For years, Americans worried about the disappearance of manufacturing jobs were told that their loss would be more than offset by all the new jobs technology would create in the United States. What’s more, the jobs created by technology would stay in the United States, because they required skills that the Chinese and Mexicans—those now doing the manufacturing work formerly done by Americans—lacked. After several decades of stagnant wages, it is clear that this was a mirage, at best, and a lie, at worst.
Even some of the former pied pipers of the technology mirage are beginning to admit that the “new economy” they’ve promoted for so long actually promises hard times for America’s middle class. Steve Sailer took note of Tom Friedman’s column in the November 9 New York Times, where the grand panjandrum of globalization wrote this:
But thanks to the merger of globalization and the I.T. revolution that has unfolded over the last two decades . . . “the high-wage, medium-skilled job is over,” says Stefanie Sanford, the chief of global policy and advocacy for the College Board. . . .
To be in the middle class, you may need to consider not only high-skilled jobs, “but also more nontraditional forms of work” [according to “James Manyika, who leads research on economic and technology trends at the McKinsey Global Institute”] . . . Work itself may have to be thought of as “a form of entrepreneurship” where you draw on all kinds of assets and skills to generate income.
This could mean leveraging your skills through Task Rabbit, or your car through Uber, or your spare bedroom through AirBnB to add up to a middle-class income.
In other words, Tom Friedman is suggesting that Americans will need to run errands for rich people, drive strangers, and take in lodgers to maintain a middle-class income.
A more realistic take on manufacturing and technology than the one Friedman and his ilk have peddled for decades was offered by University of Manitoba professor Vaclav Smil in an interview with Clive Thompson in Wired on November 25. Smil, described by Thompson as an “ambitious and astonishing polymath,” told his interviewer that there is no substitute for manufacturing: “In every society, manufacturing builds the lower middle class. If you give up manufacturing, you end up with haves and have-nots and you get social polarization. The whole lower middle class sinks.” Smil also sees manufacturing as the key to innovation:
Most innovation is not done by research institutes and national laboratories. It comes from manufacturing—from companies that want to extend their product reach, improve their costs, increase their returns. . . . Innovation always starts with a product.
And Smil was refreshingly blunt when asked whether IT jobs can replace lost manufacturing jobs: “No, of course not. These are totally fungible jobs. You could hire people in Russia or Malaysia—and that’s what companies are doing.” One wonders if the United States would have taken steps to protect her manufacturing base if the New York Times and Wall Street Journal had occasionally aired views like Smil’s during the years they were busily promoting the technology mirage.
An integral part of the technology mirage has been the notion that Silicon Valley will somehow save the American economy. This, too, is false. Many of the companies based in Silicon Valley show little interest in employing Americans. Apple employs 700,000 Chinese to manufacture its products, and writer Joel Kotkin notes that employment in Silicon Valley has actually decreased by 40,000 since 2001. The prospect of technology destroying more jobs than it creates certainly looms on the horizon, if indeed we haven’t already crossed that threshold. In addition, many of the people who run Silicon Valley are alienated from America and indifferent or even hostile to ordinary Americans. A friend who works there told me years ago that he noticed that very few houses flew Old Glory on the Fourth of July or other American holidays. And many of the immigrants Silicon Valley imports don’t see themselves as Americans or like what they see of Americans. For example, Silicon Valley executive Nikesh Klara told The Weekly Standard’s Charlotte Allen that “The perception is that Indians are taking away good American jobs. The reality is that you Americans can’t turn out engineers fast enough.” Despite her dismissive reference to “you Americans,” Klara actually is an American citizen, born in Santa Clara to Indian immigrants.
Of course, there is no reason to suppose that Americans lack the ability to become engineers. It’s just that many Americans with the ability to become engineers or programmers have chosen other fields, as the H1B visa program that companies use to hire foreign engineers and programmers has driven down wages and free trade has gutted the manufacturing sector that used to provide stable employment to American engineers. Silicon Valley has been providing much of the financial backing for the immigration bill that passed the Senate last year, because it promises to expand the H1B program greatly, even though, as Kotkin notes, H1B visa holders currently take between one third and one half of new IT jobs in America, and the United States is currently graduating 50-percent more IT workers than are needed.
The damage done to the American economy by globalization and the infatuation with technology has been profound. The effects may even be irreversible. But things certainly will not get better as long as Americans continue to be dazzled by the technology mirage.