New report examines the costs of globalization for American workers without a college degree
Trade’s impact on American workers was a topic of heated debate during the recent presidential election. Most of the discussion focused on the implications of the overvalued dollar, which makes imports cheaper and exports more expensive—thereby contributing to the large trade deficits the U.S. economy has consistently generated in the last 15 years. Over the last decade, this overvalued dollar has been driven primarily by countries—particularly China—that, as a matter of intentional policy, manage the value of their currency for competitive gain.
This is indeed an important issue and has serious implications for macroeconomic outcomes such as growth in gross domestic product (GDP) and employment. However, besides this currently more pressing macroeconomic challenge to the U.S. economy posed by globalization, there is also a longer-run microeconomic challenge to wage growth of most American workers posed by the integration of a rich U.S. and much poorer global economy.
A new paper by the Economic Policy Institute (EPI) examines the microeconomic effects of growing trade flows with less developed countries and presents evidence that this sort of trade—dominated by China over the last decade—has been a significant drag on the wage growth of most American workers.
Related recent Blogs
- Indiana manufacturing program expands • by TGarland • 12/05/2013
- Scott Paul: Keep skilled jobs for skilled workers in Washington • by mmcmullan • 12/05/2013
- December 5, 2013: Another voice for a currency rule in the TPP • by mmcmullan • 12/05/2013
- Some Made in America gift ideas for the obnoxious teenager in your life • by LDonia • 12/04/2013
- A bad time to sideline trade talks • by mmcmullan • 12/04/2013
- Infrastructure investment means job creation • by TGarland • 12/04/2013
- December 4, 2013: Familiar trade deficit doldrums • by mmcmullan • 12/04/2013
- China trade deficit on pace for new record, but will anyone notice? Alliance for American Manufacturing (AAM) Statement. • by scapozzola • 12/04/2013
- What to do with abandoned factories? Bring in the artists! • by LDonia • 12/03/2013
- Surprise, surprise? Americans still say job creation should be top priority • by mmcmullan • 12/03/2013