Tariffs alone won’t bring back jobs

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I am struck by two conversations our nation is having about the future of the American worker: protecting American manufacturing jobs and the application of artificial intelligence in business. I believe the two are related.

President Trump has shown his ability to use the bully pulpit to make U.S.-based manufacturing jobs a high priority. Overturning years of orthodoxy, plans are being made to slap tariffs on imported items. Congress is considering giving preferential tax treatment to U.S. businesses that manufacture products domestically, and penalizing companies that import items.

Trump’s strong public push for bringing American jobs back home is having a visible effect. A rush of announcements from businesses such as Softbank, Carrier and Fiat promise to put Americans to work through investments. Others such as General Motors are playing catch-up in this rapidly changing political climate, fearing criticism if their company’s investment decisions benefit foreign workers.

Meanwhile, technologists are warning us that artificial intelligence will steal tens of millions of jobs from humans, accentuating the reality started by the introduction of computer hardware, software and robots decades ago.

The pace of job substitution that has occurred over the last 30 years will be dramatically accelerated, as will the diversity of the types of jobs eliminated. This shift is a big deal. For example, a recent White House study on the potential effect of artificial intelligence on employment suggests that up to half of jobs currently being done by humans will eventually be carried out by machines.

The Trump administration may face an interesting dilemma: how to promote new jobs — particularly in the manufacturing industry — when technologies continue to emerge to make current jobs obsolete.

Early indications are that President Trump will indeed be able to influence businesses to use American labor. And, it is certainly true that he can further influence behavior through more drastic actions involving tariffs or tax policies. But businesses won’t stop pursuing economic efficiency. And American consumers might not embrace paying higher prices just to protect local employment.

What is lost in the current conversation is the reason jobs have gone overseas in the first place, or disappeared through application of technology. Both alternatives were cheaper than employing American workers. Businesses acting in their own narrow economic interests have done what businesses always do — they seek efficiency.

Actions have consequences, and societies can make choices. There is nothing determinative about how technology is to be applied. As recently as last week, the CEOs of IBM and Microsoft both emphatically argued that artificial intelligence can be used to enhance human employment, rather than substitute it.

Similarly, merely maintaining a job in the United States does not in itself mean it will provide a living wage, or ancillary benefits. The manufacturing jobs of old carried wages and benefits significantly higher on an inflation-adjusted basis than many of the jobs being created in business today.

As our new president uses his influence, my wish is he and his advisors appreciate that creating the jobs our citizens want and ensuring that good jobs continue to exist, is about more than simply looking at trade and manufactured goods. It’s about making choices.

We must have an honest conversation about how to balance economic efficiency with job creation. It’s the determining factor for whether our nation creates opportunities for its workers to enjoy rewarding jobs.

Tariffs will not address this core conversation, and the sooner we acknowledge the intricacies of our employment reality, the better off we will be.

Column originally posted to WashingtonPost.com.


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