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Most Workers Lose in Global Economy
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Here is one strong reason for the Obama administration and Congress to think big about how to reduce economic inequality and insecurity in the years to come: Most working Americans have suffered steady and significant income losses that stem from current global economic policies, according to a new book.
While the effect of global trade on American workers is often measured in jobs lost, Josh Bivens, an economist with the Economic Policy Institute (EPI), argues in his new book that the vast majority of U.S. workers have been hurt by increased global trade—through diminished wages, as well as lost jobs.
In Everybody Wins, Except for Most of Us, Bivens says global trade likely cost a full-time U.S. worker earning the median wage some $1,400 in 2006. This is as much or more than what median wage-earners lost during the recession of the early 2000s. For workers on its losing end, globalization has felt like a chronic (if largely unseen) recession.
Bivens says policymakers have ignored this hidden recession in a global rush to the bottom. Speaking at the EPI in Washington, D.C., Tuesday, Bivens explained what’s happening:
Apparel workers lose their jobs because of imports. As the apparel workers go into other jobs, they compete with workers with similar qualifications and pull the wages down in those occupations. Landscapers and nursing home aides, for example, don’t lose their jobs because of imports, but they lose wages because of increased competition for their jobs caused by imports.
While higher-wage workers with college degrees may have benefited from the lower prices of cheap imports, they, too, have lost out because of the way the global economy operates, Bivens says. Even though it’s hard to get a precise figure, he says there is evidence that white-collar workers—accountants, software engineers and others—may not have lost their jobs to offshoring, but they have been scared off of asking for raises by talk of jobs going overseas. It is this “wage threat” coming from the global economy that costs these workers, he says.
Bivens also notes that globalization may well reduce U.S. wages in the future to a much greater degree than experts once thought possible as new technologies make industry that can transfer its output via data lines vulnerable to global competition.
If the predictions of some very well-credentialed economists about the reach of service-sector offshoring hold true, this could potentially drag on the growth of living standards for a huge number of American workers for decades to come.
There is no silver bullet to fix these problems, Bivens, says, “but there is silver buckshot.” Some major policy changes, which many people do not associate with trade, are needed as quickly as possible, Bivens says:
- Enact universal, affordable health care. The global economy actually makes the need for universal health care greater than before, he says. Globalization shortens the time a worker stays with one employer. The days of a worker staying on the job 20 years is over. But staying with one company was the way workers built up health insurance and benefits. It’s time to break the link between employment duration and access to health care, he says.
- Pass the Employee Free Choice Act. The legislation would restore the ability of workers to negotiate decent pay and benefits, which globalization has pushed down.
- Revise tax policies to require higher wage earners to pay their fair share and not place the bulk of the tax burden on lower-wage workers.
- Finally, we need better trade policies that focus on workers’ rights in other countries and not so much on the concern for the corporate agenda.
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4 Comments
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Finally somebody gets it.
I have an article at http://www.KeepAmericaAtWork.com titled Average wages from 96 till 06 that has a chart that shows our average wages.
The link is here http://keepamericaatwork.com/?p=14
These figures are taken using everybody from the poorest to the richest that filed tax returns with the IRS and the figures suprised me.
My suspicion is that when I’m able to add the 2007 figures in there that we are going to see a fairly substantial drop and I think it will be much more then the 1,400 described in this article.
For another view on globalization and it’s effects on auto-workers around the world, the following stories are from an internationalist and socialist persepective. Worth reading: the daily World Socialist Web Site: http://www.wsws.org.
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As global auto crisis deepens
Bush administration stalls on bailout
By Tom Eley
18 December 2008
http://www.wsws.org/articles/2008/dec2008/auto-d18.shtml
“…
The collapse in the auto industry is accelerating in Europe and Japan as well. In Europe, new car sales are off 25.8 percent, even worse than in the US. Italian auto giant Fiat SpA has announced plans to idle 40,000 workers on an alternating two- to four-week basis over the coming months. Swedish Volvo, German Volkswagen, and its Spanish subsidiary Seat have also announced major production stops.
Nor have Asian automakers escaped the crisis. Toyota Motor Corp has recently demanded that its major steel supplier, Nippon Steel Corp, accept a 30 percent price cut. It has also indefinitely delayed plans to open a new Prius plant in Mississippi, and Standard and Poor’s warned that it may downgrade Toyota’s high credit rating. On Wednesday Honda revised its profit estimates downward to 185 billion yen ($2.08 billion) from an October estimate of 485 billion yen, and Nissan announced production cuts in Japan of nearly 80,000 vehicles for the coming year.
Any collapse of the US auto industry would devastate both Mexico and Canada, which are fully integrated into a continental system of auto manufacture. …”
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Why the UAW and the Democrats are pushing economic nationalism
18 December 2008
Jerry White
http://www.wsws.org/articles/2008/dec2008/pers-d18.shtml
“Automotive production is the most globally integrated industry in the world, drawing on the resources and skills of millions of working people in dozens of countries. In the most profound sense, there is no longer any such thing as a “national” car company. Chrysler produces mini-vans in its US plants for Volkswagen; GM builds cars with local Chinese manufacturers; Volvo, a “Swedish company,” is owned by Ford.”
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I just read “Low Wage Capitalism” by Fred Goldstein, and was shocked by how profoundly globalization has effected us. In order for we workers to fight back, we need to understand all of globalization’s ramifications. This book is the best book yet written on this issue, from a worker’s viewpoint.
It is true that at the present time Most Workers lose in a global economy. That is because at the present time the global economy is a capitalist economic system. If this global economic crisis has taught us one thing it is that unlimited growth in not sustainable in a global economy.
A global economy must be equatible if it is to be sustainable. This can only be achieved by proper utilization, distribution and regulation of the worlds resources.
The more equatible our economic system becomes in the 21st century, the more the Workers will gain.
This can only be achieved by abandoning our current preadtory capitalistic and corporatistic tendancies and by employing sound democratic principals to create a more equatible and sustainable economic system which will lift all people out of poverty thus creating a better world for all people.