Automation often takes the blame for lost manufacturing jobs when automation might be a key component in revitalizing manufacturing! We know years of trade imbalances and competition with China have contributed to the large-scale job loss of manufacturing in addition to a 2018 study conducted by W.E. Upjohn Institute Vice President and Director of Research Susan N. Houseman.

Debunking the Myth “Automation Causes Job Unemployment”

Houseman's research reveals how manufacturing has suffered when a sub-sector of manufacturing, the computer industry, was factored out of the research… though not due to automation as widely believed.

The strength of real manufacturing output is nearly dominated by computer and electronic products. The study found manufacturing’s real GDP growth was 63 percent of the average private sector from 2000-2016. When the numbers from the computer industry was dropped from the data, manufacturing’s real GDP growth was only 12 percent of the average private sector, which reveals obvious disparities in manufacturing industries and suggests automation is not the cause of manufacturing job loss.

Houseman encourages economists to not dismiss trade and the role it has had in manufacturing jobs, productivity and investment. “Economists and politicians who deny the effects of globalization on U.S. manufacturing are standing in the way of a much-needed, better informed debate over trade policies,” she writes.

How Can Automation Help?

In 2017, the highest rate of industrial robots per 10,000 manufacturing employees were all found in countries known for their robust, high value-added manufacturing sectors such as South Korea, Japan, Germany, Italy- and Sweden. The United States comes in at seventh on this list.

Automation should be designed to work with workers to enhance manufacturing, not dominate manufacturing. The integration of technology and manufacturing is good for both employees and employers. Technology is not a direct substitute for labor.

Two days after the mid-term elections, The Washington Post published an analysis under the headline “These wealthy neighborhoods delivered Democrats the House majority.”  That headline is false in several different ways, but it is being repeated among a large group of the punditry because it fits into a class narrative that sees affluent, college-educated white people who live in suburbs as citadels of tolerant decency while white folks without bachelor’s degrees, wherever they live, are wall-to-wall racist and sexist xenophobes.

There is some evidence for that narrative, as whites without bachelor’s degrees (who in electoral analyses are called “the white working class”) are among President Trump’s strongest supporters.  According to nationally aggregated exit polls, they voted for Trump by 37 points in 2016 and for GOP House candidates by 24 points in 2018.  In contrast, “educated whites” gave Trump only a 3-point advantage in 2016 and then flipped to Democratic candidates by 8 points in 2018.

A significant section of the punditry, including many Clinton Democrats, have latched on to this phenomenon to argue that the whole ballgame for the Dems, in 2018’s blue wave and for 2020, is about winning traditionally Republican suburbs while ignoring what’s left of their traditional base in the white part of the working class.  An important political shift is happening in suburbs, where half of all voters live,  but it is only one part of what generated the blue wave, and these suburbs are much more diverse and complicated places than the punditry allows.

The Washington Post analysis, for example, focused on six suburban districts outside Minneapolis, Los Angeles, Atlanta, Dallas, Richmond, and Washington, D.C., which voted for Hillary Clinton in 2016 while also sending Republicans to the House of Representatives.  All six, along with similar traditionally Republican suburban districts, flipped to Dems earlier this month.  These kinds of districts definitely played an important role in Democrats winning the House, and we should celebrate every country-club Republican who is outraged by Trump’s nationalist mendacity, racist dog whistles, old-fashioned male supremacy, or just plain crudeness.  But these districts are much more complicated than the “wealthy neighborhoods” contained within them, and most importantly, they are only one part of how the Democrats won the House.

Many of us are ill-informed about certain critical economic and social issues. The following facts should have been reported by the mainstream media, but unfortunately most of that media is controlled by the very people who have reason to hide the facts. 

Tax Haven Cheating is Much Costlier than the Annual Safety Net—But the IRS Keeps Getting CUT 

Offshore hoarding of private American wealth is estimated to be $3.3 trillion (4% of U.S. $82 trillion financial wealth). 

The safety net costs about $400 billion per year, or, including Medicaid, about $900 billion per year. 

Taking on the tax cheaters seems like an obvious response, instead of cutting the safety net. But the IRS budget itself has been steadily cut. Amazingly, and perversely, the Internal Revenue Service, which could be recovering much of our hidden money, has seen its staff and budget slashed 14 to 18 percent since the recession.

Our Own Country is the World's Second Biggest Tax Haven 

While the privileged American tax cheaters are taking money from their own country, they're not shy about taking from the rest of the world. According to the Financial Secrecy Index of the Tax Justice Network, the U.S. is second only to Switzerland as a tax haven. Their report states: "Financial secrecy provided by the U.S. has caused untold harm to the ordinary citizens of foreign countries, whose elites have used the United States as a bolt-hole for looted wealth." 

These are good times for those at the top of the Walmart empire. Family members of the founders have seen their wealth grow about 10,000% since the 1980s. Today the Waltons are worth about $180 billion. And they own so much Walmart stock that four of them made $12.7 billionin just one day last year after a profit report bumped up their share price.

For Walmart CEO Doug McMillon, those strong profits turned into a $22 million paycheck.

But those at the top of the Walmart empire are not sharing the wealth. The CEO’s pay was 1,188 times as much as the pay for a typical Walmart employee.

And even after the Republican tax “reform” that was supposed to be so great for workers, Walmart still refuses to pay a living wage. Instead, those tax cuts are making already rich CEOs and shareholders even richer.

How is this happening? Walmart and other big U.S. corporations are using huge chunks of their tax windfalls to buy back their own stock.

These buybacks have no redeeming social value. They simply artificially inflate a company’s share price. That helps the rich who own the vast bulk of stock. At Walmart, the Walton family owns about half.

Buybacks also boost executive pay, since most of it is based on stock.

In other words, whenever companies go on a buyback spree, the rich just get richer.

Walmart announced plans in 2017 to spend $20 billion on stock buybacks over a two-year period. What if they spent some of those billions instead on worker pay? Berkeley researchers estimate it would cost Walmart less than $5 billion a year to raise its minimum wage to $15 an hour.