We’ve heard a lot of rhetoric lately suggesting that importers, like the US, are losing valuable manufacturing jobs to exporters like China, Mexico and Vietnam. In reality, those manufacturing jobs haven’t disappeared for the reasons you may think, says border and logistics specialist Augie Picado in his talk.
Automation, not offshoring, is really to blame, he says; in fact, of the 5.7 million manufacturing jobs lost in the US between 2000 and 2010, 87 percent of them were lost to automation. If that trend continues, it means that future protectionist policies would save 1 in 10 manufacturing jobs, at best — but, more likely, they’d lead to tariffs and trade wars.
And with the nature of modern manufacturing inexorably trending toward shared production, in which individual products are manufactured using materials produced in many different countries, protectionist policies make even less sense. Shared production allows us to manufacture higher-quality products at prices we can afford, but it’s impossible without efficient cross-border movement of materials and products.
As Picado asks: “Does it make more sense to drive up prices to the point where we can’t afford basic goods, for the sake of protecting a job that might be eliminated by automation in a few years anyway?”
Augie Picado is the country manager for UPS Mexico.