My first job in publishing was at a company that produced, among other things, the leading magazine for elementary school teachers. It had a circulation of around 250,000.
The most interesting part of the new employee tour was the circulation department, which looked like the city room at a major newspaper. There were a lot of busy people, mostly women, scurrying around in the main open area, plus private offices for the director of circulation, the assistant director, and whoever else.
There was also an adjacent room, separated by a wall of glass, that housed the computer. That machine was an IBM mainframe, bigger than a station-wagon and costing a million dollars in 1976. A new car at the time was about five thousand.
Now 125 years old, the magazine still exists, although the title and ownership have changed. I don’t have any inside knowledge about its management, but I’m pretty sure that the circulation department is a thing of the past.
It didn’t move to China. There is no mirror-image city room in Singapore or Mumbai, with low-wage emerging economy strivers taking the place of American workers. The jobs weren’t lost through unfair trade agreements or currency manipulation. They were gradually obviated by Microsoft and Cisco, Oracle and Intel.
There is probably one job left, and it’s probably here in the United States. Somewhere somebody sits at a desk and runs some pretty slick hardware and even more impressive software.
There is no separate room required to house a 2000-pound computer, either. That machine, by the way, had probably replaced a number of employees itself, but it also created jobs. It was designed, built, sold, serviced and operated by Americans.
Today it could be replaced by a smartphone, which is made in China. Even if it were possible to bring that manufacturing back to the United States, how many jobs does one cell phone represent, compared to a 1976 IBM mainframe?
With the exception of the Dark Ages, I don’t know of any period in human history in which technology has moved backwards, and greater efficiency means fewer and fewer people-hours are required to accomplish any given task. That trend was the subject of a December 21st article in The New York Times entitled “The Long-Term Jobs Killer is not China. It’s Automation,” by Claire Cain Miller.
Using the steel industry as an example, Miller states that it lost 400,000 people, or 75 percent of its workforce, during the period from 1962 to 2005. The output of steel in this country did not decline, but was simply produced by more advanced mills.
The same scenario has played out in most other industries. You will hear people say that we don’t make anything in America anymore, but nothing could be further from the truth. We actually manufacture more stuff than ever, but we do it with fewer people.
An analysis from Ball State University concluded that 87 percent of the job losses in U.S. manufacturing have resulted from automation, with the electronics industry hit the hardest. The other 13 percent were lost to foreign trade, which struck apparel making the hardest. Around 98 percent of shoes and clothing are now made overseas.
That “globalization” did cost a lot of jobs, probably over 2 million in the decade of the 2000s alone, but they weren’t the so-called “jobs of the future.” In other words, most of them would eventually be lost to technology anyway.
All of which raises the question of what we should expect from the new administration, which ran on a platform of “bringing back” jobs. Back from where?
Most of the world’s great technology companies are American, even if they don’t do their manufacturing here. Many of them were represented by their CEOs at a meeting with Mr. Trump at Trump Tower in New York in December. He told them “We want you to keep going with the incredible innovation. Anything we can do to help this along, we’re going to be there for you.”
The nominee for labor secretary is a fast-food executive named Andrew Puyder, who is famous for favoring automation in the retail sector. Referring to robots, he said in a magazine interview last year, “They’re always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip-and-fall, or an age, sex, or race discrimination case.”
He does have a point, and he may get his wish. The Nestlé company is now testing 1,000 robots working as sales associates in Japanese stores, selling coffee-making machines.
At any rate, the Trump administration does not sound like it’s about to slam the brakes on automation. Even the famous deal to keep Carrier air conditioning from moving jobs to Mexico had a final irony to it that most of the media missed. Part of the agreement called for Carrier to invest $16 million to modernize one of its U.S. plants, and the money will be spent on, you guessed it, automation.
Bringing back jobs from overseas would seem even less likely, but if Mr. Trump wants to try it he could start with his own family. Ivanka Trump’s line of clothing and accessories is made almost 100 percent offshore, with blouses from Indonesia, jackets from Vietnam and shoes from China. Apparel at the Trump Tower store comes from Bangladesh, Pakistan, and other points east.
It’s not that the Trumps aren’t aware of the hypocrisy, or haven’t sought out domestic suppliers, it’s that clothing is a relatively labor-intensive product. If they make things in the United States, they are going to have to raise prices substantially.
The average manufacturing wage in the U.S. is almost $4,000 a month, or 10 times the average for China. That doesn’t mean that the jobs are necessarily going to stay in China, it just means that they aren’t coming back here. Chinese shoe manufacturers are currently building factories in Africa, where average wages are about one-tenth of those in China.
As you know, art materials are manufactured all over the world. Some are made “the old fashioned way,” in Europe and elsewhere, as they have been for centuries. Others are produced as inexpensively as possible, taking full advantage of the wage situation in emerging economies. I don’t know how much stuff is made by robots, but don’t underestimate the little devils.
Aside from bots, I don’t see art materials manufacturing changing significantly under this new administration, unless we really do get into a trade war with China.
That would not be a pretty picture.