Driver For Automation (And Other Fallacies)

The recent “saved” jobs announcements, name-dropping Trump even when the decision had been made months earlier bother me. But the bigger picture is more troubling. There are a lot of off-shored jobs that cannot be threatened with tariffs. What retaliatory action can be taken when a company off-shores their customer support call center. Or data processing. Or coding. A vast majority of American jobs are not in manufacturing.

But, sure, let’s not focus on the bigger sectors being off-shored. As a manufacturer, you can go where the labor costs (as well as, I suspect, real estate / regulatory requirements / etc) are cheap and face a 35% import tariff. You can hire Americans and  increase your prices … but unless *all* foreign imports get taxed, that just makes you noncompetitive. You can hire Americans and reduce your profit … notwithstanding investor revolt, there’s a point at which you lose money on each product you sell. Or you build out an automated factory in the US – real estate and such may cost more, but your labor costs are REALLY low.

It might not have been cost effective to build a robotic manufacturing line in the US compared to overseas labor. Overseas labor – 35% tariff though … may well make automation cost effective without actually increasing manufacturing employment in the country. Learning how to program and maintain robots, though, may be a growing market.

Like the bank executives who got incredible bonuses while writing dodgy mortgages … in the short term, this does mean jobs are saved. A couple years from now, as the robotic manufacturing replaces those workers … they’re still unemployed.

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