The great Midwest jobs lie of 2016
No matter how you measure it, 2015 was the record year for manufacturing production in the United States.
Right now, manufacturing in the Midwest and the nation is at record levels. There’s no ambiguity on this. Inflation adjusted dollars are the best measure, but in any available metric we are at record manufacturing production.
We’re just doing it with far fewer workers.
The Midwest has lost 2.5 million manufacturing jobs since our peak year of factory employment back in 1969. The U.S. has lost 7.5 million manufacturing jobs since 1977 when manufacturing employment peaked nationwide. These are simple facts deviously hidden in every public library in the country and on the internet accessible only by the 550 million smart phones and computers in use in America.
Did NAFTA cause these job losses? Well, NAFTA was implemented in 1994, so if Sen. Bernie Sanders and Donald Trump are to be believed, American firms must have anticipated NAFTA by some 20 years (so much for all that short-term thinking on Wall Street). Moreover, in the 45 years since peak manufacturing, the Midwest has created more than 6.1 million non-manufacturing jobs and the U.S. roughly 75 million jobs.
To be sure our trade deficits have cost us manufacturing jobs. The high-end estimates are that today we have 1.5 million fewer manufacturing jobs across the nation because of foreign trade. All the other 6 million or so lost manufacturing jobs are due to mechanization, better technology and better production practices. Today, the typical factory worker makes twice as much “stuff” in an hour as they did in 1977. For every manufacturing job lost to trade, nearly nine have been lost to machines.
But trade also creates jobs. We have 7 million more transportation and logistics jobs alone, likely attributable to trade since the 1970s.
Quite simply, for every manufacturing job lost since the 1970s we have had 10 created elsewhere, and for every job lost to trade we have 100 more jobs created elsewhere. This analysis isn’t fancy econometric modeling or theory. It is simple data and middle school algebra. Every campaign knows it well, and every voter should.
The “bring jobs back” promise is simply a lie. It isn’t factory workers in Juarez or Beijing who’ve stolen factory jobs. The folks with master’s degrees in robotics working in Palo Alto have taken those jobs. The only way to get those jobs back is to adopt Sanders’ energy policies, which will leave many places without electricity.
There may be noneconomic reasons to support these candidates (a Syria invasion perhaps, or heat-free Tuesdays in February), but Midwest voters looking for a return to the 1960s factory scene richly deserve the bitter and lasting disappointment that awaits them.
Michael Hicks is the director of the Center for Business and Economic Research and the George and Frances Ball distinguished professor of economics in the Miller College of Business at Ball State University.