Monday, February 20, 2017

Blame automation technology not the North American Free Trade Agreement (NAFTA) for the loss of manufacturing jobs in the US

It is very doubtful that increasing protectionist policies as currently advocated in the US can overcome the forces of automation in manufacturing. 

ICMS, Inc Reports
Tom Okure, Ph.D.
February 20, 2017

Surveys and research findings strongly indicate that the loss of manufacturing or factory jobs in the United States (US) is a consequence of increased automation rather than international and regional trade (NAFTA). 
Robots in action on the Jaguar XE production line in Solihull
Under these circumstances, it is very doubtful that increasing protectionist policies as advocated by the current Trump administration would overcome the forces of automation. Research results over a long period shows that 80 to 88 percent of factory job losses in the US are attributable to robots (automation) and other corporate decisions that lessen the need for human labor input in manufacturing.

The North American Free Trade Agreement (NAFTA) is an agreement among the United States, Canada and Mexico designed to remove tariff barriers between the three countries. The Trump administration blames NAFTA for US job losses and is beginning new negotiations with its Canadian and Mexican neighbors designed to improve the trade level playing field in favor of the US.

It should be clearly pointed out that US labor force and employment levels are generally affected by many domestic factors including economic growth; demographics; cyclical and structural factors; labor unions; education and training; innovation and industry consolidation factors.

A November 2016 CBS news report stated that “A study at Ball State University’s Center for Business and Economic Research …. 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.”

Despite the overwhelming research evidence, surveys of displaced factory workers, most of which in favor of Trumps new protectionist agenda for the US tend to blame NAFTA and global trade between the US and other countries rather that factory automation for the loss of jobs. Nevertheless, people surveys indicate that many displayed workers do welcome factory automation for various reasons including increased skills training it offers employees to operate and maintain the robots, increased efficiency in assembly line processes and the reduction of injuries in manufacturing processes as a result of the use of robots.   

The campaign and eventual election success of Donald Trump as US president was centered on faulting countries like China and Mexico for stealing millions of jobs from the United States. There has been allegations by Trump that “we don’t make anything anymore.” But according to many experts, the truth is manufacturing is still flourishing in America.  According to The Associated Press, “the problem is, factories don’t need as many people as they used to because machines now do so much of the work.”

Ford motors is one of the first manufacturers
to wholesomely accept automation
The desire and quest to produce more efficiently with fewer human input has a very long history in US manufacturing. The US automotive industry and more specifically Ford motors is one of the first manufacturers to wholesomely accept automation.  Over the decades, the global automotive manufacturing sector has witnessed and benefited from enhanced technological improvements in robotics. Today, the automotive industry utilizes more precise and more multi-functional and smaller robots in automotive manufacturing applications.  Globally, automation has become indispensable in the manufacturing process.

Rising costs connected with next-generation automotive materials, safety systems and skilled labor coexist alongside a need for manufacturing equipment to accommodate product changeovers. From parts, press and paint shops to assembly and inspection, there has developed over the decades a convincing case for flexible, cost effective automation solutions at every step of the automotive manufacturing process.

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