We have much-politicized discussions in the USA about the decline of American manufacturing and the disappearance of well-paying, good jobs in manufacturing, caused by international (“unfair”) trade. Similar discussions are also taking place in Europe, where the existence of the EU may be at stake. In a series of three blogs that follow, I address US manufacturing, international trade, jobs, and inequality. The bottom line is that things are not as bad as populist demagoguery claims it is. Our economy is growing, but significant numbers of disaffected, lesser educated workers justifiably feel left out from sharing in the benefits of economic progress. Their resentment has put an unqualified demagogue into the White House; others here and in Europe may follow. It is time to act to save our progressive democracies.
In the first blog of this series I look at employment and GDP data to respond to the question: is manufacturing dead? The answer: no, it is not dead, it is alive and well, but the economy is changing. In the second blog of this series, I look at the evolution and current state of international trade and trade balance. Global trade (including all exports and imports) is now about 60% of global GDP. Trade is good, it promotes peace and economic growth. I draw on personal experience and offer some insights into strategic forces that led to increased US imports of consumer electronic goods, and its relatively minor contribution to job decline. In the third, I review briefly the history and continuing evolution of automation and its overwhelming impact on jobs. I conclude: (1) jobs are disappearing because of automation, a process that replaces labor with capital, making it a driver of growing income inequality; and (2) the most important issue we must address is a growing need for socio-economic adjustments to cope with the overwhelming secular forces driving us further into inequality and societal polarization.
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