what is globalization, anyway?

Adam Stevens a_ste at uclink4.berkeley.edu
Thu Nov 25 16:25:30 PST 1999

>>But I'm not going to deny that plant relocations to Mexico and
>outsourcing contracts in China have put a sharp squeeze on U.S.
>manufacturing employment and earnings, and the threat of those things
>has greatly reduced the bargaining power of U.S. workers. How much
>has this contributed to downward mobility and increasing stress? The
>econometricians say that trade explains, at most, about 20-25% of the
>decline in the real hourly wage between 1973 and 1994. (The real wage
>has actually been rising for the last five years.) That still leaves
>75-80% to be explained, and the main culprits there are mainly of
>domestic origin. I'd say an important reason that trade doesn't
>explain more of our unhappy economic history since the early 1970s is
>that 80% of us work in services - and a quarter of those in
>government - which is largely exempt from international competition.>

But couldn't the rise of the service economy itself be PARTIALLY responsible for the post '73 decline in real wages, since service jobs on average pay less than manufacturing jobs? Perhaps this is just part of the 'leftist mythology' which you are assailing, but the "common sense" scenario many people use to explain the decline in wages is that workers who might have been able to make a living wage in the manufacturing sector during the "Golden Age" were now forced to take crappy $6/hour service sector jobs. Are you saying this has NO baring on wages during the 73-94 period?

>and to rethink the Golden Age of the 1950s
>and 1960s not as some sort of norm from which the last 25 years have
>been some perverse exception, but the Golden Age itself as the

I have to say that I think this is right on the money. While I understand why many people who spent the formative part of their lives working during this period tend to view the Golden Age as "normal," I think it was clearly an exceptional period, historically speaking.

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