The real American factory killer? It wasn’t automation
Dylan Matthews at Vox wants you to believe that robots — not China — killed American manufacturing. Even if tariffs reshore production, he argues, they won’t bring back jobs because machines have already taken them.
This is not just wrong. It’s an ideological defense of a decades-long policy failure.
The jobs lost to offshoring aren't just the five million factory jobs that disappeared — the number is likely more than double that. The real toll could exceed 10 million jobs.
Yes, American manufacturing has grown more productive over time. But increased productivity alone does not explain the loss of millions of jobs. The real culprit isn’t automation. It’s the collapse of output growth — a collapse driven by offshoring, trade deficits, and elite dogma dressed up as economic inevitability.
Ford’s logic
To understand what actually happened, start with Henry Ford.
In 1908, Ford launched the Model T. What set it apart wasn’t just its engineering. It was the price tag: $850, or about $21,000 in today’s dollars.
For the first time, middle-class Americans could afford a personal vehicle. Ford spent the next few years obsessing over how to cut costs even further, determined to put a car in every driveway.
In December 1913, he revolutionized manufacturing. Ford Motor Company opened the world’s first moving assembly line, slashing production time for the Model T from 12 hours to just 93 minutes.
Efficiency drove output. In 1914, Ford built 308,162 Model Ts — more than all other carmakers combined. Prices plummeted. By 1924, a new Model T cost just $260, or roughly $3,500 today — an 83% drop from the original price and far cheaper than any “affordable” car sold now.
This wasn’t just a business success. It was the dawn of the automobile age — and a triumph of American productivity.
Ford’s moving assembly line supercharged productivity — and yet, he didn’t lay off workers. He hired more. That seems like a paradox. It isn’t.
Dylan Matthews misses the point. Employment depends on the balance between productivity and output. Productivity is how much value a worker produces per hour. Output is the total value produced.
If productivity rises while output stays flat, you need fewer workers. But if output rises alongside productivity — or faster — you need more workers.
Picture a worker with a shovel versus one with an earthmover. The earthmover is more productive. But if the project doubles in size, you still need more hands, earthmovers or not.
This was Henry Ford’s insight. His assembly line made workers more productive, but it also let him build far more cars. The result? More jobs, not fewer.
That’s why America’s manufacturing employment didn’t peak in 1914, when people first warned that machines would kill jobs. It peaked in 1979 — because Ford’s logic worked for decades.
The vanishing act
Matthews says manufacturing jobs vanished because productivity rose. That’s half true.
The full story? America lost manufacturing jobs when the long-standing balance between output and productivity broke.
From 1950 to 1979, manufacturing employment rose because output grew faster than productivity. Factories produced more, and they needed more workers to do it.
But after 1980, that balance began to shift. Between 1989 and 2000, U.S. manufacturing output rose by 3.7% annually. Productivity rose even faster — 4.1%.
Result: flat employment. Factories became more efficient, but they didn’t produce enough extra goods to justify more hires.
In other words, jobs didn’t disappear because of robots. They disappeared because output stopped keeping pace.
The real collapse began in 2001, when China joined the World Trade Organization. Over the next decade, U.S. manufacturing output crawled forward at just 0.4% a year. Meanwhile, productivity kept rising at 3.7%.
That gap — between how much we produced and how efficiently we produced it — wiped out roughly five million manufacturing jobs.
Matthews, like many of the economists he parrots, blames job loss on rising productivity. But that’s only half the story.
Productivity gains don’t kill jobs. Stagnant output does. From 1913 to 1979, American manufacturing employment grew steadily — even as productivity surged. Why? Because output kept up.
So what changed?
Output growth collapsed. And the trade deficit is the reason why.
Feeding the dragon
Since 1974 — and especially after 2001 — America’s domestic output growth slowed to a crawl, even as workers kept getting more productive. Why? Because we shipped thousands of factories overseas. Market distortions, foreign subsidies, and lopsided trade agreements made it profitable to offshore jobs to China and other developing nations.
The result: America now consumes far more than it produces. That gap shows up in our trade deficit.
In 2024, America ran a $918 billion net trade deficit — including services. That figure represents all the goods and services we bought but didn’t make. Someone else did — mostly China, Mexico, Canada, and the European Union.
The trade deficit is a dollar-for-dollar reflection of offshore production. Instead of building it here, we import it.
How many jobs does that deficit cost us? The U.S. Census Bureau estimates that every billion dollars of GDP supports 5,000 to 5,500 jobs. At $918 billion, the deficit displaces between 4.6 and five million jobs — mainly in manufacturing.
That’s no coincidence. That’s the hollowing-out of the American economy.
We can’t forget that factories aren’t just job sites — they’re economic anchors. Like mines and farms, manufacturing plants support entire ecosystems of businesses around them. Economists call this the multiplier effect.
And manufacturing has one of the highest multipliers in the economy. Each factory job supports between 1.8 and 2.9 other jobs, depending on the industry. That means when a factory closes or moves offshore, the impact doesn’t stop at the plant gates.
The jobs lost to offshoring aren't just the five million factory jobs that disappeared — the number is likely more than double that. The real toll could exceed 10 million jobs.
That number is no coincidence. It matches almost exactly the number of working-age Americans the Bureau of Labor Statistics has written out of the labor force since 2006 — a trend I document in detail in my book, “Reshore: How Tariffs Will Bring Our Jobs Home and Revive the American Dream.”
Bottom line: Dylan Matthews is wrong. Robots didn’t kill American manufacturing jobs. Elites did — with bad trade deals, blind ideology, and decades of surrender to global markets. It’s time to reverse course: not with nostalgia but with strategy, not with slogans but with tariffs.
Tariffs aren’t a silver bullet. But they’re a necessary start. They correct the market distortions created by predatory trade practices abroad and self-destructive ideology at home. They reward domestic investment. They restore the link between productivity, output, and employment.
In short, tariffs work.
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