What's good about losing jobs overseas?
In my workplace column today in The Kansas City Star, I write about Jared Bernstein, a senior economist at the Economic Policy Institute, author of a new book, Crunch: Why Do I Feel So Squeezed?
In that forum, I took him down a political path, given that it's an election year, and made him talk about the economic influence of the president.
I particularly like another topic, which he touched on in response to this question: Is there anything good about having jobs go out of the country?
His answer, in part:
"...over the course of the business cycle that began in March 2001, we've lost about three million factory jobs. At the same time, we've gained about seven million jobs in the service sector. So we're net gainers on the jobs front.
"But to get to the core of your question, we have to ask about the relative quality of the jobs both lost and gained.
"Factory workers who go over to the services usually lose a lot. We're often talking here about moving someone from a high-productivity unionized job with high-tier wages and fringes to a sector that's less productive, has much less collective bargaining, and has a much wider dispersion of compensation.
"Recent research into the consequences of layoffs reveals that just under three-quarters of re-employed factory workers suffer a real pay cut, and for 40 percent, it's a cut of at least 20 percent."
Bernstein notes that jobs that could be done more cheaply overseas resulted, because of global trade, in lower prices for American consumers. And, although U.S. manufacturing jobs fell, there still were good white-collar jobs for Americans.
But then came offshoring of white-collar jobs as well. He notes:
"If your work can be digitized or routinized, no matter how well educated you are, there may well be an equally smart person happy to look at that X-ray or write that computer code for about a tenth of what you make."
And that's caused a weakening of "high end" white-collar wage growth. It's not a given any more that education or higher skills will insulate U.S. workers from global trade pressures.
Clearly, we can't stop global trade. But he suggests what we need to do:
"We could and we should do a lot more to keep jobs from leaving the country...including leveraging other countries' desire to access our markets by insisting that our trading partners play fair, ending tax incentives to offshore, and investing in our manufacturing sector to go to work on any green alternatives we can think of."
There's a lot more, but it's too much for this space. Guess you'll have to get the book.


