The US is on track to overtake China as the most competitive manufacturing center in the world. For the first time in decades our manufacturing base is experiencing real growth. But this growth isn’t driving a resurgence in manufacturing employment.

And this story seems to be absent from the current political discourse. Sorry to tell you, but China didn’t invent global warming to make America less competitive. Sure, the rise in Chinese manufacturing took a number of jobs from the American economy. But that ignores a major macro trend — the rise of robotics and ai. According to Bank of America Merrill Lynch, industrial robots have grown by 72% in the last decade, while manufacturing jobs have fallen by 16%. The World Economic Forums projects that 5 million jobs will be lost to robots in the next five years.

The trend of mechanization in the economy isn’t new. WaWa, a regional chain in the northeast, has had computer assisted ordering for almost ten years. Automated Telling Machines have exploded across the world, reducing the number of employees banks need to have. Amazon runs a large portion of their warehouses with robots.

A study from Oxford University in 2013 found that nearly half the jobs in the American economy are at risk for mechanization. Major corporations are already playing out this trend to their favor. There have been huge layoffs, and jobs lost to automation don’t come back like those lost to cyclical trends.

Take a look at our nation’s labor force participation rate:
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We have been on a steady downward trend since 2000. Throughout the boom and the bust of the great recession, participation in our labor force isn’t coupled to economic activity. 35.4% of Americans rely on the government to live. This number doesn’t count pensions, unemployment, Social Security, or medicare. It’s time for our politicians to stop pretending that they can legislate their way to more employment by curbing trade China. It might just be that we are entering an era without jobs.

Sean

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