Globalization, trade and technology not to blame for four decades of stagnant US wage

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This is only indicative, but you'll get the point. It's curious to single out trade or globalization in general for uprooting the American working class. Trade generally is a positive-sum game, meaning the winners could compensate the losers and still be better off. 

The winners from trade are those industries that sell abroad, and consumers that face lower prices from imports. 

But for the winners to compensate the losers, you'll have to have some mechanism in place, like progressive taxes and a welfare state that compensates losses and activates and enables people to deal with these (like education and retraining). 

Now, such activating welfare states are quite expensive and by no means universal, but they do show promise in countries like Denmark. 

However, why single out trade as the big disruptor? Capitalism is very dynamic and there are always growing and declining industries. In the US, the shale revolution has put coal on the back burner, and this has nothing to do with trade. Also, automation makes people redundant, which is why we only have a couple of percentage points of the labor force working in agriculture, compared to over half a century ago. 

Or take this:

Uber’s self-driving car pilot launched in Pittsburgh. While Uber Technologies Inc. sees the launch of its self-driving car program as a step forward in transportation, its drivers are not so sure. Uber announced Wednesday that it had begun a pilot program of self-driving cars in Pittsburgh for select passengers. Right now, the driverless cars come with a human engineer who intervenes when necessary, but drivers fear a future in which they will be entirely replaced by software and sensors.

Jim Conigliaro Jr., founder of the Independent Drivers Guild, which represents 35,000 Uber drivers in the New York City area, said he found the launch “concerning” particularly because Uber has been working with regulators to allow ride-hailing in cities on the premise that it brings jobs to the community.

Uber drivers go to war against self-driving cars - MarketWatch

First, we had existing taxis fighting Uber. Now we have Uber drivers fighting Uber for introducing self-driving cars. Again, nothing to do with trade or globalization...

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It's basically nonsense that trade has decimated US jobs. There is a simple countervailing argument. Would not opening up to the world economy have produced superior growth and jobs? Nonsense.

Trump argued that NAFTA, which took effect in 1994, cost Rust Belt states like Ohio and western Pennsylvania manufacturing jobs. He vows to bring back these sorts of low-skill jobs.

“That’s a highly misleading metric because the evidence shows that trade agreements, over a period of time, make little or no difference to the total number of jobs,” said Gary C. Hufbauer, a leading researcher for the Peterson Institute for International Economics, a nonpartisan but pro-trade think tank. “Trump doesn’t get this. A lot of people don’t get this. What trade agreements do is change the composition of jobs, the kind of industries they’re in.”

In other words, U.S. manufacturing jobs might have declined, but the decrease was offset by warehousing jobs, trucking jobs, banking jobs in trade finance and in other areas that feed into international commerce.

Exact numbers are in dispute. The more liberal Economic Policy Institute says NAFTA led to the loss of 700,000 U.S. jobs over its first two decades. The U.S. Chamber of Commerce said in a 20-year report on NAFTA that it helped create 5 million jobs through trade and increased competitiveness.

“A good way of measuring an agreement is did it increase two-way trade more than it would have otherwise,” said Hufbauer. “Texas and California benefit a lot because two-way trade with Mexico is much, much higher than it otherwise would have been if we didn’t have NAFTA.”

A McClatchy analysis of trade data shows that two-way trade between the United States and Mexico rose by 391 percent from 1995 – the second full year of NAFTA – to the end of 2015. Trade with NAFTA partner Canada grew by 112.4 percent in the same period, a slower rate that reflects that a U.S.-Canada free-trade agreement had been in effect since 1987. U.S. trade with the world grew by 182.4 percent from 1995 through 2015, to almost $3.751 trillion.

Two-way trade has grown sharply because of agriculture. Mexican tomato growers benefited greatly, at the expense of Florida growers. But U.S. corn farmers have been among the biggest winners. U.S. exports of yellow corn have grown from 66 million bushels in the 1993-94 growing season to 444 million bushels – 24.9 million pounds of corn kernels – in the 2014-15 season – a 572 percent increase.

“An overwhelming win,” said Paul Bertels, vice president of production for the National Corn Growers Association, based in Chesterfield, Missouri.
Corn used to feed farm animals moves from Illinois, Missouri, Iowa and elsewhere by barge and rail to Mexico, and the increases have allowed Mexico to boost its livestock.

“Over the last few years, they’ve really become a growing market for U.S. pork products,” he said. During the 1992 presidential campaign, third-party candidate Ross Perot warned of a giant sucking sound of jobs going to Mexico. In fact, the majority of manufacturing jobs in the following decade went to China, which joined the World Trade Organization and sought to attract foreign investors.


Perot and his son Ross Perot Jr. benefited handsomely from NAFTA as their Hillwood Development Co. helped build the Fort Worth Alliance Airport, an industrial airport opened in 1989 that’s now a hub for air cargo into Mexico, complete with railroad connections for freight and a FedEx state-of-the-art facility. Alliance Air Services, a Hillwood subsidiary, manages the airport.

“The easiest way for HRC (Hillary Rodham Clinton) to respond to Trump’s attacks on NAFTA is to state that NAFTA came into force in 1994 and over the next six years the US economy enjoyed one of strongest sustained periods of economic growth in the post-WWII era,” Neil Dutta, head of U.S. economics for forecaster Renaissance Macro Research, wrote Tuesday in a note to investors. “So, how bad could it have been?”

Presidential debate: Donald Trump, Hillary Clinton don't defend NAFTA trade deal | The Charlotte Observer

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Here are seven forces that will reshape the US (and other nations) labor markets. Why are some so focused on trade, it's only one among many forces. From Forbes:

7 Workforce Threats That Didn't Exist 10 Years Ago

Vicky Valet ,  FORBES STAFF
I am the senior producer for Forbes’ Leadership channel.

As innovations once thought of as nothing more than fiction are becoming a reality, the workforce’s future is increasingly uncertain. Sixty-five percent of Americans believe robots will do their work in 50 years—but what if that timeline was only a decade? Threats to your job may emerge sooner than you thought.

Workforce Automation
Forty-seven percent of all U.S. jobs are at risk of being phased out in favor of advanced robotics. Automation poses a particular threat to manufacturing and sales sectors, where autonomous machines and the Internet of Things may prove more practical than human labor. Timeline: 2020

Artificial Intelligence
Advancements in machine learning and natural user interfaces are helping devices absorb information and execute responsibilities currently performed by professionals. Industries across the board, from education to legal to transportation, may all be replacing their workers. Timeline: 2020

The Sharing Economy
Uber and Airbnb made the meaning of “workforce” a lot more fluid. What used to require a tight company can now be done by an army of contractors. Those outside the share zone are vulnerable, too. If employers can connect with new talent, those inside forfeit labor protections. Timeline: It’s here

The Freelance Economy
In 2015 15 million Americans were self-employed, and as remote working and online jobs platforms become more ubiquitous, the population of freelancers is expected to grow. Employers may maintain more exclusive groups of full-time employees and supplement with contractors. Timeline: It’s here

3D Printing
Manufacturing and production industries could reap big benefits from 3D printing, including increases in on-demand production, sustainable resource use and supply chain productivity. This impending widespread adoption, however, may make human labor redundant. Timeline: 2017

Globalization
As nation borders progressively fade, the structure of the U.S. workforce will morph, too. As talent can more easily move between countries, organizations could increasingly turn to outsourcing. Ease of trade may jeopardize the jobs of those in industries like oil and gas, too. Timeline: It’s here

Urbanization
The urban population is rising rapidly, with 1.5 million people moving to metros each week and the total number of city dwellers expected to reach 5.2 billion by 2050. A move once the norm for hungry job seekers is putting pressure on infrastructure, the environment and even the market. Timeline: It’s here

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Try to calculate the share that those three “bad trade agreements” played in the processes of manufacturing job loss, of widening income inequality, and the coming of the overclass of the Second Gilded Age, and — as long as you calculate honestly — you get a share of responsibility of less than 5 percent, and usually less than 1 percent. This is what caused a populist backlash? 

The $100 billion 1960-purchasing-power dollars we spent on food in 1960, for example, amounted to 20 percent of everything the US made. The $1.5 trillion of 2016-purchasing-power dollars we spend on food today is only 8 percent of everything we make. And more than $300 billion of our annual food budget today is for food processing that is paid for today but that was done unpaid by wives, mothers, sisters, and daughters back in 1960.

To be caught up as a victim of such a process of displacement — to be a farmer who loses his job because the economy is getting more efficient at producing food — is a bad thing. It’s not just that you need to find another job. It’s that you need to find another kind of job. You may well not be prepared or equipped for it. And it changes who you are. And that is if you can find another job

NAFTA and other trade deals have not gutted American manufacturing — period - Vox

Donald Trump’s climate change denialism is no more at odds with the educated consensus than is his quiet denial of job automation, one of the most critical economic issues of the next few years. Although, to hear many Americans talk about it, one wouldn’t think it such a critical issue at all. In fact, most Americans aren’t worried about it at all. A White House report from early 2016 predicted an 83 percent likelihood that workers making $20 per hour will lose their jobs to robots. For those making twice that, $40 an hour, the chance is 31 percent. Considering the amount of time devoted by President-elect Trump to concerns that China takes American jobs, his silence on automation feels like a willful avoidance of the issue. And ignoring automation is, for the moment, the American way.

Automation Denialism Continues to Thrive | Inverse

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DDonald Trump voters have found comfort in his promises about more U.S. manufacturing jobs and threats to get tough on trade. But 87% of U.S. manufacturing jobs lost between 2000 and 2010 were from factories becoming more efficient through automation, according to a recent study by two Ball State University professors. That leaves just 13% lost to overseas competition. 

Some analysts have predicted that protectionist policies under the Trump administration may actually increase job losses. After all, when domestic companies are forced to manufacture more in America but automation can keep costs down, the net result is more capital investment but fewer employees..

5 ways to invest in the robot revolution - MarketWatch

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This strategy is based on flawed thinking. Manufacturing is certainly not as important to the U.S. economy as it once was, declining to less than 12 percent of gross domestic product in 2016 from 26 percent 50 years earlier. But the whole idea that “we don’t make anything,” as Trump himself has put it, is a fallacy.

The U.S. remains a production powerhouse, accounting for almost 19 percent of global manufacturing, behind China’s 25 percent but bigger than Germany’s and Japan’s shares combined. U.S. manufacturers are still extremely competitive in high-tech and hard-to-duplicate products—think Boeing Co. aircraft. And even as some factory work has moved abroad, the U.S. economy remains remarkably strong. Home to many of the world’s most important and innovative companies, from Facebook Inc. to Tesla Inc., the U.S. boasts an unemployment rate of 4.3 percent, less than half the euro-area level.

What Trump fails to appreciate is that the true value in making something is no longer in making it. Companies figured out long ago that they can capture most of the value of a product by focusing on its design and research and development, its branding, and the services that support it after it’s been sold. Stan Shih, the founder of Taiwan’s Acer Inc., illuminated this phenomenon in the early 1990s with his “smile curve.”

Factories Won’t Bring Back the American Dream - Bloomberg

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In the 1920s more than 800,000 Americans worked in the coal mines. Many developed debilitating and deadly health problems. In 2008 national coal production peaked, yet technology had cut the number of jobs by 90 percent. Today, as consumers turn to cleaner and cheaper sources of energy, the societal benefits are widespread: Deaths from coal pollution have dropped 40 percent, and jobs in the renewable energy industry have soared. But this trend has also left coal miners, whose numbers have dwindled, in difficult positions, particularly since their employers have been walking away from their pension and health-care obligations. We can both embrace the societal benefits of technological change and confront the challenges it poses for individual workers and their communities—but only if we expect government leaders to look forward instead of backward and to develop effective responses rather than pitting groups against one another.

What We Need—and Don’t Need—From Government in the Robot Age - Bloomberg