Technology Is a Major Cause of Job Loss

Offshoring Costs Americans Jobs, but Automation Is a Bigger Factor

Nov 9, 2008

Despite much-hyped fears of low wage workers around the world taking American jobs, the real culprit is increasingly intelligent machinery.

It is common opinion that American manufacturing is in decline, that Americans don't make anything anymore, but that common view is just plain wrong. Up until the recent financial crisis, America's manufacturing output was as high as it has ever been. When people decry the loss of U.S. manufacturing what is really being refered to is the loss of manufacturing jobs. And, it is true that the number of manufacturing jobs has been declining for decades.

Automation, Not Off-shoring

So, how is it that manufacturing production continues to grow, while employment declines? Listening to Washington policymakers, one might assume that all the manufacturing jobs have simply been moved to Mexico or China, but that's only a part of the story -- and not even the largest part. By far, the biggest factor impacting manufacturing jobs is technology and automation -- e.g. smart robots. Don't worry, it is not the Terminator or the Matrix Americans have to fear, but automation is capable of higher functioning tasks than ever before and the scope of work robots are able to manage grows every year.

Even as companies open new facilities in the United States, the expected job creation just is not at the scale people are used to seeing because so much of a factory's operation is automated. There are even dark factories being built that do not have lighting because no humans are working there.

Job Opportunities in America

Does this mean there are no more good jobs in America? No. It means the skills needed are not the same. It means the old low-skill manufacturing jobs are not coming back because of technology and lower-cost labor . And there is always lower cost labor, as Mexico and China are now finding out with factories in Singapore and Thailand taking jobs away.

Americans need to retool and focus on job opportunities that are going unfulfilled or are projected to grow over the coming years, rather than pining for the lost jobs that are not coming back. For example, workers are going to be needed to maintain and repair all those robots in the new factories and it is not going to be the janitor. Consider also that many companies are locating facilities based on energy and environmental concerns. Skills in these fields are only going to become more valuable. Many of these sorts of jobs do not require a college degree, but they do require skills and technical know-how.

So, let the robots have their day, but the proliferation of automation does not mean there is no future for the humans.

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