It's Not Mexico That Will Ultimately 'Steal' Those Carrier Jobs

It's Not Mexico That Will Ultimately 'Steal' Those Carrier Jobs
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It's easy to understand why Carrier's decision under pressure to spare about 800 of its Indianapolis workers seemed like great news. The bad news? Over the next few years many of those jobs will be made redundant by improved technologies - according to no less a source than the parent company‘s CEO. That's one of the problems when government tries to pick winners and losers. It takes little time for the wins to turn into economic losses.

Days after Carrier announced its decision, parent company CEO Greg Hayes made it clear that many of those jobs don't have a long shelf life. Carrier will be investing $16 million - much of it from the taxpayers - in its Indianapolis plant. Hayes couldn't have explained the investment's impact more clearly: "(W)hat that means is there will be fewer jobs." To put that another way, government cannot buy jobs, it can only rent them.

Pressuring companies to stay put is a great way to create work - for robots. The solution isn't to cling to the jobs we have; it's to train people for the jobs we need.

Offshored jobs make news, but it is mostly robots and other technologies that make jobs redundant. In 1980, the Brookings Institution reports, it took 25 jobs to generate $1 million in manufacturing output in the United States. Today, it takes just 6.5 jobs. The job-shedding march of technology is by no means restricted to manufacturing. In the next few years, for example, the shift to self-driving cars will eliminate the jobs of millions of truckers, not to mention Uber drivers as the gig economy loses ground to the gigabyte economy.

According to the American Trucker Association, there are about 3.5 million truck driver jobs in the United States. If about a third are made redundant, that's more jobs than were saved by the auto bailout - and more than a thousand times as many as at the Carrier plant. Amazon Go, a chain of supermarkets set to open in about a year, will bill customers electronically - eliminating the need for cashiers. According to the Bureau of Labor Statistics, more than 850,000 cashiers are employed at U.S. grocery stores. Again, that comes to about a thousand times as many jobs as were reprieved at Carrier. Politicians sticking their finger in the dike may save a few drops of water, but it can't reverse a technological tsunami.

It is hard not to feel empathy for workers who are displaced by new technologies. But a lot more people will be hurt if we try to halt progress. GDP growth has been tepid during the current eight-year economic recovery, with growth rates in most quarters stuck below 2 percent. Unless that can be raised to a consistent 3 percent, the economy will be unable to bake a sufficient pie to ensure people won't be reduced to scrapping over the crumbs. But Baby Boomers are retiring, taking their corporate memory with them, and most Millennials have not yet acquired the education or experience to fully replace them. Enhanced economic growth depends on bigger, faster gains in productivity among those remaining in the workforce, and that in turn demands that more jobs leverage more technology.

There is an opportunity to train a workforce that can do that, in advanced manufacturing. Between 1980 and 2015, advanced manufacturing enjoyed an average 4 percent increase in productivity - five times the increase in non-advanced manufacturing. The Manufacturing Institute estimates that over the next decade 3.5 million manufacturing jobs will need to be filled - cutting edge jobs requiring leading-edge skills. But it also warns that more than half of them will go unfilled for lack of skilled labor.

Part of the answer to the conundrum can be found in Indiana, the very state where taxpayers' money was spent to stave off the elimination of a few hundred Carrier jobs. Manufacturers in the Hoosier state say they may be short a million high-skilled workers over the next few years. Technological progress makes some skills redundant, but it generates demand for others. When Subaru, for example, opened a plant in Lafayette, Indiana, in 1989, most every weld on a car was done by a human being, and the plant produced 88 cars a day. Today, the welding is performed by robots, and the plant produces 1350 cars a day. But the robots need human direction and troubleshooting, which is why Suburu is one of four manufacturing companies involved in a program with Vincennes University to provide extensive in-class and on-site training of people to manage modern production - including maintaining and programming robotic arms, troubleshooting technological hiccups, and writing program logic. This may turn out to be the true Indiana miracle: Rather than try to protect jobs, we should try to protect people.

Jaw-boning American companies won't save jobs, not enough and not in the long run. Training people for advanced manufacturing and other growth sectors will. We can't beat the future, so we had better embrace it.

 

Allan Golombek is a Senior Director at the White House Writers Group. 

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