In December, the Trump Administration announced a landmark trade deal with China intended to ease tensions between the two governments and restore American manufacturing jobs eliminated by growing U.S. trade deficits with the Asian country since 2001.
In states like Indiana, Michigan and South Carolina where the sector accounts for billions in annual economic impact, the restoration of jobs is critical to the commercial stabilities of the regions.
Bruce Yandle, an economist at Clemson University, said although the Coronavirus has likely made the deal obsolete, “we might wonder why a U.S. president would choose to impose taxes on all U.S. consumers– and then suggest the exporting countries are paying for them.”
Steel, aluminum, timber products, milk, wine, cheese, appliances, auto components and a vast array of consumer goods bought by ordinary Americans are now more expensive than would be otherwise, he said. As a result, U.S. manufacturing is slowing, job growth in the sector is falling and U.S. exports of goods and services is in a state of decline.
Before the COVID-19 pandemic disrupted the global market, an analyst told the Economic Policy Institute the deal may not amount to more than a hill of soybeans, while top White House economic adviser, Larry Kudlow, suggested to The Hill Trump’s penchant for imposing tariffs had been effective, despite the unease of Democrats and many Republicans.
“I think with China, President Trump’s strategy was exactly right,” he said.
WILL AUTOMATED TECHNOLOGY TAKE MANUAL JOBS PROMISED IN THE DEAL?
Suzy Teele, a Spokesperson for the Advanced Robotics for Manufacturing in Pittsburgh, said the organization has not found a definitive source to answer what percentage of jobs will be replaced by automated technology, robots and cobots.
With nearly 500,000 unfilled jobs at the end of 2018, “there is a manufacturing labor shortage,” she said. Across the country, 69.9% of manufacturers reported finding and retaining skilled workers as the industry’s top challenge.
A 2018 Deloitte study revealed the manufacturing skills gap may leave an estimated 2.4 million positions unfilled between 2018 and 2028, with a potential economic impact of $2.5 trillion, she continued. The study showed positions relating to digital talent, skilled production and operational managers may be three times as difficult to fill in the next three years.
According to Teele, manual jobs are in most danger.
Today, “there are very few unskilled jobs left, especially in the United States,” she said. “Humans don’t want jobs that are dirty, dangerous or dull, and robots do these jobs well. What manufacturers really need are people who know how to operate, maintain and repair the robots and other automation equipment to maximize their value.”
In fact, the industry has been squeezing out low-skilled labor at a higher pace over the last seven years.
Bob Goosen, Associate Director of Engineering and Technology Services at the Purdue Manufacturing Extension Partnership, told Tarbell 136,748 robots were shipped to U.S. customers from 2010 to 2016, the most in any seven-year period in U.S. robotics history.
Over that same period, manufacturing employment increased by 894,000 and the U.S. unemployment rate decreased from 9.8% in 2010 to 4.7% in 2016, he said. Based on industry trends, jobs like assembly line workers, welders, quality inspectors, material handlers, truck/bus/taxi drivers, bartenders, fast food kitchen staff, delivery personnel, pilots and soldiers will become ideal positions for robots.
As part of the trade deal, China promised to increase the purchase of U.S. goods and services by $200 billion over the next two years, including nearly $80 billion for manufactured goods.
In the interim, Brian Kuney, a consultant for the Manufacturing Extension Partnership, said collaborative robots will continue to gobble up much of the work and provided an example of their potential use:
“Imagine there are 40,000 non-skilled jobs available but only 30,000 people to fill them. The remaining jobs could be filled by cobots,” he said. “In turn, if there are enough people to fill the 40,000 positions, there is still the potential for 10,000 of those jobs to be replaced by cobots anyway.”
WHY IS THE LOSS OF JOBS A LAUGHING MATTER AT A U.S. SENATOR’S OFFICE?
U.S. Sen. Tim Scott from South Carolina has worked hand-in-hand with the Trump Administration on a variety of political issues including prison reform and foreign trade.
Given South Carolina’s market positioning in manufacturing with global brands like BMW, Volvo, Mercedes, Lockheed Martin and Boeing churning out goods within its borders, Tarbell requested an interview with the Senator.
Between chuckles from his press secretary, Janae Frazier-Bowens, a “no comment” was added.
Although the trade deal seems on-hold with the COVID-19 pandemic and the manufacturing industry remains uncertain on how many reshoring jobs will be lost to automation, a closer eye on American intellectual property may be the one constructive takeaway.
“There are positive dimensions to the sad trade war situation, but they are illusive,” Yandle highlighted.
“There will be a change in the Chinese treatment of U.S. patents and other intellectual property rights,” he said. “But the U.S. firms investing in China already knew about property right uncertainty and want a reduced risk. Should we place consumer taxes on the entire population to make that happen?”