ANDERSON — In a political climate that has focused intently on fixing a broken economy, a Ball State economist is saying candidates have it wrong.
Michael Hicks, director of the Center for Business and Economic Research, said data contradict the candidates' claims that the manufacturing industry is in trouble.
“They are peddling untruths,” he said. “During recent visits to Indiana for the primaries, these candidates claim that Indiana is suffering, but the state had a record year for manufacturing’s value of goods produced in both 2014 and 2015."
In Indiana's primary, both Democrat presidential candidate Sen. Bernie Sanders and Republican Donald Trump ran on a platform promising to bring jobs back to the United States.
Sanders blames free-trade deals like NAFTA and the upcoming Trans-Pacific Partnership as making it easier for companies to move out of the country.
Trump has often touted a plan to levy a 35 percent tax on companies that move out of the country, such as Indianapolis-based Carrier Corp. which recently announced it would move to Mexico. The move would mean about 1,400 people would be out of a job.
According to Hicks' study called "The Myth and the Reality of Manufacturing in America," Carrier would be an outlier. It's not that jobs are moving out of the country, he maintains, it's that there are simply fewer jobs because people are becoming more productive.
That increase in productivity accounts for 88 percent of job losses in manufacturing, the study claims.
“There are major misunderstandings among the public and the media about the manufacturing sector,” Hicks said. “It isn't factory workers in Juarez or Beijing who've stolen factory jobs. The folks with master's degrees in robotics working in Palo Alto, California, have taken those jobs.”
Hicks does say that the Great Recession had an undeniable effect on the manufacturing sector, but the economy has more than bounced back. Furthermore, even though manufacturing floundered from 2008 to 2012, the industry as a whole grew by 17 percent from 2006 to 2013, meaning the years directly before and after the recession were boom years.
The "size of American manufacturing as represented by the total value of goods produced (GDP) has enjoyed a healthy growth trend almost since the founding of the republic ... and the last several decades," the study reads. "However, employment over the same period was largely stagnated."
And that is why so many American workers have lost their jobs. New forms of production, coupled with increased mechanization, just means it takes fewer and fewer people to make a new car, for example.
"Had we kept 2000-level productivity and applied them to 2010-levels of production we would have required 20.9 million manufacturing workers," Hicks said in the study. "Instead, we employed only 12.1 million."
International trade, which has also been charged with taking American jobs, can only be blamed for 4 percent of manufacturing losses over the past decade, Hicks said.
So what's the solution? Hicks said education must focus on getting children prepared for the modern manufacturing world because there will be a need for them to replace aging baby boomers.