Donald Trump has made a lot of promises during his campaign that he won’t be able to keep. But he may be able to come up with a close enough substitute for one of his big, difficult promises: a return of manufacturing employment.
Manufacturing was long a source of middle-skill, medium-wage jobs for men without college degrees, but employment has declined massively over decades due to a combination of automation and international trade.
Trump has promised to bring those jobs back, but he won’t be able to because trade policy changes only affect trade flows at the margin, and because automation is a bigger factor in the employment decline than trade. Contrary to Trump’s claims that we “don’t make anything anymore, manufacturing output in the United States is higher than ever, but it takes many fewer workers to make a given amount of goods.
But there’s another sector where public-policy changes could do a lot to create new middle-skill, medium-wage jobs for men: construction.
Trump has talked about his desire to increase government spending on infrastructure, which would create new construction jobs. Unsurprisingly for a real estate developer, he’s also argued in the past for tax breaks to encourage new private construction. Even in “The Art of the Deal,” he criticised the Tax Reform Act of 1986 for disfavoring real estate investment.
Housing construction has picked up since the great recession, but remains below normal levels. Changes to policy around mortgage lending or low-income housing subsidies or taxation of real estate investment could encourage more housing starts. It would also allow Trump to say we’re building things in America again.
If Trump wants a revival of blue-collar employment, he won’t have much luck with manufacturing, but he could make a priority of encouraging both public and private expenditure on construction.
This is an editorial. The opinions and conclusions expressed above are those of the author.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.