Sometimes when tables are close together at a small restaurant, you start talking with nearby diners. Thinking back to one of those discussions, I now have an answer to a question from a concerned gentleman.
The question: Why don’t we make things anymore?
My answer: We do.
High-tech, super-innovative and automated are how a Brookings scholar described the future of U.S. manufacturing. And looking back, you can see that the productivity has already accelerated. Since 1980, the spike equaled a 250% increase in real output.
The problem though is that in 1980, 25 jobs made what 5 do today. As a result, during the past 35 years, the number of manufacturing jobs plunged from 18.9 million to 12.2 million.
Knowing that a spot welding robot costs $8 an hour while a human is $25 an hour plus health and retirement benefits, we can see why. The alternative? Workers that departed could enter the service sector but the pay is $12 an hour with no benefits.
We should add that there was a slight uptick in manufacturing jobs since 2010. But our Brookings scholar says too this was little too late. Instead he suggests a revitalized Trade Adjustment Assistance (TAA) program with more financial and transitional support.
Our Bottom Line: U.S. Manufacturing
The problem is not manufacturing. It’s jobs. So even if domestic production increases, we won’t wind up with many more jobs. We will just have more robots.
My sources and more: Thanks to (always interesting) journalist Ana Swanson at the Washington Post for alerting me to this Brookings paper that led me to the MIT Technology Review. Do note that our featured image is from a GM plant in Flint, Michigan.