President Trump has pledged to be the greatest jobs producer that God ever created, and there’s one type of job he seems to value above all others: manufacturing.
For Trump, as for many Americans, companies that bang out goods on the factory floor have a special place in the economy. It’s a reminder of what made the country great and a source of hope for those left behind by automation and globalization.
But is this sound economics, or just nostalgia?
It’s true that jobs in the manufacturing sector tend to be “good” jobs, with higher pay and fuller benefits than the US average. But manufacturing isn’t what it used to be. And not just because millions of jobs have disappeared, but because the ones that remain offer fewer advantages — especially for Americans who don’t go to college. They used to be the greatest beneficiaries of manufacturing’s onetime largesse.
That poses a real problem for Trump. Even if his administration manages to revitalize manufacturing, the rewards may not reach his working-class supporters. The production jobs of tomorrow are likely to require higher education, while those open to lower-skilled workers may lack security and strong wages.
Why manufacturing jobs aren’t as good as they used to be
People who work in manufacturing tend to get bigger paychecks than those in other industries. But the payoff depends a lot on where you fall on the education ladder — and on the organizational chart.
For the past 50 years, the manufacturing sector has been slowly turning against lower-skilled workers and high school graduates. A Globe analysis of census data shows that in 1960, non-college-educated workers in durable goods manufacturing earned 100 percent more than their peers in other industries. Not even college graduates could gain so big an advantage.
Today’s high school grads out-earn their nonmanufacturing peers by just 60 percent, and there are far fewer jobs for them.
Even this may overstate the benefits of a manufacturing job, since a lot of the “pay premium” goes to people who are working far from the factory floor. Sales representatives and lawyers are the ones who benefit most from being connected to a manufacturing firm.
Meanwhile, nonsupervisory and production-level employees in durable-goods manufacturing actually earn less than similar workers across other fields, and recent research has found that one-third of frontline production workers rely on some kind of government assistance.
If you’re wondering why lower-skilled manufacturing workers are being squeezed, think about how the world has changed since 1960. Back then, major US manufacturers such as the Big 3 auto companies didn’t face nearly as much competition from abroad. That meant more market power, greater room for profits, and ample space for unions to squeeze dollars into workers’ pockets.
But competition from Japan broke Detroit’s comfortable hold on the auto industry, just as competition from China has eroded profits among other US manufacturers. And even where profits remain high, unions have fallen low, meaning less leverage to demand good wages for low-skill employees.
Why Trump may struggle to bring back good jobs
Between his call for tariffs, his resistance to existing trade deals, and the direct pressure he has put on US companies considering relocating, Trump has shown a real willingness to breach the bounds of normal economic policy to boost manufacturing.
And while it’s hard to predict the impact of Trump’s unorthodox approach, it’s possible he’ll hit upon the right recipe to spur hiring, encourage domestic expansion, and even get some companies to bring offshore jobs and factories back home.
But it’s not clear these new manufacturing jobs would be the “good” jobs of old.
Think about why companies set up shop overseas to begin with. In most cases, it was for cheap labor. That’s part of the point of free trade: It allows companies to move their routine work to low-wage countries and focus on higher-productivity tasks here.
If these companies decide to move their operations back to the United States, they face a choice: Replace their truly low-wage Chinese or Mexican workers with lowish-wage American workers, or replace them with machines.
Neither scenario is particularly good for American workers on the low end of the pay scale.
Automation helps robot makers and robot programmers, but not the high school graduates who propelled Trump’s surprise victory in November. And even when companies decide to use US workers, the benefits may be limited. To minimize the additional labor costs, companies will need to hold down wages — and it will be hard to fight back without the powerful unions that once gave low-skill workers such formidable leverage.
Worse, the threat of automation is itself a powerful bargaining chip. Every time workers push for higher wages, they unwittingly make it more cost-effective for companies to employ machine replacements.
Don’t favor manufacturing, just promote good jobs
Manufacturing jobs are a means, not an end. And the real goal of economic policy isn’t to boost one sector or another. It’s to get more Americans into jobs with decent pay and benefits. No more living hand-to-mouth, no more worrying about how to fix the muffler or pay the doctor.
Moving forward, many of the best opportunities for people without a college degree will emerge far from the factory floor, in areas like health care.
So while Trump certainly has the tools to bring manufacturing companies back to America, that won’t necessarily translate into a flood of good jobs. Automation could mean more plants with fewer workers. And those who do find work will still have trouble getting decent wages, now that manufacturing unions have lost their hold.
Evan Horowitz digs through data to find information that illuminates the policy issues facing the nation. He can be reached at firstname.lastname@example.org. Follow him on Twitter @GlobeHorowitz.