While Donald Trump has been appointing and the media has been analyzing Trump’s Twitter account posts, the rest of his fan base has been waiting for news about lost jobs. As most of us know, the coal and steel industry has seen tumultuous decades. But saying President Obama and Hillary Clinton were ultimately responsible for every man’s lot in life is simply overstating the world’s economic engine.
Much of the damage occurred long before either Clinton and Obama graced our presence. For instance, experts say the notion of bringing Pittsburgh back to its post-World War II heyday, with large mills supplying tens of thousands of jobs, isn’t going to happen. By 1982, 133,000 steel workers in the area had been laid off. By January 1983, the job losses in the steel industry contributed to a 17.1 percent unemployment rate in the Pittsburgh area.
In upstate New York, the Lackawanna Steel Company was founded in 1840 and existed as an independent company until 1922. In 1922, Bethlehem Steel bought Lackawanna and operated the facility until operations ceased in 1982. Bethlehem filed for bankruptcy in 2001. Ala in all, Lackawanna once employed approximately 20,000.
Inexpensive steel imports and the failure of management to innovate, embrace technology, and improve labor conditions contributed to Bethlehem’s demise.
In a strange reversal of Trump’s fan base, critics in that era claimed protectionist steel trade policies created a lack of competitiveness as American steel producers like Bethlehem were shielded from foreign competition by quotas, voluntary export restraints, minimum price undertakings, and anti-dumping and countervailing duty. These measures were in effect for 30 years preceding Bethlehem Steel’s collapse.
To return steel and coal industries back to the days of yesteryear, Trump has to overcome several problems.
First problem that few, if any, have discussed is that steel foundries are gone. To put it bluntly, there is no infrastructure to rebuild. The former Bethlehem steel plant is now the site of the Sands Casino and the former Lackawanna Steel Company site is a wind farm.
Secondly, manufacturing jobs haven’t disappeared just because of trade deals, cheap imports and foreign tariffs. Today’s manufacturers use everything from robots to product-tracking systems to trim costs and increase efficiency and quality. That often means fewer jobs than companies needed to do the same work years ago.
Third, it’s well known coal helped drive the steel industry. Yet today, there’s easier coal to get than those in the Appalachian mines. Once mines have closed they don’t reopen when cheaper alternatives exist. For instance, fracking technology has made natural gas an abundantly cheap form of power.
Globalization and opening of world markets; a slowdown in Chinese manufacturing, creating massive over-capacity in its steel plants; a subsequent boom in cheap Chinese exports and a collapse in the global steel price will not be rectified by Trump in 48 months.
Whether or those manufacturing jobs could have been saved doesn’t matter. They aren’t coming back, at least not most of them. How do we know? Because in recent years, factories have been coming back, but jobs haven’t. Factories built today are heavily automated, employing a small fraction of the workers they would have a generation ago.
For those older among us who hold liberal and progressive political views, let’s not forget we survived Nixon, Reagan, and Bush. It wasn’t pleasant but we survived. We will survive Trump. This is not to say that the policies of past presidents weren’t flawed, and that they did not make any lasting impact. They were and they did. Still, we survived. We will survive Trump. As of today, we don’t really know what will happen under Trump because nothing he has said so far means much. He seems not to have much commitment to his own words.
Categories: Life Lessons