Progressives, executives, and labor leaders consistently point to a resurgence of American manufacturing as a sign of what might come: the return of good jobs en masse. Speaking at the Ford Michigan Assembly Plant in Detroit in January, President Obama said the car industry rebound suggests that “America’s resurgence is real.” News headlines have even referred to the success of the car industries as heralding a “new industrial revolution,” suggesting that cars and, more broadly, manufacturing can fill the expanding void of good middle-class jobs. But relying so heavily on manufacturing is not the solution to the jobs crisis, and creating delusions of what this industry can do for the American economy has led to a waste of political capital and resources.
Ryan Harper is a former Obama administration aide who recently graduated with a JD/MBA from Stanford University. He will work at a management consulting firm in Washington.
On a recent visit to Detroit I saw what the resurgence of manufacturing really looks like. As my graduate student classmates and I drove through General Motors’ giant manufacturing floor filled with whirring robotic arms welding dozens of cars in rapid succession, we saw shockingly few people. And management made it clear that automation would only increase. Or, put another way, management believed that there were still too many people working on the floor.
This experience crystallized a hard truth: The future of manufacturing may be more productive, but it won’t create many more jobs. Manufacturing, so long at the heart of the American dream, is now increasingly an industry run with automation. Since the peak in 1979, manufacturing jobs in the United States have declined by 37 percent. While manufacturing has come back a bit since 2009, manufacturing employment still lags behind pre-crisis levels, and, as Obama’s “car czar,’’ Steven Rattner, explained in the New York Times last year, many of the manufacturing jobs created in the wake of the crisis are paying $13 to $14 an hour, little more than the minimum wage. We should applaud G.M.’s success, but at the same time we need to recognize that it will not allow blue-collar workers in Detroit or Ohio to get their old economy back.
Despite these harsh realities, many insist on believing that manufacturing, the industry that helped provide the previous generation a middle-class life, can do the same for the next generation. Take much of the debate over the Trans-Pacific Partnership. Congressional leaders warned that the agreement would give Asian countries new opportunities to decimate American manufacturing. Labor leaders say its passage would herald the likely closure of tens of thousands of factories.
Rather than acknowledge the difficult truth that these factories are or soon will mostly be run by robots, labor leaders are busy treating the trade partnership as the be-all and end-all of the American worker. Perhaps it’s because the Trans-Pacific Partnership is an easier political football to kick, but the question remains: Why are labor leaders and progressives grandstanding about its impact while failing to put forth a more ambitious, longer-term jobs agenda?
The agenda of labor leaders should be re-directed to pushing government to create an environment capable of producing nothing less than a new Industrial Revolution. In a paper, Charles Hirschman and Elizabeth Mogford note that, in 1880, workers in agriculture outnumbered industrial workers three to one, but by 1920 the two industries employed equal numbers. Employment in manufacturing expanded from 2.5 million to 10 million workers from 1880 to 1920. This period of rapid innovation helped lift millions into the middle class and transformed the American economy. Now that we’ve taken that Industrial Revolution to its conclusion by creating machines to do much of this work, we need a new revolution to create industries that will employ those sitting on the sidelines.
A number of initiatives should take priority. First, we should revamp our education system to focus on skills that are less likely to be automated. While a STEM education is important for R&D advances, we need to pay equal attention to other disciplines. David Autor, the MIT economist, notes that computers have a difficult time replicating creative or social skills, which suggests that access to a liberal arts education should continue to expand.
Second, we should increase entrepreneurship and labor mobility through tools like the Affordable Care Act, which allows people to change jobs or start companies without worrying so much about medical coverage, or vocational programs that help train and re-train workers for new industries. Finally, we should boost spending on infrastructure and government R&D. Infrastructure spending still provides good jobs. And, as a Stanford student living in the cradle of modern innovation, I was often reminded that the creation of Silicon Valley largely came because of government R&D. Despite this and other successes, federal R&D spending as a percentage of GDP is lower than it was in the 1960s and '70s.
During our visit to G.M. one employee poignantly expressed what few of us seem willing to acknowledge publicly. An African-American mother of two, labor union member, and lifelong Detroit resident, she told us flatly: “I hope you know that I see the machines like you all do; I know they’re coming. And I know this industry is not going to be one my children can depend on for their job future.”
We do not know what the next Industrial Revolution will look like, but unless we turn our focus to the larger problems the modern worker faces, we are not doing our part to sustain the American dream.
For the Future of Work, a special project from the Center for Advanced Study in the Behavioral Sciences at Stanford University, business and labor leaders, social scientists, technology visionaries, activists, and journalists weigh in on the most consequential changes in the workplace, and what anxieties and possibilities they might produce.