ARTICLE - LOSS OF JOBS IN THE RUSTBELT What caused the loss of jobs in the Rust Belt? When Donald Trump was sworn in as the 45th President of the USA, his victory in the 2016 election was a surprise to many, and his success in the so-called Rust Belt was a predominant factor in helping him achieve it. Wisconsin, Michigan and Pennsylvania all went to Trump, something that had not happened for a Republican candidate since Ronald Reagan in 1984. During his campaign, Donald Trump promised to boost US manufacturing and punish companies for moving jobs overseas. He threatened that any company that lays off American workers to move to another country will face a “substantial penalty” when trying to sell their products in the USA. Unfortunately for America’s struggling working class, the majority of manufacturing jobs that have disappeared over the past few decades are never coming back, for one simple reason: they no longer exist. This reality is evidenced by a simple trend in manufacturing in America since the end of the Great Recession: while manufacturing output has increased more than 20% since 2009, manufacturing employment has grown by just 5%. In other words, manufacturers have been returning to America in recent years, but they have not been bringing a whole lot of jobs with them, as Trump had initially expected. It has not been the Chinese or Mexicans who have been taking the majority of American manufacturing jobs, but machines. Of the millions of manufacturing jobs lost over the past decade, more than 80% have been replaced by automation technologies, not foreign workers. It is, of course, much easier to scapegoat (i.e. blame) foreigners and immigrants than to blame robots. And so the “good old days” of American manufacturing, when hard-working Americans could reach the middle class by working in the same local factory for 30 years, are long gone. No president, not even a strongman like Trump, can reverse the tide of “creative destruction.” This process – which was first detailed in the writings of Karl Marx – is endemic to the capitalist system. Economist Joseph Schumpeter, who described creative destruction as a “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one,” called it the “essential fact about capitalism.” Throughout the history of industrial capitalism, creative destruction has frequently caused social strife and recurrent economic crises, eliminating countless jobs and wiping out whole industries. (The Luddites famously responded to this in the early days of capitalism by destroying factory machinery, which, of course, proved futile.) In the long run, however, creative destruction has been a supremely positive force for humanity in transforming our standard of living. Moreover, technological advancements have created more jobs than they have destroyed by establishing new industries and expanding markets – resulting in globalisation. With this in mind, one might assume that this historical trend will continue unabated, and new twenty-first-century technologies will end up creating even more jobs, while continuing to improve our lives. However, this may not be the case, as new technologies – such as robotics, computerisation and artificial intelligence – are fundamentally different from past technologies, with the potential to emulate human labour itself, thus making human workers and their flaws obsolete. In a widely shared article published on BigThink.com, writer Phillip Perry warned of this possibility, which could ultimately produce a global crisis so devastating it would make the Great Recession look like a bad day at the stock market. Perry wrote: “Unemployment today is significant in most developed nations and it is only going to get worse. By 2034, just a few decades [from now], mid-level jobs will be largely obsolete. So far the benefits have only gone to the ultra-wealthy, the top 1%. This coming technological revolution is set to wipe out what looks to be the entire middle class. Not only will computers be able to perform tasks more cheaply than people will, but they will be more efficient too.” Perry cited a 2013 study at the University of Oxford that found as many as 47% of the jobs in the USA were at risk of being automated within the next two decades. “Accountants, doctors, lawyers, teachers, bureaucrats, and financial analysts beware: your jobs are not safe,” Perry insisted. Sources: https://www.forbes.com/sites/adammillsap/2017/01/09/the-rust-beltdidnt-adapt-and-it-paid-the-price/#b3f2227a3d6d http://www.abc.net.au/news/2017-02-18/trump-threatens-to-punish-uscompanies-for-moving-jobs-overseas/8282600 https://www.salon.com/2017/01/11/sorry-trump-voters-those-factory-jobs-arentcoming-back-because-they-dont-exist-anymore/ QUESTIONS What do you think caused the massive loss of American manufacturing jobs in the so-called Rust Belt? Which of these answers seem true? • Free trade destroyed jobs in the Rust Belt. • Jobs in US manufacturing have been replaced by robots and automation. • Most traditional jobs will be replaced by automation. • People left the Rust Belt because improved air-conditioning made it more desirable to live in Florida. • American businesses should have bought American cars and steel, instead of foreign cars and steel. • There was not enough US investment in new technology such as steel mini-mills. • Unions prevented investment by demanding a share of the profits for workers. • Businesses failed to innovate and ultimately could not compete with foreign firms. • American workers could not compete with workers in Japan, China and Germany. • American managers could not compete with workers in Japan, China and Germany.
