Trump blames Mexico, China, and even Germany for taking US jobs and for US trade imbalances.

His message resonated with voters.

People can believe whatever “fake news” they want, but Trump’s theory on manufacturing jobs falls flat under any degree of scrutiny.

ZME Science reports Chinese Factory Replaces 90% of Human Workers with Robots. Production rose by 250%. Defects dropped by 80%.

According to Monetary Watch, the Changying Precision Technology Company focuses on the production of mobile phones and uses automated production lines. The factory used to be run by 650 employees, but now just 60 people get the entire job done, while robots take care of the rest. Luo Weiqiang, the general manager, says the number of required employees will drop to 20 at one point. Despite this reduction in staff, not only is the factory producing more equipment (a 250% increase), but it’s also ensuring better quality.

Adidas Moves Towards Robot-Only Factories

I commented on this before but the above article linked to it, and it’s worth another look: Adidas to Move Activity to Robot-Only Factories.

The footwear giant has announced it will move much of its activities from Asia back to Germany. The company unveiled ts prototype “Speedfactory”, a state-of-the-art, 4,600 square-meter facility which will automate most of the work.

After achieving success in Germany and the rest of Europe, Adidas slowly moved their factories to Asia, motivated by cheap labor. They now employ half a million people on the continent, but robots are slowly becoming cheaper than cheap manual labor.

Adidas produced 301 million pairs of sports shoes last year, but the demand still surpassed the offer, with the company aiming to produce 10% more. Shirts might also be produced at the same factory. The move will, of course, hash many jobs in Asia, creating only a few in Europe.

Amazon’s Robotic Supermarket


Digital Trends reports Run by robots: Amazon’s high-tech supermarket may only need three employees.

Amazon already has one of its revolutionary “Go” grocery stores open as part of a trial. If you missed the launch at the end of last year, it’s a place where you can just walk in, take what you need, and leave. There are no lines and no cashiers. Just choose, grab and, well, go.

The store’s “Just Walk Out” sensor-based technology detects when you pick up something from the shelf and, when you leave the store, charges all of your items to your account.

There’s talk that it’s also planning a far larger version of the high-tech store, with robots doing much of the work.

The supermarket might cover floor space of up to 40,000 square feet and, alongside the robots, be staffed by between three and 10 employees at any one time, an individual claiming to have knowledge of the plan told the New York Post this week.

Such a location would comprise two floors, with the first floor offering around 4,000 “goods that shoppers typically like to touch such as fresh fruits and vegetables, eggs, meats and cheeses, and grab-it-and-go stuff like beer and wine,” the source said. The second floor would have an army of robots picking and packing from a larger range of items — up to 20,000 different products – fulfilling online orders made by the shoppers downstairs or from people online at home who then drop by later to collect their items.

While Amazon’s smaller Go store is already up and running in Seattle as part of a trial, the company refused to confirm to the Post that it had plans for a much larger version.

However, if the source proves reliable, Amazon’s plan to automate the store with robots will come as little surprise to many observers.

Manufacturing Employment


Trump and Navarro moan about NAFTA causing a loss of US manufacturing jobs. If anything, NAFTA stabilized or increased US manufacturing jobs for six or seven years thanks to increase in bilateral trade.

The demise in US manufacturing jobs started in June of 1979, long before anyone could blame either Mexico or China.

Trump brags about saving 400-700 jobs at Ford and Carrier. They will vanish under more automation.

If Adidas brings a factory to the US or Toyota expands US production, manufacturing jobs will rise by another 800 or so. Then what?

Manufacturing may indeed return to the US, just don’t expect many jobs to return with it.

Meanwhile, automation is spreading to other areas. The big hit to jobs comes when millions of long-haul trucking jobs vanish due to self-driving technology.  Expect self-driving trucks to be dominant no latter than 2022-2024, and possibly much sooner.

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  3. Hugo Salinas Price and Michael Pettis on the Trade Imbalance Dilemma; Gold’s Honest Discipline Revisited

My challenge to the Secular Stagnation Theory of Summers has gone unanswered.

Mike “Mish” Shedlock