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What you need to know for 12/11/2017

Kennedy: Blame China, not robots, for manufacturing losses

Kennedy: Blame China, not robots, for manufacturing losses

Auto industry is more automated than most but still has lost jobs
Kennedy: Blame China, not robots, for manufacturing losses
Employees assemble air conditioners at a factory in Foshan, China, on Dec. 21, 2016.
Photographer: Billy H.C. Kwok/The New York Times

Are robots or China to blame for the sharp decline in U.S. manufacturing jobs over the past 20 years?

While media reports would have us looking over our shoulder for robots, the choice was easy for two men immersed in the subject at Washington, D.C., think tanks: China.

Robert Atkinson, president of the Information Technology & Innovation Foundation, bemoaned the “hollowing out” of manufacturing, which he said had always been important to the U.S. economy because its jobs paid above median wage for workers without college degrees.

Robert Scott, director of trade and manufacturing policy research at the Economic Policy Institute, had the numbers: 5.3 million manufacturing jobs lost since 1997, along with 87,000 manufacturing establishments.

The men were part of a training webinar for journalists presented last week by the National Press Foundation, a professional development group. Both thought reporters needed to do a better job on the topic.

Blaming robots for manufacturing’s loss fails to jibe with reality, Atkinson said, pointing out that the auto industry is more automated than most but still has lost jobs. Michigan, easily identified with autos, was among the states hardest hit by the loss of manufacturing employment between 1998 and 2013, according to an exhaustive report Scott wrote two years ago for the Economic Policy Institute.

Atkinson noted that 14 of the 19 major manufacturing sectors identified by the government have lost real value-added output since 2000. Growth in manufacturing nowadays is concentrated in cellphones/computers, he said, which is a relatively small sector. “The rest of manufacturing has actually shrunk.”
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Both Scott and Atkinson blame trade for 40 percent to 60 percent of the manufacturing jobs lost since 2000, citing as key events the Asian financial crisis in 1997 and China’s entry into the World Trade Organization in 2001.

The former made U.S. exports more expensive while flooding this country with cheap Asian imports. The latter spurred the relocation of U.S. factories to China and flooded this country with cheap Chinese imports.

The U.S. trade deficit now is about $650 billion — “those are goods we’re buying from other countries,” Scott said. China, Europe and Japan have trade surpluses.

“Bad trade deals” are part of the problem, he said, crediting President Trump with having “stumbled into” recognizing that such accords have been “costly.” Both Scott and Atkinson, though, would rather see Trump go after China than try to renegotiate the North American Free Trade Agreement with Mexico.

“We have an opportunity today to rebuild American manufacturing, but it’s going to take a coherent set of strategies to increase output,” Scott said.

Atkinson agreed that the focus should be on reviving complex sectors that a “low-wage, low-skill Chinese worker can’t easily do” — biologics, pharmaceuticals, specialty chemicals.

But it would take “putting our mind” to investing in needed research and development and “upskilling” U.S. workers, he said.

Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at marlenejkennedy@gmail.com.

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