Economist Says Manufacturing Job Loss Driven By Technology, Not Globalization

NPR's Scott Simon talks to economist Michael Hicks about how most of the manufacturing jobs lost in this country are due to increased use of technology and not outsourcing to foreign countries.

SCOTT SIMON, HOST:

American manufacturing jobs are disappearing. Donald Trump certainly hammered that theme home during this year's campaign. The country's lost more than 7 million factory jobs since the late 1970s, and yet the amount of stuff the U.S. produces is at an all-time high. A lot of these jobs have not been lost to other countries, according to Michael Hicks who's an economist. He co-authored a report last year - "The Myth And Reality Of Manufacturing In America." He says automation is responsible. Michael Hicks who teaches at Ball State University joins us now from the studios of Indiana Public Radio in Muncie. Professor Hicks, thanks for being with us.

MICHAEL HICKS: It's good to be with you.

SIMON: And, boy, Indiana has been in the crosshairs of this recently - hasn't it? - because of the Carrier plant. What do you make of President-elect Trump's representation that hundreds of jobs were saved?

HICKS: Well, clearly, for the workers that are there, it appears that there are going to be more jobs available for the next several years. The question that I have is whether or not the jobs are saved or the workers are saved? As the plant probably goes through an automation period, we just don't know how many of the workers that are there now are going to be able to fit into the new, highly technical automated factory of 2020.

SIMON: Yeah. Do you believe people that talk about our outsourcing haven't accounted for the powerful impact of automation in industry?

HICKS: You know, it's very clear to me in talking about the subject and writing about it for the past couple of years that there's a real disconnect between what we talk about, which is jobs floating overseas to Mexico and China and Vietnam, and the reality, which is that automation and technological improvement have really accounted for the vast majority of job losses in Indiana nationwide.

SIMON: Yeah. Well, explain to us how that works. How could we be producing more stuff with fewer people?

HICKS: Everything from statistical process control that cuts down on waste and mistakes and measurement to robotics. And digitisation of a production process is going to make things quicker. So to sort of put in context, in 1990, the average American autoworker made 13 cars a year. In 2010, the average American autoworker made 18 cars a year. So we don't need as many auto workers as we did a generation and a half ago.

SIMON: Are new jobs being created by automation?

HICKS: To be sure, they're harder to see, but the entire tech industry is really fueled by the need for factories and for service providers to have more technology. And then, you know, of course, logistics - between the time that manufacturing peaked in 1977 and today, we're down about 7 and a half million manufacturing jobs, but we're up about 9 and a half million logistics jobs.

SIMON: What about the promise that I daresay some people find to be smug that is sometimes made to people who work in factories? Oh, don't worry. More jobs are going to be created, and we'll train you for those. Is that practical?

HICKS: You know, it's a difficult thing to ask a 56-year-old guy or gal who hasn't been around middle school math since the early '70s to, you know, jump into a training program at our community technical college or with our workforce development board and get retooled for a technology job or to work in a health care setting. It's a very difficult thing to do. I mean, we may have to face up to it, but it's not a simple and seamless task.

SIMON: Are we talking about a landscape eventually in this country - and I don't mean in two or three years, but I perhaps within the lifetimes of people listening - where there is no manufacturing? Everything is robotic.

HICKS: That's an interesting question. I think it's - to think about the challenge that manufacturing may face, is - it's good to look at agriculture. We were, within living memory, at a time when most Americans in the Midwest and certainly the grain states - Nebraska, Kansas - were working in agriculture, and those are very important industries. Two thousand fifteen was a record agricultural production here in the United States. We're doing that with a very, very small share of the population. So the challenge of places like Muncie or Youngstown or Detroit that have a lot of manufacturing is - what are you going to do afterwards to keep people here that was less successful for much of the agricultural industry?

SIMON: Michael Hicks at Ball State University, thanks so much for being with us.

HICKS: Delighted.

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