Eighty-eight percent of job losses in manufacturing in recent years is due to an increase in productivity.
During the 2016 presidential election, voters may have heard about unfair trade deals with Mexico and China or about immigrants taking jobs from Americans.
In reality, these statements that were and still are prevalent in the political atmosphere are not entirely accurate.
Michael Hicks, the director of the Center for Business and Economic Research at Ball State, published a study called “The Myth and the Reality of Manufacturing in America,” which concluded that almost 88 percent of job losses in manufacturing in recent years is due to an increase in productivity.
“Part of it is through productivity growth that is associated with automation, just a machine, [another] part of it is better-skilled workers,” Hicks said. “Automation ate a lot of those poor, low-skilled jobs and created higher-skilled jobs.”
The rise in productivity growth is due to advancements in robotics, information technology and organization.
Hicks said a worker in a factory 40 years ago would have to know where everything was in the warehouse to replenish a workstation. Today, much of that task is automated.
The loss of manufacturing jobs isn’t a new phenomenon in the U.S. because the country has been losing these jobs since the late '70s. Since then, the U.S. has lost over seven million manufacturing jobs, according to the Bureau of Labor Statistics.
“You can talk all about trade, you can talk all about everything else,” Hicks said. “The bottom line is, we have never made as much stuff when you adjust for inflation as we are today, and we are doing it with fewer people.”
Hicks also pointed out that the U.S. has gained 9.7 million logistics jobs to move all of the manufacturing products being produced.
“The economy is responding in other ways," he said. “People who would have been working on farms 100 years ago, or factories 50 years ago, are now working in telecommunications, insurance companies, they are providing logistic services, they are doing something different.”
So what will the economy of the future look like?
Craig Webster, an assistant professor of family and consumer sciences, is doing research about service automation of robots in the hospitality and tourism fields.
“Robots and robot-based economics will dominate in the future,” Webster said.
He believes a robot-based economy will change how society conceptualizes the value of labor and take away a lot of undesirable jobs.
Webster said robots and automation is already here in the form of ATM machines, self-driving cars, automatic vacuum cleaners and even sexual services.
“The economy of the future will change a lot of things. How many people will be needed to do jobs? What will be the cost of humans?” he said.
Webster said he has only “known recession” throughout his life because the economy changes so fast.
“Since I’ve been in the market, jobs have been extremely scarce, difficult, low paying, very little upward mobility and the expectations of what you do on the job are much increased," he said.
With the increase in automation, the society of the near future will have to ask itself some tough questions about the roles of the human workforce.
Politically and socially, Webster sees a guaranteed minimum income, taxing people who have children and sterilizing percentages of the population to be possible topics of debate in the next 30 years or so.
“[People] will be envisioned by the economy and the political leadership as problems or issues to be dealt with and managed rather than assets," Webster said. “We have to figure out how to get people paid to not cause problems and to still consume.”
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