How the story of the decline of shoe manufacturing jobs shows today’s trade warriors are stuck in the past

  Pethokoukis

Shoe manufacturing used to be a pretty big deal in the United States. In 1932, International Shoe was added to the Dow Jones Industrial Average. By the early 1940s, nearly a quarter-million Americans were employed in the industry. But mid-century America was Peak Shoe. Or, or at least, Peak American Shoe Job.
A 2014 Wall Street Journal piece noted that shoe-making jobs “began falling sharply in the 1970s and have leveled off at about 14,000 in the past two years, according to government data.” The work could be done much cheaper elsewhere, part of “a wave of low-cost manufacturers in Asia and other parts of the world, engulfing 98% of the American market.”

REUTERS/Kham.

Take the case of Nike, currently part of the Dow 30. It’s a big, profitable shoe and apparel company that employs 60,000 people. But only a third is US-based. And those jobs represent, the Washington Post explained in a 2015 piece, “only a small fraction of its global workforce, estimated at over 1 million, with most in manufacturing jobs in low-wage countries such as Vietnam and Indonesia. While Nike makes some shoe components in the United States, such as its trademark Air soles, it has not assembled shoes in the country since 1984.”
Now some politicians are promising that a combo of tariffs and savvy trade negotiations can “bring the jobs back” — assuming we would want those very low-wage jobs — and restore America to an age of mass manufacturing employment. Shoe jobs for all. But if the jobs came back, the scenario would likely resemble this one, via the Guardian:

Adidas, the German maker of sportswear and equipment, has announced it will start marketing its first series of shoes manufactured by robots in Germany from 2017. More than 20 years after Adidas ceased production activities in Germany and moved them to Asia, chief executive Herbert Hainer unveiled to the press the group’s new prototype “Speedfactory” in Ansbach, southern Germany. … The 4,600-square-metre plant is still being built but Adidas opened it to the press, pledging to automate shoe production – which is currently done mostly by hand in Asia – and enable the shoes to be made more quickly and closer to its sales outlets. Large-scale production will begin in 2017 and Adidas was planning a second “Speed Factory” in the United States in the same year, said Hainer. … Hainer insisted the factories would not immediately replace the work of sub-contractors in Asia. “Our goal is not full automatisation,” said Gerd Manz, head of innovation and technology.

I am sure a local Speed Factory would create some jobs, including high-skill ones. But that is a far cry from 1950s General Motors America. By one estimate, productivity growth — not unfair trade deals — accounts for 85% of the job losses in manufacturing between 2000 and 2010. It’s the rise of the robots. This from FiveThirtyEight’s Ben Casselman makes the point well: “Because of rising wages in China, the need for shorter supply chains and other factors, a small but growing group of companies are shifting production back to the U.S. But the factories they build here are heavily automated, employing a small fraction of the workers they would have a generation ago.”  Indeed, Apple and Samsung supplier Foxconn says it has replaced 60,000 factory workers in China with robots. (I wrote about China’s automation push in my The Week column.)
It’s a similar story in the apparel industry. There has been a rise in clothing startups, but it’s niche and artisanal and doesn’t seem likely to be a massive manufacturing job creator for the working class. And as these firms try and scale, they will turn more and more to automation. From a recent Fast Company piece:

Of course, not all startups are able to grow as quickly as American Giant and Yogasmoga, and therefore take advantage of the economic efficiencies that occur at such a large scale. This is where Manufacture New York hopes to make a difference. Based in a factory in Brooklyn, the organization helps up-and-coming designers understand the production process and tap into a local supply chain. Designers work alongside engineers, textile specialists, sewers, and other manufacturing experts to find ways to create products at reasonable prices. Manufacture New York has already launched more than 90 labels that are able to benefit from the scale that Winthrop is talking about.
Companies committed to manufacturing locally are innovating at the level of fabric and design, but they also have to be creative in terms of the entire supply chain. For instance, Manufacture New York’s Bland is keen to find a way to improve the process of picking out garments in a warehouse and packing them when a customer makes an order. This is a laborious process that is still largely done by hand, but she believes it can be automated. Bali and Winthrop spend their days cracking logistical puzzles like how to shave off minutes on transporting fabrics from mills to factories or how to maximize each swath of fabric when cutting clothing patterns.