President Trump blames China and Mexico for stealing American jobs. But as Fred Katayama reports, economists say most jobs are lost to automation.
An abandoned auto parts plant in central Indiana symbolizes the fading fortunes of working class men. Then-presidential candidate Donald Trump got more than half the vote in the surrounding county as he accused China and Mexico of stealing American jobs. Some jobs have been lost to low wage countries and trade. But NOT by as much as Trump makes it out to be. Ball State University economics professor Michael Hicks says trade accounts for 12 percent of jobs lost; 88 percent was due to automation. SOUNDBITE: MICHAEL HICKS, ECONOMICS PROFESSOR, BALL STATE UNIVERSITY, (ENGLISH) SAYING: "Our study was fairly clear as I think others are that trade accounts for some manufacturing job losses but the majority of those losses in manufacturing jobs are due to automation and productivity." Take Carrier. Trump lashed out at the air conditioner maker and its parent, United Technologies, for planning to ship 2100 jobs to Mexico. The company compromised. It'll still move 700 jobs at this plant in Huntington, Indiana, south of the border. But it'll keep 1100 jobs at its Indianapolis plant and invest $16 million to automate it. Its CEO says ultimately, there will be fewer jobs. But economists say automation is a good thing in the long run by boosting productivity. Forrester Research estimates it will produce nearly 14 million new jobs in the next decade. Take Indiana - the state most reliant on manufacturing. Cummins, the engine maker, has added 9,000 jobs in the past five years as it boosted automation. This robot flips a two-ton engine in five minutes - a job that used to take 25 minutes using ropes and cranes. Darren Wildman is the operations leader in the Americas at Cummins. SOUNDBITE: DARREN WILDMAN, AMERICAS OPERATIONS LEADER FOR POWER SYSTEMS, CUMMINS, (ENGLISH) SAYING: "It helps employee safety, generates improved quality product. Those things obviously generate more jobs." But like many states, Indiana faces a skills gap. Georgetown economist Nicole Smith. SOUNDBITE: NICOLE SMITH, CHIEF ECONOMIST, GEORGETOWN UNIVERSITY CENTER ON ECONOMY AND THE WORKFORCE, (ENGLISH) SAYING: "The reason I'm concerned is that Indiana still lags national averages in terms of high school graduation rates, it still lags national comparisons of percentage of high school dropouts." Back at Cummins, it's taking a week or two longer to fill highly skilled positions than a decade ago. The company has teamed up with local schools to retrain workers. Amber Barnard is taking courses to pick up preventive maintenance skills. SOUNDBITE: AMBER BARNARD, CONTINUOUS IMPROVEMENT LEADER, CUMMINS, (ENGLISH) SAYING: "Machining, programming. You know, like when there's an issue when the machine has a problem, why did it happen, how do we prevent it?" Trump worries about offshoring, but Hicks says automation helps the U.S. keep jobs. SOUNDBITE: MICHAEL HICKS, ECONOMICS PROFESSOR, BALL STATE UNIVERSITY, (ENGLISH) SAYING: "That production dose all kinds of other things. It demands power. It demands transportation, so while we lost 7-and-a-half million manufacturing jobs since peak employment in the late 1970s, we've gained closer to 10 million logistics jobs." Trump has since toned down his rhetoric, saying the U.S. can renegotiate a trade accord with Canada and Mexico instead of scrapping it.