These Jobs Are Going Boys

This is a line from a prophetic, 1985 Bruce Springsteen song, “My Home Town.”  It ends with “and they ain’t coming back.”  The song tells the tale of many hometowns across America during the past several decades.  In spite of what President Donald Trump claims about jobs, he won’t bring them back.  The economy and technology have changed dramatically over the past three decades; political slogans, bombast and arm twisting aren’t solutions.

Just look at Amazon.com to see the writing on the wall.  Orders are taken by computer.  A robot goes out into a giant warehouse, picks a product off a shelf and delivers it to a shipping area.  A few days later it arrives at the customer’s door.  Is it any wonder Labor Department statistics show that jobs at traditional department stores have fallen 46 percent in the last 15 years?

A recent study by Cornerstone Capital Group predicts that 6 million to 7.5 million of the 16 million retail jobs in the U.S. will “likely” be lost to robots and other automation techniques in the coming years.  Even these jobs aren’t that great according to a Business Insider bar graph displayed in this study.  It shows that only four out of 29 well-known retailers pay at or above the poverty wage.

Manufacturing has long been a key area for robots and automation.  Any new factory being built or upgraded today will certainly incorporate all of the automation possible.  High productivity is the key to effective competition in the global economy.  No doubt cheap labor is a factor in moving production offshore, but I have read that even Chinese manufacturers are automating.  They are concerned about plants moving to other Asian countries where labor is even cheaper. It is a race to the bottom.

Is U.S. manufacturing in decline?  Not according to a Ball State University study published in June 2015.  It painted a rosy picture of manufacturing in the U.S.  This sector has been robust since the end of the Great Recession and the manufacturing production index has a healthy upward trend line.  However, the study found that automation was responsible for almost 88 percent of manufacturing jobs lost over the last two decades.

In its conclusion the study advocated corporate income tax reform, which I think is needed.  It also put great emphasis on education, stating that federal and state governments should actively support secondary and tertiary level education reforms that provide the mathematical and cognitive skills needed to prepare students for employment in manufacturing,

Unfortunately Republicans don’t show much interest in promoting the education programs that experts propose; Trump’s budget proves it.  It would cut 13 percent from education funding for fiscal year 2018 alone.  One published summary calculated that over 10 years Trump’s budget would cut federal funding for K-12 and vocational education by 16 percent and higher education funding by 41.6 percent.

So what are the GOP proposals to aid the blue-collar workforce?  Well, they are always the same:  Eliminate “job killing” regulations — that protect workers and the environment — and cut taxes for the wealthy.  Instead of increasing funding for job training, Trump’s budget would decrease federal support for these services and shift more funding responsibility to the states.

Question is can the states afford it?  In January the Urban Institute released a study entitled “State Budgets in the Trump Era.”  This study opens with an important statistic that I have used numerous times: Federal funding averages over 30 percent of all state budgets.  State education programs are a significant beneficiary of these funds.

According to the UI study, over 50 percent of state budgets were facing deficits at the beginning of 2017 due to decreased revenue and increased demands on services.  With GOP budget proposals like the American Health Care Act, Republicans are hell-bent on decreasing federal funding for states and increasing the demands on state governments.

Trump is not going to bring many jobs back by threatening manufacturers.  As recently reported in Time Magazine, Rexnord Industries, a Milwaukee based company that makes ball bearings at a plant in Indianapolis, Indiana, will move that plant to Mexico this year.  So far 200 of the 300 employees have been laid off.  Sadly, some of them are training their Mexican replacements.  Going forward the company is investing in automation that could eliminate workers elsewhere.  Trump criticized Rexnord in several tweets.  Management just ignored him.

Repealing regulations will not bring jobs back to coal country.  Technology, cheap natural gas and alternative energy have eliminated many of those jobs.  Like the song says, “they ain’t coming back.”  To make matters worse, Trump’s budget would eliminate funding for the Appalachian Regional Commission, which was designed to strengthen economic growth in Appalachia.

A large infrastructure program would help create good jobs but it won’t solve the systemic jobs problem.  Congress must provide focused funding for retraining programs to help currently displaced workers and support better education for those who will enter the work force over the next decade.  However, instead of making these investments that enhance our economic future, Republicans want to cut funding for them.

I don’t think the GOP’s 1980s tax cutting ideology will solve today’s jobs problems; and Trump’s budget cuts will no doubt exacerbate them.  So those Trump voters who are counting on him to produce a jobs miracle will likely have a long wait.

 

About eeldav

I am a retired corporate attorney who has lived in both Europe and Asia. While working my responsibilities took me to over 40 countries in Europe, the Middle East, Africa and Asia.
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3 Responses to These Jobs Are Going Boys

  1. ronpartin says:

    Sadly, this comes at a time when states are reducing their funding of education. Very short-sighted.
    What kind of future are we creating for our grandkids?Ron

    Sent from my iPad

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  2. The thousands of Wall Street jobs where human expertise is applied to the buying and selling of financial instruments are also at risk. AI will shortly replace most of them. Not that I expect better results.

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  3. John Maimone says:

    Still enjoying your thoughts. This one reminded me of an article I had saved…some facts in the face of myths about coal jobs returning: https://www.theatlantic.com/politics/archive/2013/10/coal-countrys-decline-has-a-long-history/453144/ The article does not go back that far but I seem to recall that coal jobs actually started to decline in the 1950’s with the introduction of more automation (technology).

    I wish it were hard to believe how much our legislators say and do while ignoring knowledge and facts! John

    Be kinder than necessary, for everyone you meet is fighting some kind of battle.

    Like

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