Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.
Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US. With all that’s happened lately in Washington, I wrote a special sense check, Entry #332.
One of the contributing factors to the Revenge Revolution will be a technology tsunami, which I believe is rapidly headed toward US shores. Fifteen recent entries addressed various aspects how the tech tsunami might: (i) affect the US economy and family incomes; (ii) be mitigated by taking certain actions. The series of entries is available as an eBook. This entry is an supplement to the booklet and now included with the booklet. (Download: 19 06 01 Tech Tsunami Booklet with Supplement)
The impact of the technology tsunami can easily be viewed as an abstract concept, especially if one is not affected directly. For example, you read an article about technology replacing someone’s job. Then the person replaced finds another job, which is fairly easy in today’s labor market. Reader thinks, “What’s the net effect on the person whose original job was replaced by technology? Zero. What’s the net effect on the unemployment rate? Zero. Time to move on to the next article.”
But, hold on, there’s more to this story. What prompted this blog entry was an article in the New York Times about a family whose members had worked at the GM Lordstown, OH plant almost from the opening day of the facility.
The Lordstown plant was built in the mid-1960s, but over the years GM continued to invest and upgrade the facility. What resulted from investments in Lordstown and other plants throughout North America was increased potential capacity with lower labor content per car/truck produced. Thus, more output with fewer employees. (As I wrote in late 2018, although I had no first-hand information, based on my experience inside GM, closing Lordstown, and other plants in North America, seemed justified.)
What happens to workers when a GM plant closes? Depending upon an individual’s seniority and the number of jobs available at other facilities, some laid-off employees might be eligible to transfer to another GM plant. Some laid-off workers at Lordstown met the criteria and have transferred.
What about workers who aren’t eligible to transfer or who don’t want to transfer, which often involves relocation? Some training is available for other types of jobs, which are usually non-automotive and often at lower pay. In addition, some laid-off workers, again depending upon seniority, receive from GM supplemental unemployment benefits for a limited period.
Back to the family featured in the NYT article. If you haven’t read the article, it’s worth a read. (19 05 28 NYT Lordstown Shutdown Employee Impact Examples ) The short version is the father gets out of the military, goes to work at the Lordstown plant soon after it opens. Over time the father becomes a representative of the union. The son, born after the father starts at Lordstown, doesn’t study much in school but is confident he will get a job at the plant, primarily because of his father‘s position with the union.
After completing high school, the son is hired and one of his jobs is prepping cars before final painting. Painting is an areas where the auto industry has installed as much technology as possible over the years to improve the quality and consistency of the finish. The implementation of technology in the paint shop has dramatically reduced employment. At Lordstown plant the number of employees declined from 38 to 4, a decrease of almost 90%. While the decrease in employment in the paint shop is at the high-end, substantial declines in employment from technology have affected body welding, engine machining and other high-precision areas with high labor content.
At the time of closing, the son had worked at Lordstown for 25 years. While no specific age was cited in the article, the son is probably in his mid to late 40s. With his years of service, he’ll be eligible for a modest pension from GM. However, he has at least 20-25 years left before being eligible for Social Security and Medicare.
Where does the son find another middle-class paying job given his limited education and skill level? Another job in the auto industry unless he relocates to another GM plant. Even if he finds an auto job, he runs a high risk of losing it given the continuous implementation of labor-saving technology by the auto companies and suppliers.
The extent of how many jobs in the auto industries (and other industries) are being eliminated by technology goes far beyond the assembly plant, which most people think of. In an earlier blog entry I mentioned an auto supplier in Fort Wayne, IN that bends tubing to make exhaust systems for cars and trucks for many auto OEM’s. If you don’t think there are lots of twists and turns in your vehicle’s exhaust system, next time you see a car or truck up on a service rack, go take a look underneath.
The process of bending tubing might seem straightforward (no pun intended) until one thinks about what happens when a tube is bent. The metal on the “outside” of the bend becomes thinner and the metal on the “inside” of the bend wants to “crinkle.” Bending tubing can be much more complicated than it first appears.
The company that bends the tubes is a perfect example of the impact on employment of the coming technology tsunami. The company incorporates an extraordinary amount of high technology, with a plethora of very sophisticated machines…and very few people staffing those machines. The parking lot of the company is the tell-tale sign of the technology tsunami. The company operates 24×7 with significant daily output, yet has a small parking lot that even during the day when office staff is working, has plenty of empty parking spaces for visitors.
Is this just a story about how one family was affected by a GM plant closing or are there broader implications? If the attitude of the now unemployed son is at all representative, then US society has a growing problem. While the son apparently has not yet come to grips with the long-term implications of the layoff, he is searching for answers to “Why is this happening to me?” “Why, after 25 years of working at this facility, am I getting screwed?”
He’s very frustrated and believes that people in Washington “just don’t get it.” The frustration includes Trump, whom he voted for in 2016, and members of both parties. He’s also frustrated with large corporations, which he thinks suffer no penalty for shuttering plants and relocating operations to say Mexico.
The frustration and anger of the son is understandable. While from a business perspective I think GM is more than justified in closing the Lordstown plant, especially given some of labor problems over the years, the business justification does not eliminate the economic and social issues facing the laid-off workers.
We, as I keep suggesting is the proverbial societal we, need to help this family transition from pissed-off members of society to being productive workers in an ever-increasing technology-laden workplace. As it stands now, even with a small pension and some additional benefits, the son is the kind of guy who is ripe to be part of a Revenge Revolution. For those not familiar with northern Ohio, almost guaranteed he’s got a deer rifle or two and a bunch of ammo. Now, he’s out of a job, has shrinking income, thinks politicians don’t understand the problem, and thinks large corporations are exploiting people and communities. Not a good combination. (The son is much like the character “Sandy” who appears periodically in the blog entries.)
Without some serious societal effort, the ranks of this group are going to grow. Making America great again does not involve trying to reintroduce high-labor content products or industries from decades past. The implementation of technology to replace humans is going to continue. All types of jobs and skill levels will be affected, from manufacturing to legal to medical. Without a national plan to begin lifetime education for people of all ages, from 6 to 66 (and older), the US is going to face a growing segment of the population which is extremely angry and poses a growing threat to a stable democracy.
Reminder: For more about how the technology tsunami might affect the US economy and culture, and ideas to help mitigate the effects, there’s a free ebook waiting for your download. The book is a compilation of this entry and 15 earlier blog entries about the technology tsunami. Comments welcome. (Download, 19 06 01 Tech Tsunami Booklet with Supplement)