Manufacturing in America

Here we go again—who’s winning the war for manufacturing jobs? Man or machine? Human or robot? John Henry, the steel-driving man, or the steam machine?

Claire Cain Miller wrote the usual type of manufacturing article for The New York Times with the usual click-bait headline–Evidence That Robots Are Winning the Race for American Jobs.  Typically, there was no one from manufacturing quoted, only economists.

Later in my essay, I’ll take a look at where the best manufacturing writing is going on these days (aside from here, of course). Surprisingly, that place is TechCrunch. Founded as a blog-style (the first?) news source for Silicon Valley startups and VCs, it lost its way under AOL, but is getting better. I don’t look at trade journals for this sort of writing. Check it out.

So Miller writes

Who is winning the race for jobs between robots and humans? Last year, two leading economists described a future in which humans come out ahead. But now they’ve declared a different winner: the robots.

The industry most affected by automation is manufacturing. For every robot per thousand workers, up to six workers lost their jobs and wages fell by as much as three-fourths of a percent, according to a new paper by the economists, Daron Acemoglu of M.I.T. and Pascual Restrepo of Boston University. It appears to be the first study to quantify large, direct, negative effects of robots.

In one of the weirdest statements, she asks why productivity hasn’t been increasing, then rebutting her own thesis, she states, “In manufacturing, productivity has been increasing more than elsewhere.”

The study analyzed the effect of industrial robots in local labor markets in the United States. Robots are to blame for up to 670,000 lost manufacturing jobs between 1990 and 2007, it concluded, and that number will rise because industrial robots are expected to quadruple.

The paper adds to the evidence that automation, more than other factors like trade and offshoring that President Trump campaigned on, has been the bigger long-term threat to blue-collar jobs.

John Bernaden posted this article on LinkedIn, and I responded:

This study just puts some numbers on something that we’ve known for a long time–the days when an unskilled person can find a middle-class level job have passed. There do exist many blue-collar jobs, but the pay is not what it used to be. In my small town that is heavily industrialized, there are 370 job openings in local manufacturing (population of our county is 57,000). These jobs have been open for quite some time. Many people who are not now employed cannot pass a drug test. One manufacturer recently lamented that people show up for work, and then they don’t come back after a day or two. Other jobs do require at least some level of skill. I also recommend this Tech Crunch article, which is a balanced look at the benefits and drawbacks of automation. https://techcrunch.com/2017/03/26/technology-is-killing-jobs-and-only-technology-can-save-them/?ncid=rss By the way, TechCrunch and other new media are doing an excellent job of covering manufacturing whereas the New York Times and Wall Street Journal, which are otherwise good sources, don’t seem to have writers who have a clue about these enterprises.

Brian Heater writing in the above referenced TechCrunch article, Technology is killing jobs, and only technology can save them, noted that the presidential election rhetoric diverted attention from automation by pointing to trade agreements and globalization. He points out Treasury Secretary Steve Munchen dismissing the prospects of artificial intelligence and automation saying, “it’s not even on our radar screen…. 50-100 more years” away. “I’m not worried at all” about robots displacing humans in the near future, he said, adding: “In fact I’m optimistic.”

Heater continues: Colin Parris, the vice president of Software Research at GE, is refreshingly straightforward when speaking to TechCrunch about the topic. “Yes,” he says, matter-of-factly, “there will be job losses.”

It’s blunt, sure. But it’s refreshing coming from an executive at a company so heavily invested in automation. But Parris’ story, naturally, doesn’t end there. His long-term projections — and those of his peers in manufacturing — are actually a fair bit sunnier.

“The only way to fight [job losses],” Parris continues, “is to train the talent that we have. Because in the future, we have to embrace robotics. It allows us to reduce cost. If I reduce cost, I have more money that I can use for innovation. The more money I have, the more new products I can create. The more products I create, the more workforce I can hire.“

That’s a trend that certainly has historical precedent. Technology has had a major impact on the workforce dating back at least as far as the Industrial Revolution — when various tasks became more automated and the types of jobs available changed as a result. At the turn of the last century, 41 percent of U.S. jobs were in or around agriculture. A century later, the number had plummeted to 1.9 percent.

The discussion about training begins to get us on the right course.

First off, I believe that these people talking about robots have no idea what work they really do. They probably don’t even know about the current “co-bot” trend where robots and people collaborate on assembly tasks.

More importantly, the point missing from the discussion—and often from executive suites as well—concerns the value of people. Companies that value people as an asset, seek diversity, and encourage people to use their brains consistently outperform cost-cutters in the long term. There is automation, and there will be automation. Some things are just better done with a machine.

The John Henry story dates back probably to about 1870 to a contest held at a tunnel for a railroad in Virginia or West Virginia. John Henry beat the machine in drilling holes in rocks for placement of dynamite. But they he died from the stress. What we are discussing is not new.

Heater did come close to interviewing a manufacturing person for his more balanced article. “It might take employees out of what we call the ‘three Ds,’ a dull, dirty or dangerous job,” says Bob Doyle of the Association for Advancing Automation. But “[it] puts them hopefully in a different position that creates more value to the company,” he added.

Parris also cites the “three Ds” — referring specifically to flare stacks used to burn off the flammable gas from drilling operations in the Bering Sea. “These flare stacks are exposed to the elements because they’re out in the ocean, and you have to have people climb these things and look to see if there’s rust and corrosion,” Parris explains. “Who wants to do that? They’re dull, dirty and dangerous. It’s a huge problem.”

Heater’s conclusions, But technology has also been a major driver in helping keep companies competitive, so to shy away from it would surely only result in even greater domestic job loss. In order to move forward, we need to embrace technology both as a means of production and a method for producing new roles.

But pulling off such a coup is going to require some massive investments in education, both on the part of the corporations looking to move valued employees into new roles and an education system preparing workers for the real world. Failure to do so will only accelerate the growing rift between so-called low- and high-skilled workers, and the whole of our economy — and future — will suffer as a result.

There was a time we were optimistic about educating people for a better lot in life. Has our society become pessimistic? Hope is lost?

And I have to ask these questions above. Do we as a society no longer believe in the power of education?

I say that as a typical (well, sort of) American. But I know who does believe in the power of study and hard work. That would be immigrants, especially from Asia, but also South of the Border. I know that I’m bucking political winds with that statement. But those families come here, work hard, study hard, so that the children will be successful.

Too many Americans (far from a majority of course), well, they can’t pass a drug test.

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