Labour's love lost in USA: Lutnick's Trumpian dream of highly-paid factory jobs with low-entry barriers is, well, a dream

America's great institutions, one hopes, will resist Trump's attempts to beggar its future. If the judiciary and Congress, for instance, resist his attempts to dismantle immigration law and impose import tariffs, the nation's two dollar-symbiont strengths - innovative skills and cheap imports - may be sustained. Without this, despite presidential bullheaded-ness, the road could lead to economic perdition.

Which makes recent pronouncements by US commerce secretary Howard Lutnick all the more bizarre. Last month, in a discussion near a TSMC factory site in Arizona, he prophesied that the future workplace would consist of highly-paid factory jobs with low-entry barriers for the average American. The new TSMC facility was proof, according to Lutnick, that Trump's tariff strategy was working, and that high-end manufacturing - from microchips to pharmaceuticals - would eventually return to America, without the need for foreign manpower.

But there are at least three reasons why one should be sceptical of any such assurance:

Automation ahoy During the Industrial Revolution, capitalists organised labour to facilitate streamlined, and often siloed, processes, and achieve economies of scale. More recently, the digital revolution enabled new labour specialisations, coupled with process standardisation, resulting in the monopolistic aggregation of demand and supply.

Now, with the advent of AI and robotics, profit-hungry companies like TSMC and Apple (both of which are negotiating with Trump 2.0 to move operations onshore), can only be motivated to manufacture in the US if their production hubs were allowed to be labour-light and automation-heavy.

Lutnick admits as much, stating that the factory jobs he has in mind have little to do with production and everything to do with operational maintenance. That is to say, humans, having been relieved of repetitive tasks on the shopfloor and in office, would now take up another, and assist in making sure that robots and AI programs functioned effectively. In his mind, high-school students could easily be trained to be technicians and earn an annual starting salary of up to $90,000 - more than 10% higher than the current dual-income median American household income.

Weak links Creation and sustenance of new jobs is not so neatly solved as a problem in arithmetic, despite Lutnick's belief that tariffs will reduce the deficit by 1% of GDP - or $300 bn, a number to which he often reverentially alludes, making it a talisman, along with the words 'great' and 'greatness' - and create new employment opportunities.

The problem is that demand for the same will quickly reach a natural limit because:

For every human that is replaced by a robot, only a small fraction can remain employed to ensure technical uptime, if profits are not to be eroded altogether.

Only a finite number of new factories will be set up in the US in the foreseeable future, quickly resulting in a competitive and over-saturated market for these skills, before they are also automated to sustain profitability goals.

So far, the only thing to show for this rhetoric is a record trade deficit in March, which increased by 14% over February, as businesses increased imports ahead of the threat of new tariffs. Since the economy consequently contracted by an annualised 0.3% in Q1 2025 - and could further contract as counter-tariffs hit exports - the US should carefully consider the efficacy of a tariff war to reset the balance of trade in general, and to boost domestic employment in particular.

But Lutnick, undeterred by numbers emanating from his own department, has masterfully imitated Trump, combining the anacoluthon with the non sequitur - discontinuous sentence construction with a conclusion that does not logically follow - to affirm, 'This is tradecraft... high school educated... great jobs!'

Unworkable model Moreover, Lutnick claims, '...this is the new model, where you work in these plants for the rest of your life, and your kids work here, and your grandkids work here.' Even if one believes that this form of modern bonded labour or neo-feudalism - what Lutnick calls 'tradecraft', in the wholly unproven belief that a career dedicated to servicing robots is as engaging as the business of espionage - is not abhorrent to Americans, the question of their willingness to pursue such a profession remains.

A Deloitte report predicts the creation of about 3.8 mn new manufacturing opportunities by 2033, of which more than half will go unfilled because of labour supply constraints. This is partly because only 14% of Gen Zs, who will make up 30% of the US workforce by 2030, are willing to consider factory jobs. But largely because there just aren't enough skilled domestic workers in the first place.

Which brings us back to our original premise. Even a confederacy of dunces should not expect to make America great again through unilateral labour substitution practices, including restrictive immigration and prohibitive tariff policies. Instead, it should embrace multilateral labour arbitrage: import talented immigrants and outsource high-cost base manufacturing. That may just restore America's fortunes again.

The writer is founder-CEO, ALSOWISE Content Solutions


(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com)