The conventional wisdom is that foreign imports have caused the demise of the American steel industry.
It’s not true, says Mark Perry at AEI’s Carpe Diem blog. The main reason for the loss of US steel jobs is a huge increase in worker productivity, not imports. And the jobs aren’t coming back. The graph below says it all
As Perry notes:
In the 1980s, American steelmakers needed 10.1 man-hours to produce a ton of steel; now they need 1.5 man-hours (see chart above), says Joe Innace of S&P Global Platts. Most American steel is now made at super-efficient mini mills, which use electric arc furnaces to turn scrap metal into steel. (Traditional integrated steel mills make steel from scratch, feeding iron ore and coking coal into blast furnaces.)
Some mini-mills need just 0.5 man-hours to produce a ton of steel, Innace says. Increased productivity means today’s steel mills don’t need as many workers. Steel industry employment peaked at 650,000 in 1953. By the start of this year, U.S. steelmakers employed just 143,000.
The Trump Administration’s decision to impose tariffs on steel imports is bad policy that only seeks to bring back jobs that are long gone. Tariffs won’t help the economy or steel workers.
That’s difficult to do when you deny economic reality.