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Why Globalization Doesn't Matter So Much Anymore in the Inequality Debate
President Obama has spent a lot of time in Asia talking about the Trans-Pacific Partnership, the big trade deal that negotiators have been working on for a few years. But all that energy is probably for naught, at least for the time being, since the TPP isn't going anywhere in Congress anytime soon. I could say more about the TPP, but I'll spare you, since most people don't share my fascination with global trade.
Instead, let me make a bigger point: Which is that trade issues just don't matter as much as they used to, at least when it comes to inequality, which is the filter through which many progressives think about trade. To be sure, trade still matters plenty when it comes to the overall question of prosperity, since getting U.S. exports into foreign markets is important for spurring growth. And the details of trade arrangements also matter in terms of whether these deals help raise environmental and labor standards in developing countries -- which can have big long-term implications for both those countries and for us, since we have a huge interest in helping grow a global middle class and create modern environmental regulations worldwide.
But trade has become less decisive in determining the fate of America's working class, and for an obvious reason: This group of workers has already suffered devastating losses from globalization to the point that, really, it's hard for things to get things much worse. While some 12 million Americans still work in manufacturing jobs, many are now doing jobs that it doesn't make sense to ship overseas -- either because the jobs are too sophisticated or the wages aren't very high or there are reasons to keep production state-side.
Yes, plenty more white-collar jobs still can and will be outsourced abroad, but it's not clear that trade rules much affect these job losses one way or another.
These days, much job growth in the U.S. is in industries where work can't be moved abroad: retail, restaurants, hospitality, healthcare, and various services. Just look any given month at the BLS jobs data, and you'll find that up to half of new jobs may be in retail and restaurants alone.
Wages in these jobs have definitely been pushed down in recent decades by globalization -- since when the local factory closes, more people try to get jobs at Walmart. But looking forward, the key to raising these wages lies not in better trade rules. It lies in pressuring employers to change their ways. Which is why the union activism of recent years has been such a big deal.
We're in a different debate about class, work, and inequality than when trade pacts like NAFTA and WTO drew a lot of heat and the fight was still on to save the U.S. manufacturing base. Now, it's less about holding on to something that once was, and more about dealing with the low-wage economy before us and creating something new.
