The NewCo Daily: Today’s Top Stories
As we’ve been saying here since the election, neutrality is becoming nearly impossible for American businesses in Trump’s America. You are either with him or against him, and if you try to sit on the fence, circumstances will push you off.
Look at the L.L. Bean brouhaha (here’s Digg’s summary): The venerable outdoor-wear catalog merchant emphatically insists it’s apolitical. But Linda Bean, a scion of the family that owns it, is a major Trump donor and supporter. That landed the company on an anti-Trump boycott list. In response, Trump himself sent out a tweet Thursday urging people to “Buy L.L. Bean.” Free advertising! But with a catch.
I’m sure the managers of L.L. Bean wish the story would just go away, but it won’t. The more Trump fans rally to its defense, the more Trump opponents will shun it. In 2017 America, brands have dwindling freedom to maneuver on their preferred apolitical turf. Options for appealing to both sides of the red/blue divide are shrinking. That’s because people find it hard to just split the difference when it comes to the values that shape their identity. What will you do when @realDonaldTrump decides to fling a 140-character thunderbolt in your company’s direction?
Amazon Pledges 100,000 New Hires
Also since the election, U.S. businesses have been lining up to issue announcements and press releases about job-building efforts, like satrapies sending chariots loaded with tribute to the imperial capital. The latest came yesterday from Amazon, which said that it would add 100,000 fulltime jobs in the U.S. over the next 18 months to its current 180,000-strong workforce. (Walmart employs 1.5 million.)
Jobs are jobs, and a good thing for the economy. Amazon emphasized that these are full-time jobs with benefits, and many located away from its west coast headquarters, in new fulfillment centers (The Washington Post). But Business Insider looked at the numbers and still thinks the majority of hires will be in engineering and tech, where the company built its competitive advantage. Beyond that, Amazon’s hires need to be viewed not as a magical gift of growth but as a welcome yet limited corrective to a much broader trend: the collapse of retail employment in malls and downtowns thanks to the rise of online commerce (The New York Times).
Team Trump leapt to claim some credit for Amazon’s hiring spree. But short-term politics are much less likely responsible than the company’s long-term success with its core retail business, as well as its pioneering cloud computing service and its recent popularity in voice computing. Another thing to remember: A plan like Amazon’s assumes that Trump’s trade-war rhetoric will never get acted upon; if tariff walls go up, all bets are off.
U.S. Factories Haven’t Disappeared — They’ve Specialized
The overall long-term decline in total number of U.S. manufacturing jobs hides a much more complex and less discouraging story: The flourishing of smaller-scale, higher-skilled manufacturing operations like Micropulse, an Indiana-based producer of specialty medical devices (The Atlantic).
Yes, many jobs have fled to China and Mexico. But they turn out to be the lower-paying, less-skilled factory jobs. Worker for worker, American factory laborers are wildly more productive than they used to be, and average higher skill and education levels than ever before.
That means people who want that work need to be better prepared for it with degrees and training, and too many unemployed workers don’t seek those out. Our factory-job problem may be more of a mismatch between industry demand and labor supply.
Yes, China’s Exports Are Down
Bet you didn’t know that China’s trade volume is actually falling. In 2016, its exports fell by 7.7 percent, and its imports fell by 5.5 percent (Reuters). That followed a previous drop in 2015. Throughout the election campaign, president-elect Trump denounced a China that manipulated its currency to steal export share and jobs from other countries, including the U.S. But the world he railed against is long gone before he even takes office.
Trump promised he’d hang the “currency manipulator” classification on China the day he takes office, and impose tariffs on Chinese goods. Such moves could certainly put deeper dents in China’s economic performance — but declaring trade war on China would also incur a ton of collateral damage here in the U.S. as well, especially in tech. Before Trump pulls his China trigger, let’s hope he takes the time to update his picture of reality.