Automation in the Transportation Manufacturing Industry: How the Emergence of High-Tech Manufacturing Plants Affects its Labor Market

This paper explores the relationship between highly automated manufacturing firms in the
transportation manufacturing industry and various labor market outcomes. Specifically, I perform a county and industry-level analysis where I evaluate the association between a “Million Dollar Plant” opening on local wages and employment outcomes across populations with different skill compositions. Using a difference in differences regression model with fixed effects, I find that the opening of a Million Dollar Plant slightly increases employment per capita in both counties with predominantly low-skilled populations and those with predominantly high-skilled populations. Further, I find no significant associations between plant openings and county-level SNAPS participation, poverty rates, the per capita wage bill, and income distributions. Taken within the context of existing research, these findings suggest that the more automated transportation manufacturing plants do not pose significant adverse effects to low-skilled labor populations.