During the current election cycle, there has been a lot of discussion about protecting and creating manufacturing jobs in America. Several candidates have railed against trade deals – one has proposed a forty five percent tariff on Chinese exports to the U.S.
But as pointed out in a recent New York Times article, trying to fence off America from competition is unlikely to translate into large numbers of manufacturing jobs – the reason? Automation. The nation’s agriculture sector provides a good example of the power of mechanization.
Over the course of the twentieth century, farm employment fell to two percent of the nation’s workforce from forty one percent – this even as output soared. Since 1950, manufacturing’s share of nonfarm jobs has shrunk to less than nine percent from twenty four percent and is still falling.
While it is true that competition from China and Mexico have had an impact, the shrinking of manufacturing employment is a global phenomenon.
In India, factory employment has already peaked due largely to automation. This is happening across the emerging world where labor is quickly being replaced by capital despite much lower wages.
