Behind the glitter of CES 2017 is the reality that few sectors of the American economy have been so hollowed out of jobs as the making of consumer electronics. Would Trump change that?
The focus of every Consumer Electronics Show is on the new gadgets our nerd overlords will bring to amaze us, amuse us and perhaps make our lives easier. Those of us who can afford it, at least. (You can follow live coverage by Seattle Times reporters of CES 2017 here).
According to my colleague Matt Day, the president of the Consumer Technology Association, the trade group behind CES, is upbeat about the Trump administration. “The truth is Trump needs tech, and tech needs Trump,” he said. “There’s more of a parallel agenda than you would imagine.”
Hmmm. Like all industries, they want lower taxes and regulation. The public interest…what’s that? But consumer electronics are a particular intersection of tragedy, greed and loss for American manufacturing. Or at least it should be for those who voted for the man who wants to “Make America great again,” including through tough sanctions against unfair trade.
In the era after World War II, when Donald Trump was a young man, the United States virtually invented the consumer electronics sector for a growing middle class — and then lost it. The classic example is televisions, once made here, now made in Asia. According to a 1986 count by researchers at the congressional U.S. Office of Technology Assessment, 113,600 workers were directly involved in making consumer electronics in 1974. By 1985, it was a little more than 68,000. Today, the numbers are in the hundreds here — even if the types of devices have proliferated.
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As in many areas, foreign competition came in, undercutting more expensive American products. In many cases, these countries used unfair trading practices. But U.S. companies also invested in operations abroad, where wages were a fraction of those paid to Americans, while starving many domestic plants of cutting-edge technology investments.
Now consumer electronics may be designed and put in the cloud in America — a particular gift for Seattle — but the devices themselves are invariably made in Asia. For example, most of the big names in consumer tech make products at the massive Foxconn factories in China.
One sidenote: A nascent effort to return television manufacturing to America has faced the additional hurdle of patent lawsuits.
The bottom line as CES seeks to amaze? Pay attention to the new administration. If it is serious, this would be a high-value, high-productivity sector where it might focus its efforts, even tariffs, while seeking to rebuild a domestic industry.
Today’s Econ Haiku:
Richard Sherman pouts
Media make him wealthy
Now clam up. That’s rich