CNN Host’s Attempt to Explain the U.S. Economy Was So Bad I Started Yelling at the TV

Honestly, I don’t usually talk back to the TV. But I couldn’t contain myself during Poppy Harlow’s December 10 interview with John Feltner, the United Steelworkers vice president of the Rexnord local union where 300 jobs are moving from Indianapolis to Mexico. 

In discussing the move, Harlow twice resorted to the much repeated trope that the loss of American manufacturing jobs is really about automation and technology. 

HARLOW: What is the number-one thing you would like to see the incoming administration do that you think will help people in your situation? Because, you know, Donald Trump points to global trade as being the reason that your jobs are going away. That’s not all of it. A lot of it is, as you know well, automation and technology. 

FELTNER: These companies are leaving to exploit cheap labor. That’s plain and simple. If he can change those trade policies to keep those jobs here in America, that’s what we need. We need American jobs, not just union jobs.HARLOW: But you agree it won’t save all of them, because of automation, because of technology. 

Please Poppy, come off it! Feltner is right. Offshoring is about the rush to cheap labor, not about automation and new technology. The move to cheaper labor in Mexico, in fact, allows corporations to avoid investing in new technologies. Rexnord and Carrier are moving the same old technologies to Mexico, piece by piece.

DYI:  Actually it is both.  Let's be clear moving offshore beginning in the 1990's was and remains to this day to drop labor costs.  At the same time automation is sweeping across vast industries.  As an example when I first entered into the work force in the early 1970's many young women would become secretaries.  Today only upper level managers have secretaries the rest do all of the work on a word processing program.  I work at a major hotel/resort with 400 rooms - 3 golf courses - 8 tennis courts - 9 restaurants - including a winery.  The only manager that has a secretary is the owner/CEO. None of the other managers have a secretary all [around 400 employees total] use word perfect.

In high income countries corporations are willing to invest in cutting edge automation as compared to the low wage countries will only do so when the technology becomes so mundane it is less than their low labor cost.

We do need to drop our corporate income tax to the 15% level as Trump has suggested.  Production will come back to our shores.  But make no mistake automation will become job number 1 as those manufacturing companies return to America.

DYI