ALLENTOWN, Pa. (AP) - In the 1960s, Lehigh Valley high school graduates had a lot of options.
Manufacturers such as Air Products, Ingersoll Rand and Bethlehem Steel offered well-paying jobs that promised a route to the middle class.
“You would expect to go get a job, get married, have kids, get a pension one day and everyone would be fat, dumb and happy,” said Frank Behum, who worked at Bethlehem Steel for more than three decades before retiring in 1997, months before the company went under.
Nothing really replaced those jobs. They required hard work under sometimes grueling conditions, but they paid more than just a living wage and most didn’t require a college education, said Behum, now president of the Bethlehem Steelworkers Archives.
“We were living the middle-class dream,” Behum said.
It’s a dream Hillary Clinton and Donald Trump have promised to make more achievable as they have focused on Pennsylvania, a Rust Belt swing state that was a one-time manufacturing powerhouse.
Both have pledged to reinvigorate American manufacturing, but even if they succeed, it’s unlikely to translate to major job growth, especially for unskilled workers, economic experts say.
The problem neither takes into account? Automation. A growing number of the back-breaking, physical production jobs once done by workers are now handled by machines.
“You have a much better chance of bringing back various types of manufacturing output than you do at bringing back large numbers of jobs,” said Frank Levy, an economist and professor emeritus at Massachusetts Institute of Technology.
U.S. manufacturing employment peaked in 1979, as the “rural renaissance” saw companies expand production facilities into rural areas and small cities such as Scranton, Bethlehem and Altoona, Blair County, Levy said.
But it began to decline as developing nations added factories using employees who earned a fraction of U.S. workers’ wages.
In 2000, when China entered the World Trade Organization, factory workers there made 72 cents per hour, compared with about $15 an hour for U.S. workers, said Hal Sirkin, a manufacturing expert with Boston Consulting Group. The result was a steep decline in U.S. manufacturing jobs.
The effects were particularly acute in smaller cities that had benefited from the industry’s rapid post-war expansion, Levy said.
“The huge increase in Chinese imports since the 2000s devastated certain communities. It didn’t give anybody any time to adjust,” he said.
The United States has lost 5.4 million manufacturing jobs since 1990, with 5 million of those losses coming after 2000, when China entered the WTO, according to data from the federal Bureau of Labor Statistics. The Lehigh Valley lost about 30,000 manufacturing jobs in that period, 20,000 since 2000.
Global trade has been a central theme of Trump’s campaign, but the two candidates’ positions on manufacturing and trade are closer than you might think.
The plans
Both say they would reject the 12-nation Trans-Pacific Partnership trade agreement, although Clinton initially supported the deal. Clinton and Trump have both said they would aggressively enforce U.S. trade laws and global trade agreements, prosecuting violators, including China, which has manipulated its currency to gain a trade advantage. Trump said he’d slap Chinese goods with high tariffs if the country refuses to abide by its obligations under the WTO.
He also promises to slash corporate taxes from 35 percent to 15 percent and to reduce regulations.
When it comes to manufacturing, Trump goes a step further, promising to renegotiate the North American Free Trade Agreement to achieve better terms for U.S. companies when trading with Mexico or Canada or to withdraw from the deal entirely. He’d slap Chinese goods with high tariffs if the country refuses to abide by its obligations under the WTO. He’d also allow manufacturers to fully expense the cost of new plants and equipment.
Trump has blamed Clinton and her husband, former President Bill Clinton, for supporting NAFTA and allowing China into the WTO, while Hillary Clinton points out that many of Trump’s own branded merchandise, and some of the steel he’s used in his buildings, were made in China.
Clinton’s plan focuses on improving U.S. manufacturing capacity by creating a $10 billion Make it in America plan to fund job-creating partnerships between business, labor and higher education. She’d create tax incentives to encourage business investment in communities that have been hit hard by manufacturing losses; and hit companies that move jobs or headquarters overseas with an “exit tax.”
She’d also offer manufacturers tax credits to train workers for increasingly complex jobs in the industry, cut red tape and increase access to capital and markets for small businesses and entrepreneurs, and spend $25 billion to support “entrepreneurship and small business growth in underserved communities.”
Asked for specifics on how they would respond to growing manufacturing automation, a Clinton spokesperson pointed to a focus on promoting growth in new industries and technologies such as solar energy and 3D printing. The Trump campaign did not respond.
Some in the industry argue American manufacturing is already on the road to recovery.
Manufacturing back?
U.S. manufacturing output and to a lesser extent employment have actually been growing in recent years, thanks to a narrowing of the gap in production costs between China and the United States, Sirkin said. In some industries, costs are now roughly equal when shipping is factored in.
“That is why we are not really seeing lots of manufacturing leaving the U.S., it is more going into the U.S. over the last couple of years,” Sirkin said.
U.S. manufacturers have added about 800,000 jobs since 2010, while in the Lehigh Valley metropolitan area -which includes Lehigh, Northampton, Carbon and Warren counties -manufacturing employment has grown by about 1,500, according to the Bureau of Labor Statistics. But that hasn’t restored employment levels in manufacturing to pre-recession levels, let alone U.S. manufacturing’s peak.
As a sector, manufacturing contributed $5.6 billion, more than any other, to Northampton and Lehigh counties’ combined gross domestic product in 2015, according to the Lehigh Valley Economic Development Corp. Despite that, it ranked third behind health care and retail in terms of employment, with 974 companies employing 36,159 people in the Lehigh Valley metro area in March according to the Federal Reserve.
Instead of large companies employing thousands, the typical Lehigh Valley manufacturer now employs between 20 and 70 workers, said Don Cunningham, president and CEO of the Lehigh Valley Economic Development Corp.
“Twenty years ago there would be a lot more jobs in manufacturing,” said Cunningham, whose agency tries to retain and grow local companies while luring new employers. “Today the job number is lower because of automation and technology, primarily.”
Still, the Lehigh Valley has added jobs in manufacturing over the last few years, Cunningham said, and he expects that to continue.
“You are not going to see this huge spike of jobs because manufacturing today just does not … require a lot of jobs,” he said. “It requires higher skills on the shop floor but in term of net jobs, the best we can do is, kind of, hold steady and keep inching up.”
Not all manufacturing jobs are created equal. Most jobs at high tech manufacturers such as medical device company B. Braun offer better wages than those at juice maker Ocean Spray.
In general, though, they pay relatively well, offering wages in the realm of $25 an hour, Cunningham said, especially for workers with technical training. The average weekly wage for Lehigh Valley manufacturing jobs in March was $1,305 according to the Federal Reserve Bank of Philadelphia.
There remain some lower-paying production jobs at places such as Just Born and Majestic Athletic that don’t require special skills, but for most workers with only a high school diploma - more than 40 percent of the Valley’s adult population - the best option is often warehouse work.
“Right now, in our economy in the Lehigh Valley, that is the workforce that is really helping to fuel this industrial e-commerce, warehouse, distribution, pick-and-pack workforce,” Cunningham said.
Distribution jobs, which are growing rapidly, offer wages in the $12 to $15 an hour range, or an average of $804 a week, according to the Federal Reserve. But they aren’t safe in the long term, Cunningham said.
“Technology and automation is going to come to those places as well, just the way it caught up in manufacturing,” he said.
The role of technology
Technological change is a constant force in the economy, said MIT’s Levy. At one time, agriculture was the country’s largest employer. Now it employs about 2.5 percent of Americans thanks to mechanized farm equipment.
“It took much less labor to run those machines than to pick things by hand,” he said.
That’s now happening in manufacturing, as robotics and other technologies continue to automate the means of production.
“The trend in U.S. manufacturing over the last 30 years - more and more output with fewer and fewer workers - is exactly like the transformation that revolutionized U.S. farming over the last 100 years or more,” wrote Mark J. Perry, a scholar with the American Enterprise Institute, a pro-business think tank.
But while non-skilled jobs are displaced, those technological advances aren’t necessarily a bad thing.
The United States may have to concede some low-wage manufacturing products such as textiles to developing countries but it has to do whatever it takes to make sure its manufacturers of high-tech goods are operating as efficiently as possible.
“If the free market says we should be producing tennis shoes in Indonesia rather than in Pennsylvania, that’s one where we have to say, this is the expense of participating in a global economy,” said Adams Nager, a researcher with the Information Technology and Innovation Foundation. “They make our tennis shoes, but we still make their semi-conductors, wind turbines and smart cars.”
If U.S. manufacturers don’t innovate, other countries will, and domestic producers creating high-value products will start losing out to competitors in places like Germany or China. Putting resources into emerging industries that pay well but don’t create as many jobs, will position the United States to be at the forefront of global trends, he added.
But improving training might be the real key to America’s future competitiveness in manufacturing, Nager said.
“One of the biggest barriers to increasing employment in manufacturing now (is) there aren’t enough people who have the basic technical skills or have learned a skill like welding, there are not enough engineers and computer specialists,” he said.
Although automation will make it difficult to significantly increase the number of jobs available in manufacturing, those that remain will be better, said Paul Flora, senior economic analyst at the Federal Reserve Bank of Philadelphia.
“The wages that accrue to those individuals that are still in the field should go higher, though, based on the skills required,” Flora said.
And the Lehigh Valley’s manufacturing sector may fare slightly better than some other regions because it can lure companies from New Jersey and New York with its prime location and lower costs of living and doing business, Flora said.
“You can continue to attract firms, thereby, you have a better chance of having employment hold steady and maybe even grow sometimes,” he said. “If you look back at the recent history, you have lost 30,000 (manufacturing jobs) since 1990 and have only gained 2,000 recently, so you’d have to be a little cautious about pinning your hopes on too much employment growth.”
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