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Sydney Morning Herald
7 days ago
- Business
- Sydney Morning Herald
Despite what Donald Trump says, factory work is overrated. Here are the jobs of the future
Even a heroic reshoring effort eliminating America's $US1.2 trillion (about $1.9 trillion) goods-trade deficit would do little for jobs. In the production of that amount of goods, about $US630 billion (about $973 billion) of value-added would come from manufacturing (with the rest from raw materials, transport and so on). Robert Lawrence of Harvard University estimates that, with each manufacturing worker generating $US230,000 (about $355,000) or so in value added, bringing back production to close the deficit would create around three million jobs, half on the factory floor. That would lift the share of the workforce in manufacturing production by barely a percentage point. Assume this was done by levying an average effective tariff rate of 20 per cent on America's $US3 trillion (about $4.6 trillion) of imports, and it could cost an extra $US600 billion (about $926 billion), or $US200,000 (about $308,000) per manufacturing job 'saved'. That is a high price for jobs that are not as attractive as in the past. Seven decades ago, factories offered a rare bundle: good pay, job security, union protection, plentiful employment and no degree requirement. By the 1980s manufacturing workers still earned 10 per cent more than comparable peers in other parts of the economy. Their productivity was also growing faster. Loading Today factory-floor work lags behind non-supervisory roles in services on hourly pay. Even if you control for age, gender, race and more, the manufacturing wage premium has collapsed. Using methods similar to the Department of Commerce and the Economic Policy Institute, we estimate by 2024 the premium had more than halved since the 1980s. For those without a college education, it has gone entirely, even though such workers still enjoy a premium in construction and transport. Productivity growth has fallen, too: output per industrial worker is now rising more slowly than per service-sector worker, suggesting wage growth will be weak as well. A crucial component of the 'manufacturing jobs are good jobs' argument no longer holds. A job in industry is also now harder to attain. Modern factories are high-tech, run by engineers and technicians. In the early 1980s blue-collar assemblers, machine operators and repair workers made up more than half of the manufacturing workforce. Today they account for less than a third. White-collar professionals outnumber blue-collar factory-floor workers by a wide margin. Even once obtained, a factory job is far less likely to be unionised than in previous decades, with membership having fallen from one in four workers in the 1980s to less than one in ten today. In order to find the modern equivalent of such jobs, we looked for employment with the same traits. What offers decent pay, unionisation, requires no degree and can soak up the male workforce? The result: mechanics, repair technicians, security workers and the skilled trades. Over seven million Americans work as carpenters, electricians, solar-panel installers and in other such trades; almost all are male and lack a degree. The median wage is a solid $US25 (about $39) an hour, unionisation is above average and demand is expected to rise as America upgrades its infrastructure. Another five million toil as repair and maintenance workers – think HVAC technicians and telecom installers – and mechanics, earning wages well above the factory-floor average. Emergency and security workers also show similarities; over a third are union members. An air-con capital of the world Still, these jobs differ from manufacturing in one important way: there is no such thing as an HVAC company town. Factories once powered whole cities, creating demand for suppliers, logistics and dive bars. The new jobs are more dispersed and, as such, less likely to prop up local economies. Yet although the benefits are more diffuse, they are almost as large. Nearly as many people are employed in such categories as held manufacturing jobs in the 1990s. With better wages, less credentialism and stronger unions, they may look more attractive than modern factory jobs to working-class Americans. Loading The future is drifting even further from factories. Skilled trades and repair workers should see growth of five per cent over the next decade, according to official projections; the number of manufacturing jobs is expected to fall. The fastest-growing categories for workers without degrees are in health-care support and personal care, which are expected to grow by 15 per cent and six per cent, respectively. These include roles such as nursing assistants and child-care workers, and do not look anything like old manufacturing jobs owing to their low pay. The task, as Dani Rodrik of Harvard puts it, is to boost the productivity of the jobs that are actually growing. Perhaps that might include ensuring the adoption of AI, whether for managing medication or diagnosis. In the late 18th century, Thomas Jefferson viewed farming as the foundation of a self-reliant republic. Influenced by French physiocrats who saw agriculture as the noblest source of national wealth, he believed that working the land was the path to liberty and abundance. By the 20th century, factory work had inherited that symbolic role. But like farming before it, manufacturing employment fades with rising prosperity and productivity. The heart of working-class America now beats elsewhere.
The Age
7 days ago
- Business
- The Age
Despite what Donald Trump says, factory work is overrated. Here are the jobs of the future
Even a heroic reshoring effort eliminating America's $US1.2 trillion (about $1.9 trillion) goods-trade deficit would do little for jobs. In the production of that amount of goods, about $US630 billion (about $973 billion) of value-added would come from manufacturing (with the rest from raw materials, transport and so on). Robert Lawrence of Harvard University estimates that, with each manufacturing worker generating $US230,000 (about $355,000) or so in value added, bringing back production to close the deficit would create around three million jobs, half on the factory floor. That would lift the share of the workforce in manufacturing production by barely a percentage point. Assume this was done by levying an average effective tariff rate of 20 per cent on America's $US3 trillion (about $4.6 trillion) of imports, and it could cost an extra $US600 billion (about $926 billion), or $US200,000 (about $308,000) per manufacturing job 'saved'. That is a high price for jobs that are not as attractive as in the past. Seven decades ago, factories offered a rare bundle: good pay, job security, union protection, plentiful employment and no degree requirement. By the 1980s manufacturing workers still earned 10 per cent more than comparable peers in other parts of the economy. Their productivity was also growing faster. Loading Today factory-floor work lags behind non-supervisory roles in services on hourly pay. Even if you control for age, gender, race and more, the manufacturing wage premium has collapsed. Using methods similar to the Department of Commerce and the Economic Policy Institute, we estimate by 2024 the premium had more than halved since the 1980s. For those without a college education, it has gone entirely, even though such workers still enjoy a premium in construction and transport. Productivity growth has fallen, too: output per industrial worker is now rising more slowly than per service-sector worker, suggesting wage growth will be weak as well. A crucial component of the 'manufacturing jobs are good jobs' argument no longer holds. A job in industry is also now harder to attain. Modern factories are high-tech, run by engineers and technicians. In the early 1980s blue-collar assemblers, machine operators and repair workers made up more than half of the manufacturing workforce. Today they account for less than a third. White-collar professionals outnumber blue-collar factory-floor workers by a wide margin. Even once obtained, a factory job is far less likely to be unionised than in previous decades, with membership having fallen from one in four workers in the 1980s to less than one in ten today. In order to find the modern equivalent of such jobs, we looked for employment with the same traits. What offers decent pay, unionisation, requires no degree and can soak up the male workforce? The result: mechanics, repair technicians, security workers and the skilled trades. Over seven million Americans work as carpenters, electricians, solar-panel installers and in other such trades; almost all are male and lack a degree. The median wage is a solid $US25 (about $39) an hour, unionisation is above average and demand is expected to rise as America upgrades its infrastructure. Another five million toil as repair and maintenance workers – think HVAC technicians and telecom installers – and mechanics, earning wages well above the factory-floor average. Emergency and security workers also show similarities; over a third are union members. An air-con capital of the world Still, these jobs differ from manufacturing in one important way: there is no such thing as an HVAC company town. Factories once powered whole cities, creating demand for suppliers, logistics and dive bars. The new jobs are more dispersed and, as such, less likely to prop up local economies. Yet although the benefits are more diffuse, they are almost as large. Nearly as many people are employed in such categories as held manufacturing jobs in the 1990s. With better wages, less credentialism and stronger unions, they may look more attractive than modern factory jobs to working-class Americans. Loading The future is drifting even further from factories. Skilled trades and repair workers should see growth of five per cent over the next decade, according to official projections; the number of manufacturing jobs is expected to fall. The fastest-growing categories for workers without degrees are in health-care support and personal care, which are expected to grow by 15 per cent and six per cent, respectively. These include roles such as nursing assistants and child-care workers, and do not look anything like old manufacturing jobs owing to their low pay. The task, as Dani Rodrik of Harvard puts it, is to boost the productivity of the jobs that are actually growing. Perhaps that might include ensuring the adoption of AI, whether for managing medication or diagnosis. In the late 18th century, Thomas Jefferson viewed farming as the foundation of a self-reliant republic. Influenced by French physiocrats who saw agriculture as the noblest source of national wealth, he believed that working the land was the path to liberty and abundance. By the 20th century, factory work had inherited that symbolic role. But like farming before it, manufacturing employment fades with rising prosperity and productivity. The heart of working-class America now beats elsewhere.
The Age
29-05-2025
- Business
- The Age
US court blocks Trump's tariffs, rules president exceeded his authority
Companies of all sizes have been whipsawed by the president's swift imposition of tariffs and sudden reversals as they seek to manage supply chains, production, staffing and prices. A White House spokesperson, Kush Desai, said US trade deficits with other countries constituted 'a national emergency that has decimated American communities, left our workers behind, and weakened our defence industrial base – facts that the court did not dispute'. 'It is not for unelected judges to decide how to properly address a national emergency,' Desai said in a statement. Financial markets cheered the ruling. The US dollar rallied following the court's order, surging against currencies such as the euro, yen and the Swiss franc in particular. Wall Street futures rose, along with equities across Asia. The ruling, if it stands, blows a giant hole through Trump's strategy to use steep tariffs to wring concessions from trading partners. It creates deep uncertainty around multiple simultaneous negotiations with the European Union, China and many other countries. However, analysts at Goldman Sachs noted the order does not block sector-specific levies and there were other legal avenues for Trump to impose across-the-board and country-specific tariffs. Loading 'This ruling represents a setback for the administration's tariff plans and increases uncertainty but might not change the final outcome for most major US trading partners,' analyst Alec Phillips wrote in a note. Trump has promised Americans the tariffs would draw manufacturing jobs back to US shores and shrink a $US1.2 trillion ($1.9 trillion) US goods trade deficit, which were among his central campaign promises. Without the instant leverage provided by tariffs, the Trump administration would have to find new forms of leverage or take a slower approach to negotiations with trading partners. The ruling came in a pair of lawsuits, one filed by the non-partisan Liberty Justice Centre on behalf of five small US businesses that import goods from countries targeted by the duties and the other by 13 US states. The companies, which range from a New York wine and spirits importer to a Virginia-based maker of educational kits and musical instruments, have said the tariffs will hurt their ability to do business. 'There is no question here of narrowly tailored relief; if the challenged tariff orders are unlawful as to plaintiffs, they are unlawful as to all,' the trade court wrote in its decision. At least five other legal challenges to the tariffs are pending. Oregon Attorney-General Dan Rayfield, a Democrat whose office is leading the states' lawsuit, called Trump's tariffs unlawful, reckless and economically devastating. Loading 'This ruling reaffirms that our laws matter, and that trade decisions can't be made on the president's whim,' Rayfield said in a statement. Trump has claimed broad authority to set tariffs under IEEPA, which has historically been used to impose sanctions on enemies of the US or freeze their assets. Trump is the first US president to use it to impose tariffs. The Justice Department has said the lawsuits should be dismissed because the plaintiffs have not been harmed by tariffs that they have not yet paid, and because only Congress, not private businesses, can challenge a national emergency declared by the president under IEEPA. In imposing the tariffs in early April, Trump called the trade deficit a national emergency that justified his 10 per cent across-the-board tariffs on all imports, with higher rates for countries with which the US has the largest trade deficits, particularly China. The country-specific tariff rates were paused for 90 days a week later, though the baseline 10 per cent duty was put in place for most nations. The Trump administration on May 12 said it was also temporarily reducing the steepest tariffs on China while working on a longer-term trade deal. Both countries agreed to cut tariffs on each other for at least 90 days.
AU Financial Review
28-05-2025
- Business
- AU Financial Review
Lost in New York: What happened to the trophy art market?
By the art world's own accounting, the spring auction season in New York fell short of even its lowest target. Reaching for a combined estimate from $US1.2 billion ($1.85 billion) to $US1.6 billion, the three major auction houses fell short at $US1 billion when excluding the hefty buyer fees that inflate their totals. Christie's, Sotheby's and Phillips all underperformed their own estimates, which the companies had previously said were conservative predictions based on a market that has continued to decline over the last three years. Analysts placed the blame largely on an uncertain global economy and the changing tastes of collectors.
The Age
16-05-2025
- Business
- The Age
No one should be surprised by Trump's love-in with Middle East monarchs
Washington: While Donald Trump was shaking hands in the Gulf states – 'more hands than any human being is capable of doing', he said – back home in Washington, the US Department of Agriculture was marking its 163rd birthday. Straddling the great neoclassical columns of the Jamie L. Whitten building are two giant banners: one of president Abraham Lincoln, who created the agency in 1862, and another of – no prize for guessing – Trump. It's difficult to get away from the US president these days. Whether it's the front page of the newspaper, the board of the Kennedy Centre or the facade of downtown buildings, he is everywhere. (Portraying Trump on Saturday Night Live last weekend, James Austin Johnson entered the stage and said: 'Hello, it's me again, invading all aspects of your life'.) The banner, which appeared on Wednesday morning, would not have been out of place in one of the Middle East monarchies the president was visiting – nor, as some commentators noted, in the dictatorship of North Korea. No one should be surprised by Trump's Gulf love-in. From the disdain for democratic checks to a fondness for ostentatious wealth and the mixing of business with politics – not to mention public and private benefit – they are his people, through and through. Indeed, international affairs professor Gregory Gause says when Trump began sending his son-in-law Jared Kushner to handle Middle East peace talks during his first term, Gulf states thought: 'Finally, an American government we can understand.' This trip took the president to Riyadh, Doha and Abu Dhabi. At each stop, the ceremonies were lavish, the pleasantries superlative and the 'deals' eye-watering: $US600 billion ($937 billion) from Saudi Arabia, an 'economic exchange' with Qatar supposedly worth $US1.2 trillion and another $US200 billion squeezed from the United Arab Emirates. Of course, these are not deals – they are memoranda of understanding which may one day yield a deal.
