Smart policy — and some key trade action — will be crucial.
The final monthly jobs figures of the decade were unveiled on Friday, and the news wasn’t great for manufacturing: The sector lost 12,000 jobs in December.
It was a tough ending to a pretty sluggish year for factory jobs. Although the overall economy added about 2.1 million jobs in 2019, only 46,000 of them were in manufacturing.
And while that isn’t in the negative column —and is certainly better than the massive job losses we saw during the Great Recession — there’s no doubt that we’d like to see more growth in the next decade, particularly after manufacturing saw big gains in 2018.
As AAM President Scott Paul pointed out on Twitter, it isn’t robots stealing those jobs. Weak demand and trade uncertainty are some of the big challenges facing the sector.
Both will require the implementation of smart policy to address. For one, policymakers can finally get to work and pass a robust infrastructure investment bill, which will create millions of good-paying jobs, provide a big boost to the economy and make America more competitive on the global stage.
Doing so is easier said than done, of course. Whenever Congress and the White House look to be ready to get infrastructure done, some kind of drama happens and they call the whole thing off.
But that doesn’t mean it shouldn’t be done. America’s infrastructure — from its roads and bridges to its water pipelines and electric grid to its railways, airports and public transit systems — are all in terrible shape. Even forgetting about the jobs gains and economic growth, it is past time to rebuild U.S. infrastructure.
Then there’s trade.
Now, there’s no shortage of punditry out there about how the current trade conflict between the U.S. and China has been bad for U.S. jobs and American factories. We’ve been a bit more measured here at AAM, as we think President Trump was right to take on China’s unchecked trade cheating. We would even argue that the administration’s decision to place tariffs on certain Chinese imports brought China to the table to talk about key trade issues – in a way that no prior administration had been able to do.
But Trump’s decision to play tough with China has created enough uncertainty that companies are withholding investments, and that is driving some of the sluggishness we’re seeing. It ultimately will be worth it if we end up seeing real progress on key issues like China’s massive industrial subsidies, state-owned enterprises (SOEs) and currency manipulation (along with labor and environmental concerns).
Unfortunately, that doesn’t seem to be happening. Take it away, Lando:
As of Friday afternoon, the text of the ‘Phase 1’ trade deal with China still hadn’t been officially released. But from what we can gather, it isn’t going to do anything to help American manufacturing workers. None of the key issues noted above — subsidies, SOEs, currency cheating, labor practices, environmental standards — are addressed in the agreement, even though the administration acknowledges that China's huge subsidy habit is a significant problem for competing U.S. industries like steel. It doesn’t even look like China is going to buy a bunch of U.S. farm products, which was one of the things the Trump administration has touted as a key victory in the agreement.
Trump officials have said that many of these issues will be brought up in “Phase 2” negotiations, but it’s unclear when or where those might even take place, let alone what the timeframe on reaching a deal would be.
“It’s incredibly disappointing the last three years has built up to this agreement, and there’s no clear path forward after this,” AAM’s Paul told the Washington Post on Dec. 31. “There’s been a lot of disruption and pain, and there hasn’t been a lot of progress on the most important issues.”
It’s always impossible to predict what 2020 might bring, especially considering it is a presidential election year. But it is clear that enacting smart policy at home (infrastructure investment) and continuing to work to achieve change abroad (China trade) will help strengthen American manufacturing in the new decade.
And we’ll be here each month, keeping an eye on the factory jobs data. Stay tuned!