Excepting this “recession” I keep hearing about, if you asked the average American “where have all the jobs gone?” they would likely say “China.” There’s also a high probability that they would further denounce those damned top hat-wearing plutocrats who shipped our jobs overseas, and the complicit politicians who permit said evil.
We need to establish two very important things. First, most manufacturing jobs which have disappeared over the last thirty years weren’t stolen by foreigners. Most were stolen by robots. Automation has far outpaced offshoring in terms of jobs America has “lost.”
If you’re a factory worker, you should be a lot more concerned about robots than a Chinaman. The Chinese are far less likely to take your job than automation is. Most anyone can be replaced by robots; Google will probably figure out how to automate Congress eventually. (If we’re lucky). And that’s just fear of unemployment– we’re not even going into “robots decide to kill humanity” scenarios here.
Next, those comparatively few jobs which have been shipped over to China and India have created positive effects. They make the stuff you buy cheaper. They also help lift poverty-stricken people out of destitution by providing jobs. As an additional bonus, the more we trade with the Chinese, the less likely we are to ever get into a nuclear war with them. (See “Heaton’s Theory of Peace through Free Trade/Extramarital Affairs.”) Someday, when the robots we’re cranking out finally rise up against us, the Chinese might help us fight them, what with all our chummy commercial ties.
When I say that offshoring makes stuff cheaper, you might respond with, “You’re greedy and unpatriotic. I would gladly pay more for my Nintendo knowing that it came from hard-working Americans, and not some blasted foreigner.” Good for you, patriot.
How much would you pay, exactly?
According to Tim Worstall of Forbes, if Apple decided to relocate its entire iPad assembly line to the United States, it would return 67,000 jobs to our shores. So your sacrifice could indeed bring livelihood to many of our fellow citizens.
Of course, if Apple pulled such a maneuver, they would also have to pay minimum wage to their American employees. Plus employer-side social security contributions. And healthcare insurance, a more onerous regulatory burden and a far steeper corporate tax rate. Basically all of the costs which initially compelled Apple to head to China in the first place.
To put this in perspective, an iPad 2 presently costs $400. According to The Atlantic, if we produced them in America, an iPad 2 would cost $1,140.
Presently I can’t afford to purchase a $400 iPad 2. I’m certainly not going to buy a toy to watch funny YouTube videos on if it’s more expensive than my first car. Many folks would likely feel the same. That very large swath of consumers unwilling to shell out $1,400 for a glorified iPhone would mean less sales for Apple, which would mean fewer factories, which would in turn lead to firing a significant portion of those 67,000 workers.
Whatever device you’re reading this post on would have cost about three times more to produce in the United States were it not for offshoring. Maybe you could do without your cell phone or your Kindle. Kudos, but what about shoes? I ask because an impoverished American family does not have the option of foregoing the purchase of shoes, should Nikes and Reeboks rise in cost dramatically.
But this talk of offshoring jobs is all incidental anyway. In terms of sheer numbers, far more jobs are rendered irrelevent by technology and progress than are actually shipped abroad.
Technology develops exponentially. Greed and progress forever tango across the glorious dance floor of economics, rendering production costs cheaper and more efficient. In the last fifty years their partnership has killed more jobs than every Chinese sweatshop combined. But progress has also created new jobs simultaneously.
In 1810 farmers made up at least 70% of the U.S. Population. Now they make up less than 3%. Yet we’re producing more food now, with fewer farmers. Because progress has rendered much of the manpower needed to sustain that particular industry obsolete. Ditto for manufacturing.
Consider that if you wanted to make a death threat over the phone in 1902, you had to pick up the receiver and ask an operator to connect you to your boyfriend’s line. That operator sitting at a switchboard got automated. Now you just dial the number yourself.
Similarly, repetitive motions like banging a hammer into a nail aren’t terribly difficult to replicate with robots. Robots have a knack for that sort of thing. Thus a car factory replaces “guy who puts sticker on window” with a robotic arm that slaps a sticker on a window.
Since robots are programmed with logical algorithms, they never bother forming unions, and are thus a good deal cheaper than employing the guy who just got downsized. Now the factory has fifty people instead of one hundred, the shareholders earn more money and also sell the car cheaper to outperform less efficient car manufacturers. (Like General Motors. GM did not make use of inexpensive robots, eventually needed a bailout, and so now your tax dollars are paying off their pensions.)
If tomorrow Congress did everything in its power to lure manufacturing jobs back to the motherland like prodigal blue-collar sons, only a handful would show up for the fatted calf. And they’d carve up the beef with a knife lovingly assembled by robots.
We haven’t outsourced most jobs. We’ve automated them.
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