OPINION:
The international economy is so interlocked that creating jobs in one national economy creates jobs in another national economy. That’s why it’s misleading to talk of the Chinese and other low-wage countries having “stolen” American jobs. It’s not “just that simple.”
China does indeed run an enormous trade surplus with the United States. In 2015 its surplus of exports to America over import of American goods was a record $365.7 billion. But it’s also true that China accepts a debt of an increasingly devalued U.S. currency for its labor and imported raw materials it must have to make the goods it sells to the United States.
In one measure, by subsidizing its exports and manipulating currencies, China might be “stealing” jobs, but China in effect also exports capital. American consumers are getting low-cost consumer goods. One hand, you might say, washes the other. Campaign promises by both Donald Trump and Hillary Clinton to “return” jobs from China and other low-wage countries are rarely accompanied by these explanations. Erecting tariff barriers against such imports would mean higher prices and reduced consumption. It’s the price, and the benefit, of interlocking economies.
The full effect of returning these jobs to the United States would not be as simple or easy as it sounds from the campaign stump. The “return” would produce very different jobs from the jobs dearly departed. American unemployment figures are skewed by the inevitable introduction of advanced technology. Some jobs would have disappeared due to advanced technology, anyway, and would never reappear.
Re-education and retraining workers for new and different jobs is often cited as the solution for new jobs and enormous sums have been devoted over decades to re-educating the work force. But most studies show that displaced factory workers in the United States, on average, have lower wages after retraining for new jobs. Often the worker retrained is in mid-career, when he is older and less amenable to change and a new way of doing things, than a young man or woman just entering the work force. Different personalities succeed in different ways as well, and some not at all. Researchers estimate that under the best conditions one expensive academic year of such retraining at a community college increases the long-term earnings by about 8 percent for older men and about 10 percent for older women. With increasing technology, often intimidating to older workers, older retrained workers succeed more slowly.
Rather than talk in terms of “bringing back jobs” that appear to have disappeared to places across the seas, economists and the candidates should be talking about creating jobs at home — and how to eliminate stifling regulations and restrictions imposed by the federal government, which have shut down interlocking parts of the economy. That’s where the larger trouble lies. It’s pretty simple.
Please read our comment policy before commenting.