So how many Chinese business people have used their increased income from manufacturing for the US market to buy apartments on Trump's properties or stay in his hotels?
Just like foreign workers don't likely care if they took a North American job, North Americans aren't generally ready to sacrifice their jobs for the benefit of foreigners, regardless of how poor they may be. There are human beings behind all those numbers economists crunch.
1
This article is disingenuous because its doesn't discuss alternative ways of reducing worldwide poverty or the all the beneficiaries of globalization.
First the US has many public programs to help third world countries develop their economies. Many of those programs, like the Peace Corp, focus on transferring skills and technology to help countries develop local industries for local needs. That includes development of agricultural productivity, appropriate technology, and sustainable products that use domestic resources. All those programs create wealth the old fashioned way, people developing local resources. Instead this article describes a zero sum type of assistance that is actually based on profits seeking by American corporations. In short, the ideology of this globalization solution to poverty is a market based program where "the market" is US consumer demand.
Second, because this is a US market based solution to foreign poverty, the beneficiaries HAVE to include the corporations that shift the jobs, because it is they that must make the "business decisions" based on self interest. So just how much benefit do the corporations get in comparison with the benefits gained by the foreign workers and domestic consumers? The article is completely silent on that. But I'll speculate that the rise in US inequality has paralled globalization and that's not a coincidence.
First the US has many public programs to help third world countries develop their economies. Many of those programs, like the Peace Corp, focus on transferring skills and technology to help countries develop local industries for local needs. That includes development of agricultural productivity, appropriate technology, and sustainable products that use domestic resources. All those programs create wealth the old fashioned way, people developing local resources. Instead this article describes a zero sum type of assistance that is actually based on profits seeking by American corporations. In short, the ideology of this globalization solution to poverty is a market based program where "the market" is US consumer demand.
Second, because this is a US market based solution to foreign poverty, the beneficiaries HAVE to include the corporations that shift the jobs, because it is they that must make the "business decisions" based on self interest. So just how much benefit do the corporations get in comparison with the benefits gained by the foreign workers and domestic consumers? The article is completely silent on that. But I'll speculate that the rise in US inequality has paralled globalization and that's not a coincidence.
6
One thing you failed to mention; all of these new jobs in these countries have an immense stabilizing effect on these countries. Were China's population still enmeshed in rampant poverty, the far east might be far less stable than it has been over the last 30 years. Isnt so much of the instability in the Middle East been in countries where there has been so little economic progress and has too many unemployed young people? What has that cost the United States over the last 20 years?
3
This is a thought provoking article. American manufacturing jobs with good benefits and good pay have disappeared. Regardless of the reason, foreign trade or automation or both, and regardless of the benefits, reduction of dire poverty in the third world and increased availability of cheaper imported goods for sale here in the US, there will be a political price to pay. Regardless of how much the poor and those who have lost jobs in manufacturing in our country benefit from cheaper imported goods there are many others in this country with good jobs who benefit even more not only from cheaper prices but also from inflated assets values. The sad truth is that with capitalism this dynamic would happen even if there were no benefits at all in terms of the reduction of abject poverty in the third world. Although not really discussed, the politics in our nation right now mostly revolves around the issue of how much and what exactly we do to compensate our own economic losers. It is a mistake to think that the two political parties agree that we should even do this. I am amazed that anyone would think that Mr Trump has the real interests of the economic losers in our country when I have read no indication of this in any of his business dealings or history. Unfortunately, Hillary Clinton, regardless of how much I support her, has the same problem. This will be the political and economic issue of our time.
2
Can someone please write a summary for this article for it to be easier to comprehend ☺
Even those in high knowledge positions have been replaced by less expensive labor from India. President Obama promised India H1B1 visas would continue. Doesn't this make you wonder?
5
Mr. Popper apparently can find no positive impact of 'free' trade to the US! Only jobs lost. How about the sharp improvement in the quality of life of tens of millions of Americans due to lower cost electronics, consumer goods and clothing. Buying those items is taken for granted by the middle class! For others less fortunate though, they are now more affordable! Students can buy laptops or tablets for a few hundred dollars compared with thousands 10-15 years ago! Work clothes and baby items are much cheaper as well! When you have a lot of money you don't think about prices but millions of us have greatly benefited from goods imported to the US!
2
Establishing the real vs. theoretical benefits of international trade has always been difficult. The basic version taught, with the aid of Cartesian graphs, is that a relatively small area represents lost jobs to a few while a bigger area on the graph represents the benefit of lower prices to many.
But it is a fallacy to imagine that the pain of job loss can be captured as easily as the benefit of lower prices on imports. In the latter case it is easy: multiply the amount of lowered price (y axis) by the number of units (x axis) and the product is conveniently presented in dollar terms. But the former, the area of lost revenue to domestic producers, is not simply the calculation of dollars lost. It is the loss of life's purpose, social structure, family cohesion and ultimately the depopulation of towns and areas.
It may be true that the obverse of this terrible scenario of loss in America are the happy days in Vietnam or China. The author encourages us to put all these positive externalities in the moral balance. But he fails to give a full account of the negative externalities that leave shattered lives, addiction, and desolated communities here, in America. That loss surely outweighs cheaper dish cloths.
But it is a fallacy to imagine that the pain of job loss can be captured as easily as the benefit of lower prices on imports. In the latter case it is easy: multiply the amount of lowered price (y axis) by the number of units (x axis) and the product is conveniently presented in dollar terms. But the former, the area of lost revenue to domestic producers, is not simply the calculation of dollars lost. It is the loss of life's purpose, social structure, family cohesion and ultimately the depopulation of towns and areas.
It may be true that the obverse of this terrible scenario of loss in America are the happy days in Vietnam or China. The author encourages us to put all these positive externalities in the moral balance. But he fails to give a full account of the negative externalities that leave shattered lives, addiction, and desolated communities here, in America. That loss surely outweighs cheaper dish cloths.
12
can some one give me a good summary for this article please
Trade involves trade offs. Some good, some not so good. Trade deals benefit poorer countries most of the time, but not always.
4
When globalizing our economy,there was no one in power asking should we do this? The only constant was the rush to crush unions in this country and destroy good paying jobs, benefits and retirements. It's not just manufacturing either. As pay for CEOs skyrockets political bribery in the name of 'campaign financing' continues the America economy, that is good at creating financial time bombs, will limp along until we bleed out through current account payments. Then we can beg for companies to come back. And they will, as long as we don't tax them.
10
Americans are the world's engine of consumption partly because, unlike other countries both developed and less developed, we consume to the detriment of saving, public spending, healthcare, etc. The Chinese produce for our markets while saving and investing their money rather than consuming what they make or what we make. It's mercantilism. They grow richer at our expense.
9
This article is written as if jobs just "went" to China, to Vietnam - and those countries export to us.
Are 'Nike', 'Apple', 'Forever 21' Asian companies, then?
The decision was made by US companies to kill US jobs.
And just like it had "an enormous ripple effect: Every new factory position led to several other new jobs nearby. " in Vietnam - in the US that ripple happened in reverse: the small drug store, the corner deli, the lunch place near the defunct factory.
I agree that jobs have been created in Asia, but cannot share the romanticized view of the author. In Cambodia families work for fashion brands at 80c/hr - 60 hours a week to barely feed their families - and destroy their social fabric as parents have no time with their children. Compare that with the pay of the above CEOs. A comment here detailed it for Nike.
The winners of this game are corporations - and to distract from their excesses at our expense, they point the finger at the 'foreigners', who are just as victimized as blue-collar workers here.
It is called 'divide and conquer'.
Are 'Nike', 'Apple', 'Forever 21' Asian companies, then?
The decision was made by US companies to kill US jobs.
And just like it had "an enormous ripple effect: Every new factory position led to several other new jobs nearby. " in Vietnam - in the US that ripple happened in reverse: the small drug store, the corner deli, the lunch place near the defunct factory.
I agree that jobs have been created in Asia, but cannot share the romanticized view of the author. In Cambodia families work for fashion brands at 80c/hr - 60 hours a week to barely feed their families - and destroy their social fabric as parents have no time with their children. Compare that with the pay of the above CEOs. A comment here detailed it for Nike.
The winners of this game are corporations - and to distract from their excesses at our expense, they point the finger at the 'foreigners', who are just as victimized as blue-collar workers here.
It is called 'divide and conquer'.
14
Correction: Bernie Sanders did not "bow out"...he was forced out by the DNC/Clinton org.
RE loss of US Manufacturing Jobs: Perhaps if these emerging economy countries developed anything innovative w/ commercial appeal they would not have to pirate American ideas and production jobs. I have always produced my products here in the USA....I think it is the most efficient way to operate and Made in the USA means quality in the global market,
RE loss of US Manufacturing Jobs: Perhaps if these emerging economy countries developed anything innovative w/ commercial appeal they would not have to pirate American ideas and production jobs. I have always produced my products here in the USA....I think it is the most efficient way to operate and Made in the USA means quality in the global market,
7
@Sandra Garratt in CA - Mr. Sanders lost on the votes, as well. The bias of some on the DNC was there, but about 3 million more voters cast their ballots for Hillary - and, no, we were not brainwashed by the DNC.
1
There has been a serous study of the impact of trade agreements on consumer prices. It found that the median (about $50,000) family got 6% lower prices due to trade. This is due to low tariffs, not to things like coffee that we would import anyway. While the study was for just after 2000, it is likely to apply now and would suggest that the typical US family "wins" about $3000. If this is worth the jobs lost is a political question, but most serious work suggests that about 80% of US manufacturing job loss is due to automation (think of robots on the assembly lines) and not due to trade. With manufacturing jobs now down to 8-9% of all employment, the majority of people benefit from trade agreements but a small group bears the brunt of the downside. This comment does not mean the TPP agreements on drugs or international arbitration are desirable.
4
'... but most serious work suggests that about 80% of US manufacturing job loss is due to automation (think of robots on the assembly lines) and not due to trade...'
Most serious work, really? Unless you can provide a citation for your otherwise specious comment, I suggest you have been over-indulging om oranges and beans.
Most serious work, really? Unless you can provide a citation for your otherwise specious comment, I suggest you have been over-indulging om oranges and beans.
6
I can accept $3000 as the average household benefit of lower tariffs. Frankly, it seems small. Without knowing the methodology we can't say how much of that Average goes to each quintile of Americans. A really complete study would have to assess how much goes to those Americans who firms are benefitted by contract labor (think of Apple employees and shareholders). If we had such a study that identified all the winners and losers in economic terms we would be able to understand whether, and by how much, free trade contributes to income inequality.
But even that analysis misses the larger damage done by the loss of specific industries and the closing of specific facilities. None of the social degradation of cities and towns is captured. Classical Ricardian economics just assumes that workers will migrate to new jobs. For a 24 year old graduate that is simpler than for a family with school, friends, volunteer organizations, community sports and all the rest of the social fabric which people value. These are not the frontier days, Americans are now much more like their settled counterparts in Europe, indeed in the world. Human geography tells us that Place Matters, more than $3000.
But even that analysis misses the larger damage done by the loss of specific industries and the closing of specific facilities. None of the social degradation of cities and towns is captured. Classical Ricardian economics just assumes that workers will migrate to new jobs. For a 24 year old graduate that is simpler than for a family with school, friends, volunteer organizations, community sports and all the rest of the social fabric which people value. These are not the frontier days, Americans are now much more like their settled counterparts in Europe, indeed in the world. Human geography tells us that Place Matters, more than $3000.
2
Burden of this piece is that while you cannot own an economist, they are widely available for hire to the highest or most prestigious bidder.
11
A hand full of people have made a killing. More jobs any where else but America. Millions lifted out of poverty at the expense of American workers. Carly said it best: There are no jobs we can't out source. So all us uneducated Americans need to get college degrees because all the Chinese have them. Right? Go Trump!
5
Thing is: The only way we Americans can bring jobs back is to change the corporate tax structure to make it cost effective for businesses like Apple to manufacture their iPhones here on US soil. To make that happen we need to elect like-minded, and ethical legislators to pass such reformed tax laws, and remove 'favored nation status' from countries like China, which treat US patents and trademarks with utter contempt.
4
The argument that the rise of happiness in China and Vietnam carries more moral weight than the unhappiness of American workers was first advanced by Paul Krugman in 1997, who accused opponents of globalization of suffering from "moral outrage"
http://www.slate.com/articles/business/the_dismal_science/1997/03/in_pra...
Paul Krugman maintained wrongly, for decades that trade with low wage countries had only a minimal impact on American jobs and wages. He probably did more damage to American manufacturing than any other economist
The problem of the global argument is that the responsibility of American politicians is to take care of Americans first.
That is for what voters elect them to do.
http://www.slate.com/articles/business/the_dismal_science/1997/03/in_pra...
Paul Krugman maintained wrongly, for decades that trade with low wage countries had only a minimal impact on American jobs and wages. He probably did more damage to American manufacturing than any other economist
The problem of the global argument is that the responsibility of American politicians is to take care of Americans first.
That is for what voters elect them to do.
15
By taking care of Americans, you probably mean by bringing our infrastructure into this new century. Imagine all the job creation that would occur.
Although we wouldn't want to tax the people with all the money for the good of the country, because after all they need more ,more, more!
Although we wouldn't want to tax the people with all the money for the good of the country, because after all they need more ,more, more!
6
“The fact that there are adverse consequences in the United States should be taken seriously, but it doesn’t tilt the balance.”
Thus speaks a member of the entitled classes, who care only about the citizens of Third World countries or immigrants or refugees, and nothing about the American people.
Thus speaks a member of the entitled classes, who care only about the citizens of Third World countries or immigrants or refugees, and nothing about the American people.
17
A narrow view of Americans best interest results in looking only on impacts to US jobs. A wider view of our best interest should consider our jobs and our cost of living and our health and our general prosperity.
Since the founding of our country our general prosperity has been served by minimizing trade restrictions and such remains the case.
The fact is that automation is responsible for most job losses that have occurred in last 30 years.
Since the founding of our country our general prosperity has been served by minimizing trade restrictions and such remains the case.
The fact is that automation is responsible for most job losses that have occurred in last 30 years.
NOTHING. You can be sure that American business benefits to the detriment of the American public, regardless of any "creative" protestations to the contrary.
7
Globalization has generally worked for only two groups of constituency, chiefly, big multinational corporations who can move operations from one country to another just to shave off more labor costs and/or cheaper resources, and high-value knowledge workers who are global citizens.
Governments lose out when they lost revenue from income tax (due to job cuts), property tax (operations gone elsewhere), and increased welfare payout (unemployed citizenry who has to increasingly resort to claiming disability coverage in order to get by), all of which can decimate communities with job loss, plunging property value, and disappearing public funding.
Local workers who can't or won't relocate to chase for jobs lose out too since they are tied up to the declining fortune of their town and community, with no job prospect and inability to move (due to finances and/or inertia).
In a way, this is not new. Even before the advent of globalization and the rise of China as the world's manufacturing sweatshop, there has always been the rise and falls of towns whose identity are tied its economic fortune. Case in point, steel, textile, coal, small scale fishing, and of course, manufacturing.
In the ever presence of news cycle and social media, everyone now knows where their disappearing factories or jobs have gone to (which is invariably low-cost countries like Mexico in the NAFTA days, and China since the mid 1990s). These days we can pinpoint exactly who to blame, thus the Trump rise.
Governments lose out when they lost revenue from income tax (due to job cuts), property tax (operations gone elsewhere), and increased welfare payout (unemployed citizenry who has to increasingly resort to claiming disability coverage in order to get by), all of which can decimate communities with job loss, plunging property value, and disappearing public funding.
Local workers who can't or won't relocate to chase for jobs lose out too since they are tied up to the declining fortune of their town and community, with no job prospect and inability to move (due to finances and/or inertia).
In a way, this is not new. Even before the advent of globalization and the rise of China as the world's manufacturing sweatshop, there has always been the rise and falls of towns whose identity are tied its economic fortune. Case in point, steel, textile, coal, small scale fishing, and of course, manufacturing.
In the ever presence of news cycle and social media, everyone now knows where their disappearing factories or jobs have gone to (which is invariably low-cost countries like Mexico in the NAFTA days, and China since the mid 1990s). These days we can pinpoint exactly who to blame, thus the Trump rise.
14
Excellent comment, Tiddle.
5
The 2015 Millennium Goals report from the United Nations says that 1 billion people have been lifted out of dire poverty by globalization. An earlier report by the World Trade Organization says the pretty much the same thing. Bernie knew better than to trust institutions. His gut told him the truth. Believing that 'globalization is evil' has that satisfying ring of 'truthiness'. Facts be damned!
1
When it comes to being able to feed your family, or pay your mortgage or rent, or pay for medical care... you come first, and thoughts of less advantageous folks in Asia are a distant second. And we will continue to buy from Wallmart, if it fits our budget.
Which doesn't address the real reason for loss of US jobs. The US has the highest corporate tax rate on the globe, among industrial nations. Among OECD members, corporate tax rates have been declining for the past 15 years, but not in the US.
As a result, corporations have chased tax havens, and sequestered foreign earnings, rather than repatriating them.
When will Congress begin to understand that investment capital is mobile, but national borders are fixed? As a result, countries are in competition for investment and jobs.
Fix the tax rate problem....and you fix the unemployment problem.
Which doesn't address the real reason for loss of US jobs. The US has the highest corporate tax rate on the globe, among industrial nations. Among OECD members, corporate tax rates have been declining for the past 15 years, but not in the US.
As a result, corporations have chased tax havens, and sequestered foreign earnings, rather than repatriating them.
When will Congress begin to understand that investment capital is mobile, but national borders are fixed? As a result, countries are in competition for investment and jobs.
Fix the tax rate problem....and you fix the unemployment problem.
3
Practically no company pays the full rate. The real rate is much lower.
5
Anyone who was reared in a former manufacturing city in the US needs no academic studies to understand the impact of the global economy. i spent my childhood in such a city. The two major electronics goods factories, four textile mills, and two shoe factories that once were the job sources that supported the local economy are now gone, their former products now made in Asia. The population is about half of what it was back then. There are many abandoned houses, stripped by the criminal element of their copper plumbing. Crime and drug use, virtually unknown back then, are now rampant. What more does one need to know?
13
If you go back a little further in time, the area that Mr. Surr refers to would probably have been largely agricultural, as in 1900 about 40% of the U.S. labor force worked on farms. By 2000, that had fallen to under 2%. That meant tremendous job loss, which drove massive rural-urban migration, including interregional migration from south to north and from the plains to California. Something like it has also been happening over the past fifty years in coal-mining areas as a result of mechanization, and over the past ten years due to natural gas. Readers can probably point out other examples.
1
So now the economic winners can take all and pat themselves on the back for being the champions of the poor in the Far East. The conclusions seem more than a little self serving. The unemployed can start wearing buttons that read, " I gave my quality of life so that others might improve theirs"
28
You have Wall St (particularly since the 1980s) to thank for, in rewarding CEOs disproportionately for cutting jobs. Every round of job cuts would bring more bonus to CEOs and their accolade of senior execs, and even bigger bonus for all those fund managers and traders who egg this trend on.
11
The false equivalencies posited by this reporter Popper of a Chinese worker who is saved from being 'destitute' in return for an American Worker laid off because his or her OSHA secured job related safety and health, salary, vacation, sick, and family leave have made him or her noncompetitive bespeaks of ideation that is the product of a mind, academically diminished and impaired.
21
Another question we should be asking is what happened here, in the U.S., to the 2.4 million people who encumbered the American manufacturing jobs? Did they all end up unemployed? Some, perhaps, but probably not all. Where did they go? The American economy has changed in the past ten years, and will continue to change in response to the effects of global trade and many other factors. Many argue that manufacturing is making a come-back, but from the looks of many vibrant areas in American cities, American entrepreneurs are on the rise, creating jobs and wealth. Popper examines "the other side of the ledger," focusing on whether our 2.4 million loss equaled other countries' gains. But what about gains in other sectors of the U.S. economy? Growth has varied over the past decade, but it hasn't been net zero.
1
If you take a simple driving tour around the Great Lakes on smaller roads you will see the despair, desolation and depopulation.
2
The article is inclined more towards textile and similar items. In this context, it fails to even mention about Bangladesh, where many Indian (and also some Chinese) opened units to be able to export textiles easily – as there were no restrictions. Moreover, as if it was not enough, US showed more largess after 1971 to invite a very large number of people from Bangladesh (some Bangladeshis in India too) to settle in the east coast and elsewhere. Of course, this is more than “export related largess” or humanitarian efforts by the Americans that seem to have been forgotten at present.
On the Chinese front, some examples will show that China literally invaded the West in a latent and well-planned manner in steel, engineered products and semi-finished commodity items – not only by forming some kind of alliance with EU countries (e.g. Italy) and US companies, but also spent a lot of money on acquisition of very important companies in EU and also in the US, such as Lenovo (tech), Springfield (food), etc. It is for Labour Department to see how many jobs were created or lost in these companies in the US during the last 10 or 15 years.
I wish that the US showed such export related humanitarian efforts to a larger extent to some Caribbean and South American countries, where the poverty level is quite high. Moreover, the American largess showered on Vietnam and China should not definitely be seen under the same lens…
On the Chinese front, some examples will show that China literally invaded the West in a latent and well-planned manner in steel, engineered products and semi-finished commodity items – not only by forming some kind of alliance with EU countries (e.g. Italy) and US companies, but also spent a lot of money on acquisition of very important companies in EU and also in the US, such as Lenovo (tech), Springfield (food), etc. It is for Labour Department to see how many jobs were created or lost in these companies in the US during the last 10 or 15 years.
I wish that the US showed such export related humanitarian efforts to a larger extent to some Caribbean and South American countries, where the poverty level is quite high. Moreover, the American largess showered on Vietnam and China should not definitely be seen under the same lens…
2
Working for a major US multinational, as so called Globalization began maturing, I have concluded, we are conditioned to accept the virtues of Trade by elected officials, and always confirmed by the Fed. The agreements are drafted and initially set forth rules regulations, and so called safe guards. In reality, once corporate America has the ground work of so called laws, they go to work seeking benefits. Our corporation had some 90 factories in North America, closing those that produced products the were marginally profitable, turned to closing these factories and renting labor in Asia. But more importantly reducing benefit cost. Thousands were let go and their semi skilled on the job skills were not adaptable, to new employment. Next of course incorporation off shore became common, and we followed suit, ending up in Ireland after initially Bermuda. Point is, again trade agreements by governments is one thing, how they mature is yet another. Now as we are a large welfare state, we must continue to import affordable goods so people can consume. Of course lower US wages produce reduced US income taxes, if in fact many still pay US income tax.
3
Trade does not involve a trade-off between jobs in wealthy nations and jobs in poor nations. Trade increases wealth everywhere and certainly has not reduced jobs in the US. Those 2.4 million jobs lost were outweighed by even more jobs created in the rest of the economy as a result of the higher spending that comes from cheaper imports. This is seen from the fact that the US unemployment rate is lower since China and India surged, despite the fact that the US population is higher. Trade rearranges jobs, so that higher paying, more viable jobs replace non-viable ones. The issue then is how to take that expanded wealth and help those who need it.
2
Trade, in and of itself, is not necessarily a bad thing. But the underlying assumption is that, there is always a price disparity between the producing countries to the consuming countries.
When multinational corps are able to move operations freely to exploit this disparty, when even SME can access manufacturers in low(er)-cost countries to produce what they need, naturally everyone would go for the buy(make)-low-sell-high mantra in (stock)trading. I know I would, if I were them.
It should have been government's duty to ensure a balanced approach in achieving clout on world political stage (by using economic carrot in the form of trade) while protecting local citizens' interests. I fault Bill Clinton's administration for total failure in this fiduciary duty to the US citizens during the push for NAFTA, and TPP is only going to get worse since Obama (and the next administration) needs TPP to buy waning allegiance from Asian countries to counter the rise of China.
When multinational corps are able to move operations freely to exploit this disparty, when even SME can access manufacturers in low(er)-cost countries to produce what they need, naturally everyone would go for the buy(make)-low-sell-high mantra in (stock)trading. I know I would, if I were them.
It should have been government's duty to ensure a balanced approach in achieving clout on world political stage (by using economic carrot in the form of trade) while protecting local citizens' interests. I fault Bill Clinton's administration for total failure in this fiduciary duty to the US citizens during the push for NAFTA, and TPP is only going to get worse since Obama (and the next administration) needs TPP to buy waning allegiance from Asian countries to counter the rise of China.
8
As an American someone who spends a lot of time in Southeast Asia, I agree with this author that our moral calculus on trade has to include the impact on the rest of the world. I also believe that automation is inevitable and there is no turning back.
However, I think we can do a better job as a nation making our shift away from a manufacturing society less painful. We need to offer free public state university education to anyone who wants to enroll. We also need to offer high-quality jobs fixing bridges and other public infrastructure to anyone who is able and willing to work.
However, I think we can do a better job as a nation making our shift away from a manufacturing society less painful. We need to offer free public state university education to anyone who wants to enroll. We also need to offer high-quality jobs fixing bridges and other public infrastructure to anyone who is able and willing to work.
2
Free higher ed is not the panacea to all ills, as you make it out to be. Look at all the unemployed and under-employed Starbucks baristas now and you should have known better.
In the olden days when there are more jobs than applicants, a college diploma is going to get your foot in the door. These days, you can a-dime-a-dozen college grads (even in the highly sought after STEM fields) in countries like India and China, where those hungry college grads are ready and willing to take any jobs for less than half the salary of a US fresh grads, of course employers are going to move to those countries where they can more easily hire-and-fire, paying less in both salary and benefits.
In face of that abundance of labor supply, a mere college diploma in US isn't going to do you much good. Let's be real on that.
In the olden days when there are more jobs than applicants, a college diploma is going to get your foot in the door. These days, you can a-dime-a-dozen college grads (even in the highly sought after STEM fields) in countries like India and China, where those hungry college grads are ready and willing to take any jobs for less than half the salary of a US fresh grads, of course employers are going to move to those countries where they can more easily hire-and-fire, paying less in both salary and benefits.
In face of that abundance of labor supply, a mere college diploma in US isn't going to do you much good. Let's be real on that.
10
I can remember many decades ago my father, a textile mill manager in New England, forecasting a dim future for our local economy. He was referring to the global economy that he foresaw. He told me that either we must pull the poorer nations' standard of living up to ours, or they would pull his down to theirs. He was right. They are pulling us down to theirs.
10
Donald:
Did I miss something? That is exactly the opposite conclusion than the one suggested by this article.
It's a mistake to generalize from the fate of one industry to the whole economy.
Did I miss something? That is exactly the opposite conclusion than the one suggested by this article.
It's a mistake to generalize from the fate of one industry to the whole economy.
Either way, globalization is the great equalizer in terms of economic fortune, standard of living, employment opportunity, salary level, and more, for all countries, as evident in the comparatively more abundant job opportunities in China (that mirrors the disappearance of which in US and Europe), their rising standard of living and salary level. This is happening all while US and Europe is "staying put" in terms of economic cycles and stagnating salary levels (that for most folks have not risen for more than 15 years now).
Your father was right about the dim view of the future, but it's been our own making. I know it's a rather colonialist view, one man's gain is oftentimes another man's pain. It's true even in a globalized world, only that this time, we are doing the suffering.
Your father was right about the dim view of the future, but it's been our own making. I know it's a rather colonialist view, one man's gain is oftentimes another man's pain. It's true even in a globalized world, only that this time, we are doing the suffering.
1
to economists : remember henry ford, who paid his workers well so that they could buy his cars.
For all of the wonders discussed about global trade, killing good jobs in the developed countries led to the destruction of the middle class and the dearth of demand. Without demand the economy cannot grow and a vicious cycle of ever reducing demand leads to smaller economies.
The supposed 70 million jobs created in China cannot produce the demand of the 1 million jobs lost in the US.
The time will come when even the low paying service jobs will dry up because people cannot afford that helping of fries.
For all of the wonders discussed about global trade, killing good jobs in the developed countries led to the destruction of the middle class and the dearth of demand. Without demand the economy cannot grow and a vicious cycle of ever reducing demand leads to smaller economies.
The supposed 70 million jobs created in China cannot produce the demand of the 1 million jobs lost in the US.
The time will come when even the low paying service jobs will dry up because people cannot afford that helping of fries.
13
Well, that's all true. The markets of the local economic are all that matters. But multinational corps turn that Henry Ford logic on its head by completely moving the operations to where the markets they want to be, and in these days, it's increasingly China. It's the middle class in China that they're after now, not the fast disappearing middle class in US, sadly to say.
8
My balance of trade with the neighborhood grocery store is catastrophic, especially since they expanded their cheese and prepared-food sections Think of all the agricultural, dairy, and livestock jobs I could be doing! My ancestors were subsistence farmers, but now it all goes for the store's profits. I should let the store know that I'm going to cut back purchases to no more than what they buy from me -- it's only fair.
This is all because someone let them sell me stuff. If I find that guy, I'm going to really give him a piece of my mind. The people behind the store may even be foreigners! I mean, not foreigners like the countries where our family members come from, but, you know, the bad ones. There oughta be a law.
This is all because someone let them sell me stuff. If I find that guy, I'm going to really give him a piece of my mind. The people behind the store may even be foreigners! I mean, not foreigners like the countries where our family members come from, but, you know, the bad ones. There oughta be a law.
4
Trade is not the long range problem, automation is. When manufacturing returns to the U.S. - and make no mistake, there are plenty of examples of this - the new manufacturing facilities typically hire few workers because they are substantially automated. Operating these facilities also requires workers with specialized skills that most American manufacturing workers do not have.
Lower level white collar jobs are being eliminated and automated as well. For example, Wal-Mart just announced it would ax 7,500 'back office' employees who handle basic accounting and inventory functions that can be performed less expensively, and probably more reliably, by hardware and software.
Finally, imports remain a small percentage of our GDP, and about 50% of the value of imports is actually 'domestic content,' i.e., shipping, sales, storage and other services associated with importing and bringing the goods to retail.
Unfortunately, there may be no turning back to the days when we will have millions of assembly line jobs paying hefty union wages with generous benefit packages... not because the jobs have fled to India or China, but because the work will require fewer and fewer workers. As wages in these other regions climb, the race to automate will gather even more steam.
It's easy for politicians to beat their chests and offer simple minded answers like 'I'll bring jobs home' and 'I'll make better deals so we'll win and China will lose.' Would that it were so simple. It ain't.
Lower level white collar jobs are being eliminated and automated as well. For example, Wal-Mart just announced it would ax 7,500 'back office' employees who handle basic accounting and inventory functions that can be performed less expensively, and probably more reliably, by hardware and software.
Finally, imports remain a small percentage of our GDP, and about 50% of the value of imports is actually 'domestic content,' i.e., shipping, sales, storage and other services associated with importing and bringing the goods to retail.
Unfortunately, there may be no turning back to the days when we will have millions of assembly line jobs paying hefty union wages with generous benefit packages... not because the jobs have fled to India or China, but because the work will require fewer and fewer workers. As wages in these other regions climb, the race to automate will gather even more steam.
It's easy for politicians to beat their chests and offer simple minded answers like 'I'll bring jobs home' and 'I'll make better deals so we'll win and China will lose.' Would that it were so simple. It ain't.
18
@chambolle...the points you so eloquently make here are the same ones made by Martin Ford in his brilliant book, RISE OF THE ROBOTS. A sobering look at the future of work. (link) https://www.amazon.com/Rise-Robots-Technology-Jobless-Hardcover/dp/B014G...
To be honest, is automation really all bad? And in a country where there is declining and aging population (like Japan or Germany), you definitely need automation and technology to keep up the edge.
Looking at it from another perspective, if man cannot compete with machines, would that make man obsolete one day, trade or no trade? When you look around and see some countries with exploding population, yet doing nothing much but consuming resources and waiting to bring their wrath on someone else for their own frustration, that's what we should be worried about. This planet, in short, has way too many non-productive people than it can support.
Looking at it from another perspective, if man cannot compete with machines, would that make man obsolete one day, trade or no trade? When you look around and see some countries with exploding population, yet doing nothing much but consuming resources and waiting to bring their wrath on someone else for their own frustration, that's what we should be worried about. This planet, in short, has way too many non-productive people than it can support.
2
Chambolle: I suggest you make a trip out of your ivory castle in Bainbridge and head south to Long Beach and watch one days operation on the container docks and tell me that imports are nothing!
The phony moralizing here is sickening. The author is right that millions of the world's poorest people have benefited from globalized trade. However, he goes right off the rails when he implicitly admonishes the American working class, with their comfortable "food-stamp poverty," for resenting what amounts to a huge transfer of their wealth to the Third World. Left unasked is the 2.4 million job question: why should the working and middle classes be the ones to give up their wages, their living standards, and their hopes for the future in order to help the world's poor?
40
No, they shouldn't, but their government (from Bill Clinton, to W, to Obama now) made that decision for them, in the form of trade deals that essentially uses these people's livelihood as carrot to buy clout on the world political stage. NAFTA is the infamous one, and TPP is no better. Is there any wonder why these working class folks flock to Trump and Sanders, even if they made no sense at times?
4
This is excellent work demonstrating the good of global market functioning as it should, whether Vietnam, China or wherever.
It's hard to do good economics in a political theater. A lot of the magic in science is in the assumptions made. I am not buying the assumption that those jobs were not already 'history' with or without any one individual nation. But then I am not running for elected office either.
It's hard to do good economics in a political theater. A lot of the magic in science is in the assumptions made. I am not buying the assumption that those jobs were not already 'history' with or without any one individual nation. But then I am not running for elected office either.
1
How do I say this without sounding like Karl Marx? The alliance between America’s capitalists and wage-earners is breaking up.
We needed each other. Capitalists need workers to produce real goods or services. Until now just about everything that American capitalists invested in had to be produced by American workers. So labor supply and demand let those workers share in the fruits of productivity.
Recently however, China and India became viable labor markets, depressing our wages even as productivity rises. They are not to blame, nor are you.
What about the greedy capitalists? Well the markets for their products are as unforgiving as your labor markets. If their companies fail to optimize labor costs, price competition will grind them to dust. It is the wheel of history that threatens to align American incomes with those of poor countries.
Our economists, cosseted in tenured security, love to remind us that “our economy” benefits from free trade - as if wage-earners and capitalists still ascend together on the rising tide. But these dominant forces promise an America of richer capitalists and poorer wage-earners - two economic classes with conflicting political interests.
Falling wages will provoke American wage-earners to seek to “share the wealth,” inevitably causing an angry realignment of our political parties. Though it’s rude and unfashionable to speak of it, this tidal wave will engulf a voting booth near you - sooner than you think.
We needed each other. Capitalists need workers to produce real goods or services. Until now just about everything that American capitalists invested in had to be produced by American workers. So labor supply and demand let those workers share in the fruits of productivity.
Recently however, China and India became viable labor markets, depressing our wages even as productivity rises. They are not to blame, nor are you.
What about the greedy capitalists? Well the markets for their products are as unforgiving as your labor markets. If their companies fail to optimize labor costs, price competition will grind them to dust. It is the wheel of history that threatens to align American incomes with those of poor countries.
Our economists, cosseted in tenured security, love to remind us that “our economy” benefits from free trade - as if wage-earners and capitalists still ascend together on the rising tide. But these dominant forces promise an America of richer capitalists and poorer wage-earners - two economic classes with conflicting political interests.
Falling wages will provoke American wage-earners to seek to “share the wealth,” inevitably causing an angry realignment of our political parties. Though it’s rude and unfashionable to speak of it, this tidal wave will engulf a voting booth near you - sooner than you think.
33
Well said.
3
I am in no way opposed to wages rising for workers around the world—everyone deserves to have the opportunity to move beyond abject poverty. And I understand that in a "free trade" system, there will be losers in higher income countries, as jobs move off-shore (of course there are other factors such as automation). Yes, we can now buy cheaper imported goods, but if we lost our job in the process—or if most of us find real wages stagnant or declining—that’s not really a bargain.
But what really irks me is the amount of money in this system, and it never gets passed on to the worker—in this case, in Vietnam. While an average worker there may make 60 cents an hour ($150 / month, 25 days, 10 hours per day) (Dr. Sheng Lu, U of DE)—or around 75% of the living wage in Vietnam (industiALL)—the CEO of Nike will be "earning" $10,000 an hour ($20 million / year, 240 days work, 8 hour day) (Citizen-Times). And the company made nearly $4 billion in profit last year (Marketwatch). So shareholders—who have no skin in this, save their money—made out well too by voting with their investments to send jobs off-shore. Obviously, the company could have kept all its manufacturing right here in the USA—or paid its overseas workers more—and still remained afloat. After all, the manufacturing cost of a pair of Air Jordans is $16—and they retail for over $200 (Wall Street Journal).
One can call this a global redistribution of income—sort of—or call it by its other name: corporate greed.
But what really irks me is the amount of money in this system, and it never gets passed on to the worker—in this case, in Vietnam. While an average worker there may make 60 cents an hour ($150 / month, 25 days, 10 hours per day) (Dr. Sheng Lu, U of DE)—or around 75% of the living wage in Vietnam (industiALL)—the CEO of Nike will be "earning" $10,000 an hour ($20 million / year, 240 days work, 8 hour day) (Citizen-Times). And the company made nearly $4 billion in profit last year (Marketwatch). So shareholders—who have no skin in this, save their money—made out well too by voting with their investments to send jobs off-shore. Obviously, the company could have kept all its manufacturing right here in the USA—or paid its overseas workers more—and still remained afloat. After all, the manufacturing cost of a pair of Air Jordans is $16—and they retail for over $200 (Wall Street Journal).
One can call this a global redistribution of income—sort of—or call it by its other name: corporate greed.
43
what control do we have? who hears our voice? None and no one. Our communities/ states have been sabotaged with the uprising of corporate monopolies who have wiped out local merchants. This is where we used to spend our wages and, most of these profits were invested back into their business for growth thus creating more jobs. Walmart ! I have never purchased a single item from this monster regardless of pennies saved. Billions of imports from China , paying wages that barely fill a families grocery bag and Yet...... they thrive.
Corporate America does not give a dam about the millions of "worker bees" that take their innovations to creation. Corporate America has us by the b-- for our choices are few and any wage is better than none.
The acquisition of dollars has turned into an ugly game called greed. The more decimals in you yearly income ......you are now a member of a club that equates success and a bonus...power to be heard with invitations to a table of elites. so I guess 21st century motto really is "the one who dies with the most toys wins" ?
Corporate America does not give a dam about the millions of "worker bees" that take their innovations to creation. Corporate America has us by the b-- for our choices are few and any wage is better than none.
The acquisition of dollars has turned into an ugly game called greed. The more decimals in you yearly income ......you are now a member of a club that equates success and a bonus...power to be heard with invitations to a table of elites. so I guess 21st century motto really is "the one who dies with the most toys wins" ?
1
The U.S. citizens who gain most from global trade are not "poor Americans who get cheaper goods" but wealthy Americans with capital to invest. Ironically, these people are also the most likely to endorse military intervention (and expenditures) overseas while least likely to serve in the armed services. Such are the economics (and politics) of an empire.
37
The title of this piece is: How Much Do We Really Know About Global Trade’s Impacts?
For one thing, we know that for the first time in history that there are more billionaires that live in Beijing than live in New York City.
For one thing, we know that for the first time in history that there are more billionaires that live in Beijing than live in New York City.
22
Loss of mfg. jobs in USA is considered from a narrow angle of
of offshoring to China, Mexico,etc. However, foreign companies from
other countries have set up mfg. operations in USA. BMW, Toyota, Honda,
and Mercedeze,etc are example. In fact, USA has been the main destination
of foreign investment (excluding financial investment). How many jobs
foreign investment creates here is ignored in the discussion. It is not a one way street.
of offshoring to China, Mexico,etc. However, foreign companies from
other countries have set up mfg. operations in USA. BMW, Toyota, Honda,
and Mercedeze,etc are example. In fact, USA has been the main destination
of foreign investment (excluding financial investment). How many jobs
foreign investment creates here is ignored in the discussion. It is not a one way street.
8
I'm the author of a much earlier article in the QJE about the gains from freer trade. It didn't say a word about jobs, but rather was an empirical, quantitative analysis of gains in production -- GDP -- in eight countries. (answer: large.) Can't write about everything in one journal article!
Of course the effects of trade on jobs are important, and electoral politics exaggerates that importance enormously. Imagine Hillary Clinton telling the unemployed in the Rust Belt that "American manufacturing output is healthy, in fact bigger than ever, it's just that we do it with fewer people, that's what rising productivity and incomes are all about, you guys just have to suck it up and find something else to do." But that is, in fact, what happens.
I'm as concerned as anyone about those who are hurt by freer trade, in fact I wrote a paper about that too. But I'm also concerned about how electoral politics is focusing almost completely on the jobs dimension while almost nothing is being said about how healthy our manufacturing sector is and what a good thing that is for the country as a whole.
Of course the effects of trade on jobs are important, and electoral politics exaggerates that importance enormously. Imagine Hillary Clinton telling the unemployed in the Rust Belt that "American manufacturing output is healthy, in fact bigger than ever, it's just that we do it with fewer people, that's what rising productivity and incomes are all about, you guys just have to suck it up and find something else to do." But that is, in fact, what happens.
I'm as concerned as anyone about those who are hurt by freer trade, in fact I wrote a paper about that too. But I'm also concerned about how electoral politics is focusing almost completely on the jobs dimension while almost nothing is being said about how healthy our manufacturing sector is and what a good thing that is for the country as a whole.
7
I'm the one who said your failure to mention jobs in your other article meant the article was so narrow in scope that it was meaningless in the real world people occupy. Now that I learn that you are so concerned about those hurt by free trade that you actually "wrote a paper about that too." So you're good with writing papers, and you're probably a white collar employee (professor) of a university, so insulated from the real world that lost jobs don't much affect you, i.e. what's good for "the country as a whole" is good for you. But it isn't good for millions of working people, which is maybe why campaigning politicians have to pretend to care about that. You know, care about working people, who do happen to be part of "the country as a whole."
11
There is no "country as a whole" anymore. There is a tiny but immensely powerful group of corporate oligarchs who owe allegiance to no nation, and there is a well off but nervous upper middle class, desperately trying to persuade themselves that education and obsessive work will allow them to stay on the corporations' good side. There is a small group of chronically poor. Then there is a huge group of people, formerly known as the middle class, now, perhaps, better referred to as the losing class. These groups have little in common, and they lack the sense of solidarity and common purpose that make "a country as a whole."
17
It's completely what I think is wrong with today's politics in every democracy.
Those who got hurt are always the loudest and make great political drama. Those who benefit are silent because they don't want to be seemed privilege and be targeted.
Ignorant voters don't know there is no way to reverse back or stop doing free trade. Because ones you stop, the economy is going to contract and other countries will catch up, and then everybody is worse off.
Those who got hurt are always the loudest and make great political drama. Those who benefit are silent because they don't want to be seemed privilege and be targeted.
Ignorant voters don't know there is no way to reverse back or stop doing free trade. Because ones you stop, the economy is going to contract and other countries will catch up, and then everybody is worse off.
1
The huge financial illiteracy of the average american is dwarfed by the magnitude larger economic illiteracy of the average american. It explains a lot about the attraction of voters to Trump. Clueless. The cognitive dissonance is also telling. As an anecdote, I encountered a Trump supporter and campaign group at a street fari. After listening to their spiel, I showed them that over 75% of their campaign stuff (as well as almost all the clothes they were wearing individually), were all imported and pointed out the percentage of imported parts were on the Trump committee chair's vehicle parked nearby. Apoplexy would be a kind description of their response.
10