The real reason jobs left America
There will be much barely concealed anger at the G7 summit in Charlevoix this weekend, with the other six countries trying desperately to get U.S. President Donald Trump to call off his trade war.
Trump will not yield, because he believes that his tactics will “bring the jobs back” to America’s steel mills and other industries. And there can be no meeting of minds, because everybody else knows it wasn’t the foreigners who stole the American jobs. It was the computers.
Donald Trump got one thing right. The U.S. unemployment rate is far higher than the official figure, which is currently 4.1 per cent. “The unemployment rate is probably 20 per cent, but I will tell you, you have some great economists that will tell you it’s a 30, 32. And the highest I’ve heard so far is 42 per cent,” Trump said in September 2015, and he has returned to this claim dozens of times since.
As well he might, since it shaped the strategy that won him the election. The real U.S. unemployment rate is probably up around 17 per cent (see Nicholas Eberstadt’s 2016 book Men without Work), and it’s certainly a good deal higher than that in the Rust Belt. He targeted those desperate men and women, most of them traditionally Democratic voters, and turned enough of them to win Pennsylvania, Michigan, Wisconsin — and the White House.
But Trump was barking up the wrong tree about the cause of this devastating unemployment. Barack Obama nailed it in a speech in Ottawa in June 2016: “The steel industry is producing as much steel in the United States as it ever was. It’s just that it needs (only) one-tenth of the workers that it used to.”
Actually, it’s not quite that bad: one-fifth of the steelworkers still have their jobs. But that’s the story all over the Rust Belt: they are still making lots of cars in Detroit, but the employee parking lots are almost empty. This was the part of the U.S. that specialized in assembly-line manufacturing, and assembly lines are the easiest things in the world to automate.
So does Trump secretly know that the real job-killer is not free trade but robots? He would have to be monstrously cynical, knowing that, to launch a trade war anyway, so he probably doesn’t. But he can’t afford to know, in a sense, because if he acknowledged that the problem is automation he would be unable to promise a miracle cure.
This is big change, coming fast: the jobs truly are going, and not just in heavy industry. There have been at least a dozen studies in the past five years predicting a relentless, unstoppable decline in the number of jobs available, with a net loss of around half within 15 to 20 years. And why would it even stop there?
This is the point at which dystopian visions of a Blade Runner future start to intrude, and we really could end up in that sort of society in less than a lifetime if we make the wrong choices. But we do still have time to make better choices, and for that we owe a modest vote of thanks to Donald Trump.
The data that strongly suggested we were heading for a mostly jobless future was available years ago, but most people ignored it. It was too hard to deal with, and maybe it would never happen. Trump rubbed our noses in that reality by getting elected and showing us what the politics of mass unemployment actually looks like.
It’s not as extreme as the 1930s, or at least not yet, largely because we built the welfare states to take the sharp edge off unemployment after the last time round. But the populist virus is spreading fast: Brexit in the U.K., ultra-nationalist and racist parties prospering in the Netherlands, France, Germany and Austria, a new, full-bore populist government in Italy.
Most of the attempts to future-proof our politics are currently focused on developing various versions of a guaranteed basic income (Ontario’s pilot program being the biggest and boldest).
Maybe that’s enough to take the desperation and the humiliation out of joblessness, or maybe something else will be needed too. But at least we are now paying full attention to the change that is coming.
Gwynne Dyer’s new book is Growing Pains: The Future of Democracy (and Work)