Secretary of the Treasury Steven Mnuchin addresses a press conference in Berlin on March 16, 2017. (JOHN MACDOUGALL/AFP/Getty Images)
By Ese Olumhense
Treasury secretary ‘optimistic’ about job security
Increasing automation and artificial intelligence (AI) are not threats to the American workforce, Treasury Secretary Steve Mnuchin said in an early morning interview on Friday with the news website Axios.
“It's not even on our radar screen,” Mnuchin, a former Goldman Sachs executive and hedge fund manager said, adding that machines would not pose any challenge to jobs for another “50 to 100” years. “I’m not worried at all,” he added.
Mnuchin’s statements on AI, one of many topics he discussed in the interview, come the same day as a new report from the accountancy firm PricewaterhouseCoopers (PWC), which forecasts the U.S. will lose 38 percent of existing jobs to automation by the early 2030s — a rate of displacement higher than that projected for the U.K., Germany, and Japan. Those three nations are expected to lose 30, 35, and 21 percent of jobs, respectively, to machines within the same timeframe.
Automation is already a concern for the more than 12 million Americans that make up the country’s manufacturing workforce. Since 1979 — when the number of U.S. manufacturing jobs peaked at almost 20 million — 7 million of these jobs have been lost, most to machines.
‘Buy American’ robots, ‘hire American’ robots?
Time and again, both during his campaign and after his inauguration, President Donald Trump has promised that he will bring factory jobs back to America — jobs he claims have been outsourced to foreign countries, like China and Mexico, and bled from the American economy as a result of “unbelievably bad” trade deals.
“Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families,” Trump said at his inauguration. “We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs.”
“We will bring back our jobs,” he added. His statement was in line with his “buy American, hire American” pledge.
Trump is right about lost factory jobs, but both his statements and Mnuchin’s Friday declaration of “optimism” about American job security in the age of AI appear to misunderstand just why the manufacturing workforce has gone through a significant contraction.
Federal data show that though the manufacturing workforce has shrunk, U.S. production output has grown. Factories are able to produce more with fewer employees because machines have been able to do much of this work for less money. This, not trade, accounts for 88 percent of the manufacturing jobs lost in recent years, a team of researchers at Ball State University in Indiana determined. Trade accounted for roughly 13 percent of manufacturing sector job losses.
Machines can make dangerous colleagues
Though the (human) manufacturing workforce in America has dwindled, factories continue to be central to much of the Deep South, which is experiencing what has been dubbed a “manufacturing renaissance,” particularly in the automobile and auto parts industries. There, human employees work side-by-side with a growing number of machine counterparts, toiling at the same assembly lines and workstations.
But as a recent Bloomberg Businessweek investigation showed, working with robot employees in 21st century American factories comes with severe risks of its own. Machine malfunctions sometimes leave employees missing fingers and limbs, or, in at least one case, dead. Slips and falls are common; adequate training and safety protocols appear to be sparse, at best.
The Occupational Safety and Health Administration is tasked with enforcing safety regulations in American workplaces, but under Trump, who has pledged widespread deregulation, the federal agency’s role will change. Trump is expected to sign legislation passed by Congress in March that would roll back a rule implemented to bolster workplace safety by fining companies that don’t report injuries and fatalities dating back five years.
But if Trump hopes to bring back factory jobs, not signing the bill might be a smarter move. Though the rate of incidents for factory employees has declined slightly in recent years, federal data show, more are experiencing amputations and taking more days away from work when injured. Keeping policy aimed at protecting workers, particularly those in Trump strongholds like the South, may be a wiser move than eliminating it in favor of corporate-approved deregulation.