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China, immigrants or robots: who is 'stealing' jobs in the US?

President Trump says immigrants 'steal' jobs from Americans. But the data suggests robots are a bigger threat.

You are in the supermarket, you arrive at the checkout and instead of making a line you now have the option of using a machine to pay for your purchase without interacting with the human being..

Restaurant chains where you can order food on a screen; driverless trucks on Texas roads ... these are just a few examples of how robots are taking over parts of the labor market.

One of the themes President Donald Trump has exploited in his campaign speeches is that immigrants "steal" the jobs of Americans. He has said that "illegal immigration hurts American workers" and that the working class is paying the price of mass illegal immigration which means there are fewer jobs available, and at lower wages.

While there is little or no data to support the president's claims, there is another much more tangible threat to employment: automation and artificial intelligence, experts say.

In fact, robots are at the center of the campaign of one of the Democratic candidates for president, Andrew Yang. For the former Silicon Valley executive, the real 'enemies' of jobs are machines, not immigrants.

"If you go to a factory ... in Michigan you will not find wall-to-wall immigrants; you will find wall-to-wall robots and machines. Immigrants are being scapegoated for issues they have nothing to do with in our economy," Yang said during the second Democratic debate, held in Detroit.

Artificial Intelligence (AI) and automation promise and make everyday life easier and do the hard work of many men. But at the same time this innovation and the sum of increasingly accelerated technology are eliminating tasks that people used to do and it brings with it a threat to jobs as we know them. One of the many forecasts, that of the global consultant McKinsey Institute, says that up to 73 million jobs could be eliminated.


Machines vs. Humans: robots are here

A perfect illustration of automation is this image comparison: a Mercedes Benz car assembly line (on the left) and what a Ford Motors car was like in the 1930s.

Since the arrival of the Industrial Revolution in the 18th century, workers have feared being replaced by machines. In the the 21st century, advanced technology has created two schools of thought; those who believe that, as always happens, technology will take away some jobs, but generate others, and those who believe that this time is different.

"Technology throughout history has displaced people. You can see how people feared these (technological) changes in films of the early 20th century," said Belinda Román, professor of economics at St. Mary's University in San Antonio, Texas. "But the difference this time is that it's happening much faster than we can rationally comprehend."

Wrong enemies

Across the spectrum of Republicans and Democrats, the only candidate who is talking about that issue seems to be Yang.

"Jobs, jobs, jobs", was one of Trump's campaign promises, especially to 'blue collar' workers. But the president says that the way to win back those jobs is to tackle trade inbalances and immigration, leaving automation aside.

"When we talk about undocumented immigrants, we traditionally mean that they occupy non-specialized jobs. In areas such as the countryside or in manufacturing, immigrant work is essential since it is usually hard and it pays the minimum. This allows someone who speaks English and has more education to do more specialized work," said Mayra Rocha, a Hispanic business expert, founder of El Dinero si Importa.

Immigrants represent 17 percent of the country's workforce, according to the Bureau of Labor Statistics. Several reports, such as that of the National Academies of Science, Engineering and Medicine, argue that immigrants do not take jobs away from Americans. The report cites works by 14 academics from Stanford, Harvard and other prestigious universities who concluded that there is "little or no negative effect on general wages and employment" on native born Americans.

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Farmland, for example, are usually owned by U.S. businesses, while immigrants are the ones who work the fields. On the other hand, immigrants who work in child and elderly care allow other Americans to enter other parts of the workforce.

The report notes that highly qualified immigrants arriving in the U.S. have had a significant "positive impact" because they have stimulated innovation that has helped create more jobs.


Globalization

Trump seems to be right about one thing: globalization has decimated the workplace.

"Technology is usually a positive factor for economies, but jobs do disappear when they are taken to other countries where labor is cheaper," says Rocha.

Globalization allows jobs to be relocated in China (or other parts of Asia and some Latin American countries) that has cheaper labor. According to research by economists at the Massachusetts Institute of Technology (MIT) there were up to 2.4 million jobs lost as a result of Chinese import competition between 1999 and 2011.

"This [Trump] administration is saying that we need to bring more jobs back to our country. But the problem is that for companies it is still cheaper to buy a robot than to have many workers," said Román, the St Mary's University professor. "They are good for business, because they save money, but bad for workers," he added.

A case in point is an Indiana air-conditioning factory that Trump claimed to have saved in 2016.

In Trump's first year, he spoke with the managers of the Carrier plant who were planning to move 2,000 jobs to Mexico. The company at first agreed to save half the jobs, but later decided to invest in automation, firing hundreds more workers.


The most vulnerable jobs

A 2017 McKinsey Global Institute report on the impact of automation on the labor force, found that 50 percent of current work activities in the U.S. "are technically automatable by adapting currently demonstrated technologies" by 2030. About six out of ten current occupations have 30 percent of activities that are technically automatable, it added.

A worker without a university degree who, for example, has worked in a factory building auto parts, would likely lack the skills needed if a factory decided to automate his work. In many cases, they end up taking jobs in, for example, a supermarket where they are paid much less.

These new factories need more specialized computer workers who can 'supervise' or run the machines, but laid-off workers lack the opportunity to learn the necessary new skills. The least exposed are those whose work requires creativity, or people management and care of people.

David Autor, professor of Economics at MIT says that "medical support occupations (radiology technicians, nurses and others) are a significant and rapidly growing category of relatively well-paid jobs and medium skills."

Román said that although right now the most direct threat seems to be focused on jobs where university degrees are not needed, there are other positions such as bankers, "where more preparation is needed and different skills are required," which are also under threat. "The point is that everything that is computerizable will be computerized," she said.

Will it be different this time?

Despite this apocalyptic scenario pianted by Yang and others, others point to historical trends that suggest new occupations will appear. For example, in Michigan, the heart of the automotive industry, manufacturing employment has steadily increased since the end of the Great Recession of 2008.

But there are many experts who believe that this time will be different because automation will likely displace a whole generation lacking skills to perform new tasks.

Román said the problem is "how long will it take, for example, to train to do something new and adjust to a new reality? If instead you learn during the process, maybe you are ready for when the time comes."

What to do?

There are studies that suggest that these transitions can be softened if action is taken. The solutions range from taxing robots, to training programs for workers to have the tools to reintegrate, as well as stronger unions.

Yang, a former technology executive, proposes restoring the economic security of the middle class by giving each American a basic income of $1,000 per month, without any conditions. His argument is that this direct subsidy serves to mitigate the impact of automation in addition to giving a universal income to those who perform care tasks for which they do not receive payment, such as mothers who raise their children.

Among economic forecasters, whether apocalyptic or hopeful, there appears to be a consensus that at the current pace of technology automation will transform the labor force in the short and medium term. Having technological skills seems increasingly essential for almost all sectors.

"I think in general there will be a change. Surely there will be more focus on data, analytics, robotics and artificial intelligence," said Román.

Politics will also be impacted. In the 'Rust Belt' states of Michigan, Pennsylvania and Wisconsin, Trump won in 2016 promising to bring back jobs that he said had gone to China, ignoring the effects of technology and globalization. However, his administration has yet to come up with policies that offer workers more opportunities - beyond a trade war.

How that plays out remains to be seen. But, in the end, the impact of automation will likely depend more on long-term policies to better prepare and protect workers.

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