, 24 tweets, 8 min read
1/Today's @bopinion post asks: Which is the job-killer, trade or automation?

In other words, who was right, Elizabeth Warren or Andrew Yang?

2/@APFactCheck sided with Yang and said Warren was wrong.

But @APFactCheck is relying on some very dodgy research, and it doesn't understand the question very well.

3/First, let's get one thing straight.

The overall drop in employment since 2008 was caused by two things:
1) a huge recession, and
2) aging and the retirement of the Boomers

Not automation or trade.
4/OK but what about manufacturing jobs specifically?

In the U.S., like in all rich countries, the percent of the population employed in manufacturing has fallen and fallen.
5/This was caused by two things:

1) productivity improvements (including automation and process efficiency improvements)

2. a shift in demand growth from physical goods to services
6/BUT, despite a decrease in the PERCENT of Americans working in manufacturing, the NUMBER remained pretty constant.

...Until 2000.

What the heck happened??
7/Some people think we had a sudden burst of automation in the 2000s that killed a huge # of manufacturing jobs.

For example, the paper that @APFactCheck loves to cite, by Hicks and Devaraj, makes this claim:

8/But this paper has MAJOR PROBLEMS.

9/First of all, the paper doesn't actually talk about jobs that people lost.

When it says "job loss", it means job loss RELATIVE to the number of jobs in a hypothetical simulation in which productivity didn't improve at all!
10/According to Hicks & Devaraj's estimates, if productivity hadn't increased at all in the 2000s, we would have added millions upon millions of new manufacturing jobs!

That's pretty unrealistic. That's a red flag.

11/In fact, research by Susan Houseman suggests that Hicks & Devaraj just got their productivity numbers wrong.

12/OK so what percent of the actual manufacturing job losses of the 2000s were caused by trade?

Maybe 2/3.

13/The best paper on this topic is probably the one by Acemoglu, Autor, Dorn and Hanson.

They find that China trade reduced manufacturing employment in the U.S. by about 2 to 2.4 million jobs.

14/And other credible research also finds a very big effect of trade on manufacturing jobs in the 2000s.
15/So if we're talking about the 2000s, Warren was more right than Yang.

Automation was happening as in previous decades, but China trade (and then the recession) was the biggest reason America lost manufacturing jobs.
16/BUT, that was the 2000s.

What about NOW?

There is good evidence that the China Shock is OVER. Chinese competition is no longer destroying U.S. manufacturing jobs.

17/How about automation?

Well that definitely isn't destroying any more manufacturing jobs right now, since labor productivity in manufacturing is completely flat.
18/Has automation been destroying jobs in the wider economy in the last few years?

In a word: No.

To elaborate: No no no no no.

19/If you think automation has been killing jobs in the U.S. economy, read this now:

20/The robot threat could materialize in the future.

Eventually we could automate away service jobs, and all jobs, and robots and their owners could inherit the Earth.

But as of now that future is still SCIENCE FICTION.
21/Instead of arguing about "robots vs. China", we need to focus on turning service jobs into good jobs:

22/And we need to focus on promoting U.S. science and technology and industry:


23/And we need to focus on strengthening the social safety net.
24/Chinese labor competition is the problem of the past.

Robots might or might not be the problem of the future.

But right now, our challenge is to strengthen the safety net, strengthen labor power, and strengthen U.S. technology and industry!


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