Trump’s Failures and Lies about Manufacturing Jobs
posted by Robert Shapiro on September 24, 2020 - 9:14am
To hear President Trump describe it, “the manufacturing sector is booming,” and “we’ve witnessed one manufacturing miracle after another.” These paeons to his own success with manufacturing are the economic equivalent to his claims that he has masterfully handled the pandemic. In fact, under his presidency, foreign outsourcing by U.S. manufacturers rose frighteningly f while the number of U.S. manufacturing workers fell sharply. Under Barack Obama, U.S. manufacturers cut back substantially on outsourcing, and manufacturing jobs at home rose sharply.
Trump’s grim record on outsourcing is a testament to his failed trade wars. He slapped tariffs on imports from our major trade partners, including China, Mexico, Canada, and all of Europe, as his way of encouraging American multinational companies to downsize their foreign operations and produce more here. He failed. The most recent data from the Bureau of Economic Analysis show that during Trump’s first two years in office, as he imposed the tariffs (2017 and 2018), employment by the foreign affiliates and subsidiaries of U.S. manufacturers jumped by 257,400 jobs, including 58,700 more outsourced jobs in China, 26,300 more in Mexico, and 112,100 more jobs across Europe.
Job Outsourcing by U.S. Manufacturers under President Trump and President Obama
Economists warned that Trump’s tariffs could backfire. They were right: Other countries retaliated with new tariffs on U.S. exports and, in any case, the tariffs could not offset the savings from producing abroad for foreign markets. Instead of tariffs, Obama had focused on enforcing trade laws and respecting our treaties. During the two years before Trump took office, 2015 and 2016, foreign outsourcing by U.S., manufacturers actually fell by 90,300 jobs worldwide, including 27,800 fewer U.S. outsourced jobs in China, 50,900 fewer in Mexico, 12,700 fewer in Canada, and 153,300 fewer in Europe.
The pandemic and Trump’s unapologetic mismanagement of it also have been an additional blow to U.S. manufacturing workers. American manufacturing employment declined by 237,000 jobs from January 2017 to August 2020. Unhappily for Trump, most of those job losses have occurred in six states critical to his hopes for a second term. The latest data show that since Trump took office, U.S. manufacturers have downsized by 77,400 jobs in Michigan, 31,400 jobs in Ohio, 28,900 jobs in North Carolina, 24,000 jobs in Pennsylvania, 14,700 jobs in Minnesota, and 11,900 jobs in Wisconsin. All told, manufacturing employment in those six states has fallen, thus far, by 188,3000 jobs under Trump. It is another sea change from the comparable period under Obama, when those six states added 126,700 new jobs in manufacturing.
To be fair, two other states that could matter a great deal on November 3rd added manufacturing jobs under Trump: Those jobs have increased by 10,200 jobs in Florida and by 8,300 jobs in Arizona. For the record, those two states also added 39,000 and 5,100 manufacturing jobs, respectively, during the comparable period under Obama.
U.S. Manufacturing Jobs under President Trump and President Obama
U.S. manufacturing workers have lost ground under Trump in other ways as well. Their real wage gains slowed sharply since Trump took office. From January 2017 to August 2020, the average real weekly earnings of manufacturing workers increased less than $10, from $1,147.51 to $1,156,80 (in August 2020 $). Over the corresponding part of Obama’s second term, from January 2013 to August 2016, their average real earnings increased nearly $43, from $1,101.64 to $1,144.62 (again, August 2020 $).
The difference is meaningful: On an annual basis, the average earnings of American manufacturing workers have risen $483 under Trump, small stuff compared to their average gains of $2,235 during the comparable period under Obama.
With this dismal record, the president has the same options as he does with the pandemic: He can ignore his record, he can lie about it, or he can offer a better plan and policy for a second term. Biden is out campaigning for $400 billion in “Buy American” federal procurement, a new tax credit for modernizing manufacturing facilities, and ending tax provisions that reward outsourcing. Trump has proposed nothing new. In this area, as with the pandemic and most other important matters, from climate change to racial justice, Donald Trump’s default position, sadly, is the empty combination of the first two options.
This essay first appeared at Washington Monthly.