Quote of the Day
Character is a diamond that scratches every other stone.
The only television news program that I watch is the PBS Newshour. I particularly like the discussions between Mark Shields, a reasonable liberal, and David Brooks, a reasonable conservative. On inauguration day (20-Jan-2017), they had an interesting discussion about the challenges the US faces and what can be done about them.
During the discussion, Mark Shields made a statement on US manufacturing employment that was both dramatic and easy to fact check. He stated that
In 1940 there were 137 million people in the Unites States of America –and ah, 132 million – and there were 600,000 more factory jobs than there are today. There were 8 million more factory jobs in this country when Jimmy Carter was president.
I decided to surf over to the US Bureau of Labor Statistics (BLS) and see what the official statistics say. The BLS tracks manufacturing employment – I could not find "factory employment." Assuming that Shields was talking about manufacturing employment, I plotted the BLS data in Figure 1. Here is what I gleaned from these numbers:
- There are actually 1.4 M more manufacturing jobs at the end of 2016 then in 1940. So Shields is wrong on this point.
- Shield's overall point is that manufacturing employment has not tracked with population – he is absolutely correct about that. The US has roughly 320 million people today, which is nearly 2.5x the US population in 1940. If manufacturing employment had tracked with population, we would have 26.3 M people employed in manufacturing today rather instead of the 12.3 M we actually have.
- He is right about manufacturing employment peaking during the Carter years and the number of manufacturing jobs was nearly 8 M more than today.
- It is unclear to me how many manufacturing jobs were lost because companies decided to move overseas versus structural changes in our economy that reduced the need for manufacturing workers. For example, Fortune magazine is reporting that 88% of the US manufacturing jobs lost were due to automation and local factors, not international competition.
I am from a small town (Osseo, MN) where employment was divided between manufacturing and agriculture. The main manufacturing employer was a company called Bishman Manufacturing, which made an automobile tire changer (Figure 2). I remember when they closed shop in Osseo (1970s) and moved to South Dakota to find lower wage workers. A loss of jobs like that is devastating for a small town. Most of the workers refused to move, with many of the older workers taking low-pay jobs to try to bridge them to retirement.
If you wish to see the actual statement by Mark Shields, I have included a video link in Figure 2. For those who want to check my work, here is my source file.
|Figure 2: Mark Shields Statement Starts at 14:45 minutes into the Video.|
This is a favorite subject of mine. I heard two numbers recently regarding the ratio of jobs lost due to automation versus off-shoring. The first I heard on NPR and came from a recent economics report that cited 88% of manufacturing job loss due to automation versus 12% for off-shoring. From a completely different source, I heard an economist with a more conservative background say that approximately half of steel jobs in the US were lost to automation. Not sure if the difference between those values relates more to the industries under study or the political leanings of the writers but, in any event, my fear is that most of those jobs are never coming back.
I have been telling my sons that I am stunned by the advances occurring in automation – the last ten years have been incredible. My team designs electro-optical products. I would estimate that our design productivity has tripled since I started 16 years ago. This is all due to software-based tools. We are also about to see the single largest category of male employment, driver, come under siege from automation. Many, if not most, driving jobs will be gone forever.
We need a vision for the future of work. I am very optimistic that the future can be better than today, but we need to prepare for the massive change that is going to occur. None of our infrastructure (i.e. government, education) is prepared.
Thanks for commenting.
You probably have too much stuff to read as it is but the Atlantic magazine has written a lot over the years describing this phenomena. This is a good example:
James Fallows in the same magazine did a great series about industry in large and small towns all across America. This may resonate given your small-town background.
I am greatly encouraged by the bottoms-up approach shown in this series of Atlantic articles. Maybe these jobs can come back in some other but well-paying form.
Getting me to read James Fallows is easy … I view him as America's finest essay writer. Thanks for the references.