The big news in London, Ontario, is the lockout of 400 workers at the Caterpillar-owned Electro Motive plant. Economist/professor/pundit Mike Moffatt takes a stab at figuring out where all the manufacturing jobs have gone (hint: you can’t blame NAFTA):
American and Canadian manufacturers are simply producing more with less. The average American and Canadian manufacturing worker produces 40 per cent more than he or she did a decade ago. Some of this is through higher levels of skills and education, but much of it comes from new technology and new investment in equipment and machinery. When we account for falling technology prices, there has been a massive increase in spending on equipment and machinery since the mid 1990s, with real (inflation adjusted) spending doubling in the last 15 years.
His analysis is pretty spot on. This observation doesn’t help those who have lost jobs or seen their income slashed, but if we don’t figure out exactly what is going on in the economy, there’s no way we’ll be able to effectively help those who are in need.