Commentary: Automation lurks behind Trump job promises

On October 15, a White House memo boasted a $13 billion investment in five Midwestern plants by automaker Stellantis. It also announced projects by Whirlpool, General Electric and others. Thanks to tariffs, Trump tells us, the prodigal sons of industry have returned.

But how does the scoreboard really add up for reindustrialization?

Not quite as advertised. These aren’t new factories; they’re old ones being retooled. Tariffs shoot manufacturers in the foot, since they drive up prices for supplies. Investing in new technologies takes skilled workers. This is a hard sell when ICE just deported over 300 Korean technicians from a Georgia car factory. Auto corporations, hearts full of liberal compassion, fear that “first they came for Hyundai.”

That said, there is a real attempt by both parties to “bring manufacturing back.” The truth is, this isn’t the same thing as creating jobs.

Putting America back to work?

The latest factories will be more automated than those of the past. For example, the Wall Street Journal reports that Hyundai’s latest auto plant in Georgia has a robot-to-human ratio of 2 to 1, compared to the 7 to 1 industry average. A study by the Society for Human Resource Management found that 23% of employment in direct production is mostly automated. While Trump promised booms in employment, the Bureau of Labor Statistics reported a loss of 12,000 manufacturing jobs in August alone. The Bureau predicts continued stagnation through 2034.

This trend is not new. In 1980, it took over ten hours’ labor to produce a ton of steel, and by 2018 this dropped to 90 minutes. Production levels have stayed constant, but the number of manufacturing workers has declined since 1979.

Automation not only reduces the number of jobs, it demands greater levels of education for the jobs it opens. Programming, overseeing, operating and repairing equipment often requires either college-level education or specialized training. Workers late in their careers, rural workers, or otherwise poor job-seekers are going to have a hard time accessing these skills.

Economist Robert Lawrence summarizes, “the sector should not be promoted as a vehicle of inclusive growth and employment for low-skilled workers.”

Falling rate of profit

Automation has sharpened the tendency for the rate of profit to fall. In order to undercut each other, manufacturers race to adopt the latest technologies. However, by doing so, they’re permanently raising the bar for machinery used throughout the industry (i.e. think the robot-to-human ratio discussed earlier). That means that a greater portion of their costs are constant. It’s impossible to squeeze an extra dollar out of a machine like it’s possible to exploit a human worker. The overall rates of profit can go down.

This can be seen in General Motors’ average annual operating margin, which went from 8.7% in the 1960s to negative numbers in the 2000s. Since 2008, car companies have been able to buck this trend to some extent. But this is the exception that confirms the rule: they needed help from Obama’s bailout and Biden’s subsidies. They’ve also slashed wages and relocated U.S. plants to union-busting states in the South. The 2023 strikers in the United Auto Workers know this all too well. But even in the past few years, automakers have seen their profit margins dip once again.

The race to the bottom is self-defeating. Low rates of profit make it harder to attract the finances needed to stay on the cutting edge.

Julius Krein, head of the New American Industrial Alliance, criticizes fellow capitalists for the big green dollar signs in their eyes. “During the last several decades, Americans found a way to financially engineer seemingly everything except for investments in critical techno-industrial capabilities,” he writes.

“Warning indicators are flashing red”

Because of this stagnation, more of the U.S. ruling class is ready for a heavier government hand. The prize at stake isn’t the average worker, it’s the average bottom line.

Oren Kass, chief economist at a conservative think tank, writes in Foreign Affairs: “Across the American economic dashboard, warning indicators are flashing red. The globalization and financialization of the past several decades have slowed investment, innovation, and growth. Industrial output and productivity have declined, and the United States has lost its leadership position in vital technologies – including in aerospace, energy, and semiconductors.”

It’s not just that lights are blinking on the dash, it’s also that capitalists won’t pay for a new car. “Simply put, the activities that generate the highest returns on capital are not the ones that have anything to do with building productive and innovative enterprises.”

Their solution is for the government to support gains that capital can’t achieve in the marketplace. Tariffs are one step of many. These are starting to compel manufacturers to invest in the U.S., which in turn forces companies to automate to avoid paying more workers. Industry representatives are also begging for subsidies and state-funded retraining programs. “Lead us,” the blind ask of the blind.

Salvaging jobs, or empire?

Attempts at reindustrialization have nothing to do with jobs and more to do with recovering profits. But above all else, it’s U.S. imperialism’s scramble against foreign competition.

Within U.S. borders, European and Asian automakers assemble more vehicles than the Detroit Three (Ford, General Motors, and Chrysler/Stellantis). Julius Krein complains that the U.S. is in the “middle of the pack” for overall automation levels.

China is leading the pack. The ruling class has come to admit the country’s economic superiority. “China has achieved advanced electrification with astonishing speed in part because of government support,” a recent Foreign Affairs article noted. “If the United States wants to achieve results like China, it will have to build more like China by replicating certain aspects of how Beijing organizes and mobilizes its production economy.”

In the same pages, former US Deputy National Security Adviser Nadia Schadlow recommends: “A commitment to reindustrialization would undercut China’s efforts to weaken the United States.”

The motivation behind attempted reindustrialization is clear – the U.S. monopoly capitalists face an existential threat from socialist China. And they can’t foot the bill to pull ahead. They are right to be worried. Modern manufacturing is central for everything from cars to drones to artificial intelligence. As much as Trump wants to sell the idea of some untapped potential for jobs, he won’t revive the factories of the 1950s. He’s desperate to shore up imperialism by milking what he can out of a declining industrial base.

#Opinion #Commentary #Labor #Automation #Trump #Jobs #Unemployment #CapitalismAndEconomy

Source: https://fightbacknews.org/commentary-automation-lurks-behind-trump-job-promises?pk_campaign=rss-feed