The real reason for disappearing jobs isn't trade—it's robots

Robots are the real reason why jobs in America are disappearing
Robots are the real reason why jobs in America are disappearing

Donald Trump got elected in part by appealing to blue-collar America, blaming the loss of U.S. jobs on immigration and bad trade deals with China, and pledging to improve the situation.

He largely ignored one key issue: automation.

"They are not talking about technology, robots and automation and factories, but that is a big part of it," says Martin Ford, the author of the New York Times bestselling novel Rise of the Robots: Technology and the Threat of a Jobless Future, in a phone conversation with CNBC.

"Trump and his supporters are talking about trade, they are talking about immigration. Actually, I think technology is at least as important, maybe more important," says Ford.

"Technological change disrupts labor markets"

Although conventional wisdom holds that manufacturing in the United States is in decline, in fact it's been growing steadily.

The production of manufactured goods in the U.S. has been "on a steady and long-term growth path" as measured in inflation-adjusted dollars in recent decades, according to a report on the evolution of the sector from Ball State University. "The notion that manufacturing in the United States is in decline is factually incorrect," the report states. Even through the Great Recession, manufacturing grew in the U.S. From 2006 to 2013, manufacturing grew by 17.6 percent, or at roughly 2.2 percent per year.

But, even as manufacturing production has grown, employment in the sector "has largely stagnated," the Ball State report says. That is due to increases in productivity of each worker thanks to technology.

The period from 2000-2010 saw the largest losses in employment in manufacturing in the history of the U.S., the report says. It notes: "Had we kept 2000-levels of productivity and applied them to 2010-levels of production, we would have required 20.9 million manufacturing workers. Instead, we employed only 12.1 million."

As machines get better, in other words, factories require fewer workers.

"We are already seeing the impact of technology on the job market and that is something that is going to get worse," says Ford.

The notion that manufacturing in the United States is in decline is factually incorrect.
Ball State University report
The Myth and The Reality of Manufacturing in America

One 2013 study written by Oxford University's Carl Frey and Michael Osborne estimates that 47 percent of the U.S. jobs could be replaced by robots and automated technology in the next 10 to 20 years. And a 2016 analysis from the World Bank estimated that roughly two-thirds of all jobs in developing nations around the globe are susceptible to replacement by automation.

While new technologies have always eliminated some jobs while creating others, that transition takes time.

"Technological change disrupts labor markets and can hurt individuals whose skills are substituted by technology, because they often do not have the skills required in many of the new jobs," according to the World Bank report on the digital state of the world. "Even for those who stay within the same occupations, jobs will be transformed, requiring modern skills. The speed of these changes appears to be accelerating, intensifying creative destruction and the pace of labor market changes."

If robots take your job, the government might have to pay you to live
If robots take your job, the government might have to pay you to live

Currently, factory and office jobs are being phased out, and other low-skilled jobs, like those at Wal Mart and McDonald's, may also soon be at risk, says Ford.

For example, San Francisco-based robotics company Momentum Machines has built a robot that can make a hamburger from scratch. No human labor required. The technology is more sanitary and faster than human cooks are, and the product is fresher, the company claims on its Angel List page.

"Within 10 to 15 to 20 years we are probably going to have a visible problem in terms of the problem technology is having on the job market," says Ford. "There are many people who think it could be sooner than that because technology is accelerating in terms of machine learning and robotics."

It's easier to blame people than to blame progress

A politician rarely loses by identifying an easy and concrete enemy to blame. But a politician can lose, and look like a Luddite, by railing against progress.

"It's much easier for people to blame other people, whether it's a worker in China or an immigrant, than it is to understand an intangible force, which is technology," says Ford.

A solution may require a crisis in the U.S.

As globalization and robotics replace low-skilled jobs, momentum has begun to build around the idea of a universal basic income. With a universal basic income, every resident, whether unemployed or a business tycoon, receives standard, regular payments from the government.

While some, including Silicon Valley entrepreneur and futurist Elon Musk, see a universal basic income as an inevitability, the notion isn't one that most people in the U.S. feel comfortable with.

"I don't expect it to happen smoothly. I expect that, especially here in the United States, it's going to happen when we have a crisis. We will have a big problem first and then, when people realize what's happening, then at that point it would happen," says Ford.

A robot at the International Robotics Exhibition in Guangzhou, China.
By Anadolu Agency | Getty Images

Trump's unexpected election is an indication that the crisis of instability is "closer than we thought," says Ford. Still, the adoption of a universal basic income in the U.S. is probably years away, if it's possible at all.

"I think guaranteed income would be a good deal, a good idea. If not, people will try to halt technology, right, which would be a bad thing, because progress has got many positive signs to it, too," says Ford. "Historically it has made us much better off.

"Whether we are going to be rational and get that basic income, that's hard to say."