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Willpower and Optimism Pale in Comparison to Economic Truths

By Mark Croughan and Trip Calihan

President Trump ran on a political platform that promised a resurgence to the manufacturing sectors and instilled much hope into an industry that many feared was steadily declining. His campaign toted a MAGA slogan that promised to "Make America Great Again," and bring the country back to its economic tendencies of the 1950's that largely relied on these sectors. Many states, especially those in the Midwest, looked at Trump's candidacy as a chance to resuscitate areas that so desperately needed help. However, FRED provides us with empirical examples that explain exactly what has been happening in the industry and why Trump's strong words and optimist sentiment may be good for a few "hiring bumps" but will not be able to sustain a long-term rise in actual manufacturing employment.

Overall, over the last thirty or so years, the amount of jobs in the manufacturing sector has decreased. This is why so many Americans were ready to vote for a President that promised a resurgence in the amount of jobs readily available to the people.

However, as we look at the same time period in relation to actual production in the manufacturing sector, we can see that production has steadily increased, showing no signs of slowing down. Pairing these two pieces of information together, we can safely assume that since production has increased and jobs have decreased over the last few decades, it is taking the same or less amounts of workers to maintain an increasing level of production. This most likely comes from advancements in technology which help increase a single workers production rate. Therefore, it does not make sense for companies to hire more workers given their already-increasing production rates- it would simply be a waste of money.

Resources:

FRED A, FRED B and Trump Dreams

15 thoughts on “Willpower and Optimism Pale in Comparison to Economic Truths

  1. Mariam Samuel

    This data disproves the beliefs on which Trump was running his campaign. The main point that brought voters was his promise to fix the economy in order to bring jobs to those areas , but this data shows that the economy did not need fixing and was actually improving. This is unfortunate as it shows the influence of politicians and the media on voters without necessarily needing to show evidence of their claims. Although the increased technology will increase production and therefore GDP, it will benefit the United States as a whole, but it proves unlikely the resurgence of employment in the manufacturing sector.

    Reply
    1. minsong20

      Economists point out gains from trade and productivity, but this is one area where the people who built up the economy can not take advantage of these gains. It is difficult to pay for cheaper things ay Walmart when one does not have a job.

      Reply
  2. Molly Mann

    These graphs lead me to question the campaign that Trump ran on. By looking at the graph in the area from 1998 and 2008, manufacturing employment drastically decreases while industrial production increases. Trump's promises to increase manufacturing employment failed to acknowledge the influence of technology. The technology boom led to increases in production, making many manufacturing jobs obsolete, and overall hurting those in the manufacturing sector.

    Reply
  3. bernsteinl20

    I think that this emphasizes the importance of putting money into retraining programs instead of trying to restart dying industries. If we were able to retrain workers to help with and even improve the technology in factories we could increase production at a faster rate because it was expand the availability of that skill in the labor force.

    Reply
  4. bullr20

    This post reveals the counter-productivity of the political economy at its finest. The manufacturing sector is hiring less and less US workers because TFP has increased drastically, and because manufacturing in the US has contracted greatly as international trade has expanded. Though a decline in manufacturing is bad for workers in the short run, the gains from the specialization-- enabled by imports-- and productivity growth far outweigh these concerns. And yet, industries can organize and lobby much more effectively than the general consumer, so politicians like Trump pander to the myopic political interests of these louder, less economically important groups. Perhaps a more proactive worker mobility/retraining program or a wider safety net could mitigate some of the concerns which incentivize people to vote for counter-productive economic policies (like coal deregulation or pulling out of the TPP).

    Reply
  5. dugganj20

    The graphs show that as production increases, manufacturing jobs have decreased, creating a negative relationship. So how do we create jobs while still increasing a single worker's productivity? Questions like these are what the Trump administration, and any administration for that matter, should be focusing on. It is imperative that jobs do not decline, however it is equally as important to continually increase the country's productivity and prevent it from becoming stagnant.

    Reply
  6. ingramk20

    I think Trump's opposition to free trade as a way to preserve American jobs is interesting. His decision to withdraw from TPP illustrated his desire to maintain trade protections on things like manufactured goods. I personally wonder what the long-term implications would have been of the TPP. I know it would have meant lower prices to consumers. Would it have resulted in even fewer manufacturing jobs?

    Reply
    1. the prof

      Actually TPP was directly primarily at a number of special interests on the US end, Hollywood and Big Pharma, while avoiding agriculture on the Japan end. There wasn't much content but it was sending a signal by including everyone EXCEPT China. We've left a vacuum in Asia, and not just on this issue. China is working hard to fill it. Most of Asia doesn't think that's a good thing, we helped give them bargaining power. Past tense.

      Reply
  7. scottm20

    The data presented in both graphs reveal an inverse relationship between number of individuals from the labor force working in manufacturing and the industrial production performance during overlapping time periods. This evidence belittles Trump’s campaign promise to bring back manufacturing jobs twofold. First, Trump’s promise appears counterintuitive as investing additional capital towards wages would be a waste. Due to technological advances, manufacturers now rely less on individual workers and more on machinery which is a cheaper and more efficient alternative. Returning those responsibilities to wage-earning workers would diminish profits. Second, disrupting a prolonged streak of success to force employment openings on manufacturers is a risky move and arguably an overreach of power. The manufacturing industry has seen growth in industrial production, and any government-enforced changes put that success at risk. -Griffin Scott

    Reply
  8. Faith E. Pinho

    No doubt manufacturing has increased as a result of advancements in technological and productivity. But that does not address the number of those who were put out of work in the manufacturing industry. These graphs do not reach those people -- and neither do traditional politicians, as Trump's 2016 victory proved.

    Reply
    1. the prof

      Trump certainly had an ability to reach this particular group of voters, but Bernie Sanders divided the opposition while Hillary Clinton ran an incompetent campaign. But will 2020 be any better?

      Reply
  9. riversc20

    I find this really interesting; I remember hearing Trump boasting of how he was going to bring jobs back to America and create employment opportunities etc. backed up by little concrete facts or details. Therefore, I was intrigued to see if he really fulfilled these promised he campaigned on, and as you have shown in your article, he hasn't. You make a great point in your conclusion, with production rates already increasing, why would employers waste money hiring even more workers? Interesting to see if over the next two years any of this changes.

    Reply
  10. dodsonm20

    I'm curious to see if people notice that Trump's plan isn't all that feasible. looking at the graphs it appears the labor market for manufacturing is still rebounding from the great recession and may continue to do so throughout his presidency. In other words I think the manufacturing jobs may increase slightly as a reaction to the great recession and America may credit Trump when his influence had little to no impact.

    Reply
  11. the prof

    Note that the same technology - productivity challenges affect coal: mountain top removal in West Virginia doesn't employ many people. And in place of competition from imports there's competition from natural gas: in contrast to manufacturing, coal is in outright decline. Manufacturing jobs may stabilize – they've risen quite a bit in the automotive sector, which I follow. But coal jobs aren't coming back, even with additional subsidies and carveouts (coal already receives tax benefits and exemptions from environmental rules).

    Reply

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