Richmond Times-Dispatch Weekend
Rise of the machines: Factory jobs lost to robots
Donald Trump blames Mexico and China for stealing millions of jobs from the United States.
He might want to bash the robots instead.
Despite the Republican presidential nominee’s charge that “we don’t make anything anymore,” manufacturing is still flourishing in America. Problem is, factories don’t need as many people as they used to because machines now do so much of the work.
America has lost more than 7 million factory jobs since such employment peaked in 1979.
Yet American factory production, minus raw materials and some other costs, more than doubled over the same span to $ 1.91 trillion last year, according to the Commerce Department, which uses 2009 dollars to adjust for inflation.
That’s a notch below the record set on the eve of the Great Recession in 2007. And it makes U. S. manufacturers No. 2 in the world behind China.
And research shows that the automation of U. S. factories is a much bigger factor than foreign trade in the loss of factory jobs.
A study at Ball State University’s Center for Business and Economic Research last year found that trade accounted for just 13 percent of America’s lost factory jobs. The vast majority of the lost jobs — 88 percent — were taken by robots and other homegrown factors that reduce factories’ need for human labor.
“We’re making more with fewer people,” said Howard Shatz, a senior economist at the Rand Corp. think tank.
General Motors, for instance, now employs barely a third of the 600,000 workers it had in the 1970s. Yet it churns out more cars and trucks than ever.
Or look at production of steel and other primary metals. Since 1997, the United States has lost 265,000 jobs in the production of primary metals — a 42 percent plunge— at a time when such production in the U. S. has surged 38 percent.
Allan Collard- Wexler of Duke University and Jan De Loecker of Princeton University found last year that those steel jobs vanished because of the rise of a new technology: Super- efficient mini- mills that make steel largely from scrap metal.
The robot revolution is just beginning.
The Boston Consulting Group predicts that investment in industrial robots will grow 10 percent a year in the 25 biggest export nations through 2025, up from 2 percent or 3 percent growth in recent years.
The economics of robotics are hard to argue with. When products are replaced or updated, robots can be reprogrammed far faster and more easily than people can be retrained.
And the costs are dropping: Owning and operating a robotic spot welder cost an average $ 182,000 in 2005 and $ 133,000 in 2014 and will likely run $ 103,000 by 2025, Boston Consulting says.
Robots will shrink labor costs 22 percent in the United States, 25 percent in Japan and 33 percent in South Korea, the firm estimates.
But the rise of the machines offers an upside to some American workers: The increased use of robots — combined with higher labor costs in China and other developing countries — has reduced the incentive for companies to chase low- wage labor around the world.
The Reshoring Initiative, a nonprofit that lobbies manufacturers to return jobs to the United States, says America was losing an average of 220,000 net jobs a year to other countries a decade ago. Now, the number being moved abroad is roughly offset by the number that are coming back or being created by foreign investment.