International trade is not the main reason for the loss of manufacturing jobs in the United States during the recent decades as there are other factors such as automation. The steep development in technology, especially robotics, should be blamed for a considerable decline in the number of jobs in the American manufacturing sector. America has witnessed a dramatic and steady decline in the manufacturing industry; for instance, by 1979 approximately 20 million Americans were employed (Cocco, “Financial Times”). However, by 2004, only 12.3 million Americans were working in the manufacturing industry. According to Cocco in her Financial Times article, there is a misperception in the America population that trade policies, especially NAFTA and Chinese exchanges, have solely contributed to job declines. However, this construct is merely a misconstrued approach as indicated by the comparative analysis of statistics.
For instance, the U.S. lost a significant amount of jobs prior to trade deals construct. In the 2000-2010 period, the U.S. lost approximately 5.6 million manufacturing jobs (Cocco, “Financial Times”). A study conducted by the Center for Business and Economic Research at the Ball State University indicated that 85% of such job losses occurred due technological advancements, especially automation, as opposed to international trade (Cocco, “Financial Times”). The American manufacturing industry has been working on the premise of “producing more with fewer people.” Arguably, while the cost of installing and maintaining robots can be prohibitive, this cost can be amortized in the long run. According to Cocoo, a contemporary American welder can earn $25 per hour while the cost of operating a robot for the same period is $10. The robot further provides additional advantages such as high precision, voluminous handling, as opposed to the human welder. The working space and conditions required for a robot are greatly reduced as opposed to that for the human workforce. Thus, various companies have opted for the option of robotic automation.
Nonetheless, a growing trade deficit in the manufacturing industry has reasonably resulted in the loss of jobs in the American manufacturing industry. Scott in his report published by the Economic Policy Institute acknowledges that most of the job losses in the American manufacturing industry resulted from huge trade deficits in the manufactured goods; a reason for the loss of more than 3.6 million jobs in the 2000-2007 economic period. The situation worsened with the Great Depression when the U.S. experienced an overall decline in its manufacturing industry by an index of 10.3% (for the 2007-2009 period). After the collapse, America experienced one of the slowest forms of economic recovery in its domestic markets never seen in the last 60 years. A strong growth in the GDP has not remedied the situation as only 900,000 jobs of the 2.3 million manufacturing jobs lost have been recovered (Scott, “Economic Policy Institute”). Additionally, the resurgence of trade deficits, realized in the post-2008 recession has further hurt developments in the manufacturing sector.
The U.S. has additionally seen recurrent trade deficits in the current years. For instance, a 2007 research conducted by the Economic Policy Institute indicates that post-NAFTA has seen America lose approximately one-third of its manufacturing jobs. While trade deficits played a role in this loss, U.S. trade policies and the Chinese unfair subsidy program have all contributed to this unfortunate scenario. This is a position that Cocco further takes; according to the author, 13% of job losses in the American manufacturing industry occurred due to unfair trade relations with other countries. The position is further supported by an analysis conducted by the Massachusetts Institute of Technology (MIT), which states that an increment in Chinese imports from 1999 could have cost 2.4 million American jobs (Scott, “Economic Policy Institute”). It implies that the recent Trump’s policy of increasing protectionism will not override other factors such as automation in reclaiming the glory of the American manufacturing industry.
- Cocco, Federica. “Most US manufacturing jobs lost to technology, not trade,” The Financial Times, 2, Dec. 2016, https://www.ft.com/content/dec677c0-b7e6-11e6-ba85-95d1533d9a62
- Scott, Robert. “Manufacturing Job Loss Trade, Not Productivity, Is the Culprit.” Economic Policy Institute, 11 Aug. 2015, https://www.epi.org/publication/manufacturing-job-loss-trade-not-productivity-is-the-culprit/
