But SoftWear’s business, along with so many others across the US, should remind Trump of a factor he has yet to acknowledge: the role of automation in reducing the number of manufacturing jobs available. Rajan’s firm employs just 20 people, though he plans to hire 15 more in the coming year.
That fits a nationwide pattern of manufacturing output hitting record highs in recent years, even as manufacturing employment continues its steady decline.
But one study from Ball State University finds “almost 88% of job losses in manufacturing in recent years can be attributable to productivity growth, and the long-term changes to manufacturing employment are mostly linked to the productivity of American factories.” In other words, robots, not outsourcing or trade competition, are the culprit.
Others are less sanguine. A 2014 study from MIT’s Daron Acemoglu, David Autor, and coauthors found “net job losses of 2.0 to 2.4 million stemming from the rise in import competition from China over the period 1999 to 2011.”