The Price of Globalization: American Jobs

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By THE INTERNATIONAL HERALD TRIBUNE | February 2, 2012,


A new consensus is forming among some influential economists: global trade is not good for everyone — at least not equally. Factory workers who have seen their jobs exported to countries with cheaper laborers could have told them that, you say? But this is an important sea change, Chrystia Freeland writes in her latest Page Two column. Referring to a recent paper by David H. Autor, David Dorn and Gordon H. Hanson, she says, we are not talking about protectionists.

Drawing on detailed data from local labor markets in the United States, the authors of the ‘‘The China Syndrome’’ argue that globalization, and in particular trade with China, is having a huge impact on blue-collar U.S. workers: ‘‘Conservatively, it explains one-quarter of the contemporaneous aggregate decline in U.S. manufacturing employment.’’

The deleterious effects go beyond those workers who lose their jobs. In communities hit by the China syndrome, wages fall — particularly, it turns out, outside the manufacturing sector — and some people stop looking for work. The result is ‘‘a steep drop in the average earnings of households.’’ Uncle Sam gets hit, too, especially in the form of increased disability payouts.

Chrystia says that Europe, and especially Germany, can teach the Americans a thing or two: “Germany has turned the China Syndrome to the benefit of both its chief executives and its blue-collar workers.”

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http://rendezvous.blogs.nytimes.com/2012/02/02/the-price-of-globalization-american-jobs/