Machines want your job!  Well, they would if they could feel desire.[1]  I guess I really mean that your employer wants your job.  Not for him/her self, or even for some idiot nephew/niece.  S/he wants it for a machine.  Liable to get it too.  Only about 13 percent (1/8-1/7) of job losses are the result of foreign competition.  The rest are the result of automation cutting the need for workers.[2]

Thus, in 1962, about 530,000 people worked in the American steel industry.  In 2005, about 130,000 people worked in the American steel industry.  That’s a 75 percent drop in employment.  However, steel production did not fall.  New technology of steel production just cut the need for workers.  More recently, computer and electronics manufacturing shed jobs thanks to automation.

However, in spite of the headlines in the New York Times, foreign competition really has taken away a lot of jobs from Americans.  China’s accession to the World Trade Organization (WTO) led to the loss of 2-2.4 million American jobs since 2000.  Apparel and textiles—the most basic products of any early-industrializing country—have suffered heavy inroads from foreign competition.

It isn’t likely to stop with manufacturing jobs, nor is it isolated to the United States.  In January 2016, one of those “we’re here to help” groups, the World Economic Forum, predicted that 5 million jobs in the top 15 economies world-wide will be lost to computer systems and robots by the end of 2020.  Two-thirds of the lost jobs will be in “office and administrative jobs.”  Already existing technologies could allow machines to do 45 percent of current work activities.  [NB: I don’t think that means 45 percent of jobs, just 45 percent of the work that many people do.  It wouldn’t be difficult to sell this as an improvement for anyone whose work includes a lot of drudgery that prevents them from doing higher-order work.]  “Work that requires creativity, management of people, and caregiving is least at risk.”

What are some of the implications of these changes?  They are both social and political.

Workers cast aside as a result of Chinese competition have had a difficult time adjusting.  As a group, they have a higher unemployment rate and reduced real income for the rest of their lives.  Also, apparently, they feel an impulse to vote for Donald Trump so as to send a wake-up call to the two mainstream political parties.  Trump and others have pandered to this by blaming immigration, and out-sourcing, and foreign competition for huge job losses.

In the past, workers flowed from declining sectors to growing sectors.  This didn’t go seamlessly: new workers who saw their parents displaced chose other lines of work, but the displaced parents had a hard time getting jobs in the “new” economy of that era.  In the past, economic change created new forms of manual labor for those without a lot of education.  This time, however, new jobs for men without college degrees have not arrived to help those displaced by change.

Perhaps more importantly, it isn’t clear that displaced workers want to adapt to new conditions and there is a policy interest in some quarters that wants to facilitate not adapting.  Thus, a story in the NYT says of one displaced worker that      “Many of the new jobs at factories require technical skills, but he doesn’t own a computer and doesn’t want to.”  [NB: That is, he doesn’t want to adapt.]  The policy proposals of many labor economists would accommodate this resistance to adaptation: strengthen unions (so that they can obstruct employer efforts to modernize production until foreign competition does what automation was not allowed to do); create more public-sector jobs (regardless of need); raise the minimum-wage (although this seems to contribute to the search for more automation); and increase the earned-income tax credit (essentially a form of welfare for the unadaptive).  Basically pay people to be unadaptive.  That is, create a market for people who resist change.  “If you build it, they will come.”

[1] “The bottom line,” The Week, 29 January 2016, p. 32.

[2] Claire Cain Miller, “What’s Really Killing Jobs?  It’s Automation, Not China,” NYT, 22 December 2016.