The great Trump job hoax

Hence he promises that workers who lost their jobs, say, in coal mines because of the fear of climate change, will be reinstated and the mines reopened.

Also he will build a wall between Mexico and the US to prevent illegal immigration — an influx of which into the US will threaten the jobs, increase competition, of the lower paid.

The President-elect will also renege on international trade agreements, eg North American Free Trade Agreement (NAFTA), and high tariffs will be placed on imported goods from Mexico and China; he will scrap the emerging Pacific Trade Agreement and will do whatever it takes to force US companies to return their manufacturing to the US particularly from China and Mexico, again by import tariffs. The ill effects of globalisation, according to Trump, will be reversed. The US will become great again.

Indeed, the figures do show that the number of manufacturing jobs in the US increased in the years after NAFTA (1994). But there was a dramatic fall-off after 2000, when it dropped from some 20 million to the present figure of 12 million. Trump and Bernie Sanders blame China for putting US workers out of work because of cheap labour. But there is a more fundamental factor, technology: robots, artificial intelligence, machines are also replacing workers.

This loss of manufacturing jobs would have happened regardless of trade globalisation.

Recently I wrote an article, “When the robots do the work”, in which I referred to the Fourth Industrial Revolution which is being driven by massive automation, cheap sensors, immense connectivity, synthetic biology that are all having a revolutionary impact on how we do business, on how the economy works; more so its impact will increasingly be the polarisation of labour as the low-skilled jobs are automated and the same spreading to the middle class.

Schumpeter, a celebrated economist, told us this long ago when he declared that a sustainable economy is about creative destruction driven by man’s inventiveness in which firms will become obsolete and die, and are replaced by new ones doing both existing things differently and more efficiently and new things — for example with the advent of the automobile the blacksmith trade became obsolete; the blacksmith lost his job.

In the US now a great shift is taking place.

In the past workers moved from the fields into the factories. Now, in this Fourth Industrial Revolution, they are moving from factories into construction, healthcare centres, service counters. The fastest growing jobs in the US are now nurses, personal care aids, cooks, waiters, retail sales people, construction workers, operation managers — all jobs that computers are incapable of doing.

What globalisation has done is simply to speed up the current great shift.

What Trump intends to do will not reverse the technology, nor will it hold back the revolution. In fact the imposition of large taxes on Chinese and Mexican goods imported into the US could put that economy back into recession — making many items more expensive for the US working class and encourage global trade wars. Many seem to forget that Trump’s tariff scheme was tried before in the 1930 Smoot-Hawley Tariff Act, which raised tariffs on some 20,000 imported goods into the US.

According to Ben Bernake, “Economists agree that the Smoot-Hawley Act and the ensuing tariff wars were highly counterproductive and contributed to the depth and length of the then global depression.” Indeed, some manufacturing jobs have been replaced by others and the US economy is close to full employment.

Surely there are some replaced workers who are near retirement age who are too old to be retrained, or change jobs. There are others who are ignorant of the dynamics of the economy in which they strive to survive.

However, with the reticence of the US intelligentsia to talk to the people of the US, Trump and Sanders took advantage of fear and ignorance of the working class for political gain.