EC Thomas Friedman: Automation Is Killing Jobs

The world would be a much better place if the folks who wrote on economic issues at the NYT had at least an intro econ level understanding of economics. But apparently that is too much to expect, so we find Thomas Friedman telling readers:

"The one area where I think Trump is going to have the hardest time delivering on his campaign promises is to create 'millions' of good-paying jobs by incentivizing and pressuring American companies to manufacture more in the U.S. He still talks about America as a manufacturing wasteland when, in fact, manufacturing remains the largest sector of the U.S. economy but employs far fewer workers.

"As the management consultant Warren Bennis famously observed: 'The factory of the future will have only two employees, a man and a dog. The man will be there to feed the dog. The dog will be there to keep the man from touching the equipment.'"

While Trump will not be able to bring back the six million manufacturing jobs we have lost in the last two decades, it is certainly possible that he could bring back 1-2 million manufacturing jobs if he were to get the trade deficit closer to balance. That would be a big deal for lots of workers, especially if the workers who held these jobs were able to form unions to ensure decent wages and benefits.

In terms of the factory of the future, it may well be highly automated, but that is not the factories of today, which still employ more than 12 million workers. Contrary to what Friedman types continually tell people, the automation process is actually moving very slowly as productivity growth in manufacturing and the rest of the economy has slowed to a crawl.

Productivity in Manufacturing

Manu Productivity

Source: Bureau of Labor Statistics.

As the chart shows, productivity growth in manufacturing has averaged less than 0.5 percent annually over the last five years. The factory of the future may only have a person and a dog, as in Friedman's story, just as the newspaper of the future may have only a computer program to write columns, but we are not at this future yet and not likely to be there soon. 

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Sam Anwar 2 years ago Member's comment

He's likely going to continue offering tax incentives in order to prevent manufacturing jobs from leaving the US. Most notably, the #Carrier deal organized by #Trump and Indiana Governor where they offered carrier 7 million dollars in incentives for maintaining the factory in Indiana

Gary Anderson 2 years ago Contributor's comment

I am just wondering how Trump will get workers for these factories plus for shovel ready government jobs when we are near full employment? He may have to fast track the undocumented! The most inexpensive way to get factories is to require the Chinese to put a few extra factories here every quarter.