BRINGING BACK JOBS
With so much speculation in process over the Trump economy, I was drawn to a column by a formidable commentator, George Will in The Washington Post. There’s no doubt that Will is an informed voice for economics for several decades, and I respect his views.
The subject of his recent column was a challenge to President Trump’s campaign to bring jobs back to the United States from abroad. Will contends that history shows saving jobs is usually costly. First there are the numerous free-trade deals that have to be modified, then there’s the higher labor cost in America.
With labor in India, Mexico, some parts of China and other Asian countries for routine manufacturing so much less than in America, many of the U.S. major manufacturers use robot technology for assembly line industry and consumer products. Many of these jobs cannot be brought back as the assembly line worker is replaced by robot technology.
It just isn’t possible to make America great again by returning to a 1953 economy. America was great then because so much of the rest of the world was still recovering from the devastation of World War II. Now those nations are major competitor in producing products at a cheaper prices to meet the demands of the American consumer shopping for deals at the mall.
A study by Ball State University reported 5.6 million manufacturing jobs were lost between 2000 and 2010. That accounted for 13% of job losses, whereas productivity improvements accounted for more than 85% of those job losses. Again the prospect of returning jobs to America is diminished because of technology. The same thing happened beginning in the late 19th century when the portion of the workforce in agriculture declined from 40% to 2% as a result of the Industrial Revolution.
Who knows what the changes and improvements will be in the next two decades with the rapid growth of automated intelligence and information technology? The digital age of this century will make many changes in the workforce and require higher levels of education and skills to qualify for a job.
If the Trump economy wants to bring back jobs, skilled labor workers need to have assistance to train for jobs in the digital world. Here is an opportunity for educators to develop on the job training combined with internet schooling. No need to go to college for a degree and a big loan debt.
Other threats to the success of the Trump economy are protectionism and reversing financial regulations. Sweeping changes or breaking international trade agreements will upset globalization. Trump has promised to renegotiate NAFTA and possibly impose border tariffs on goods shipped from Mexico and Canada. His proposal for the foreign trade agreements are even more drastic and have the international markets in a whirl of confusion.
Whatever comes up before Congress and by executive order concerning regulations of banking and international trade, investors and American industry leaders are optimistic that changes will improve corporate profits and consequently the nation’s economy.
With new horizons opening up, corporate leaders are adapting to new management style. There are those companies that are run for the best interest of stockholders and there others that have goals to maximize corporate profits and potentially the executives’ bonus compensation plans and stock option rewards.
The populist movement criticizes corporate America doing business overseas for better profits and less taxation, but it is not illegal. Executives know that shareholder value comes in shades of gray. It has been a century since the idea became law by a 1919 court ruling that “a business corporation is organized and carried on primarily for the profit of the stockholders.”
This can thrust President Trump into a conflict of interest. He is a businessman working for profits while politically challenging American business making a profit overseas. How does that support his plan to bring back jobs?