in jobs for humans.
“Whether or not those manufacturing jobs could have been saved, they aren’t coming back, at least not most of them,” writes Ben Casselman at FiveThirtyEight. “How do we know? Because in recent years, factories have been coming back, but the jobs haven’t. Because of rising wages in China, the need for shorter supply chains and other factors, a small but growing group of companies are shifting production back to the U.S. But the factories they build here are heavily automated, employing a small fraction of the workers they would have a generation ago.”
No U.S. president can stem the tide of automation, no matter what trade deals he revokes or proposes. That’s true for President Trump, just as it would have been true for President Clinton (or Sanders or Stein or Johnson).
Jobs that can be done more cheaply by robots are unlikely to revert to humans anytime soon.
Tell Us What You Think
Do you agree with this assessment or do you have another perspective to add? We want to hear from you. Tell us your story in the comments or join the conversation on Twitter.