We Don’t Feel Better Off Because We Are Not.
Dear trade experts: Cheaper consumer goods don’t make up for lost jobs, lower living standards, and diminished opportunities.
By STAN SORSCHER
Dec. 4, 2018) — Earlier this year, trade experts explained to two audiences in Seattle how workers should adjust to the global economy. Workers displaced by global competition could learn computer skills and move to Boston, San Francisco, and Seattle.
One of the experts expressed disappointment at her failure in reassuring workers that our free-trade approach to globalization made us better off.
At a third meeting a few weeks later, two trade experts from Mexico said their country’s biggest problem was inequality. One, an economist, said he was “agnostic” about whether free trade made inequality in Mexico better or worse.
The level of faith regarding that question is probably stronger among the million Mexican farmers displaced from their homes by imports of U.S. corn, whose wages have gone down under globalization.
Let me take a short diversion.
A friend of mine knows that I grew up in Flint, Mich. She planned to drive through Flint, and asked me how she could catch a moment of the Flint experience. I recommended Angelo’s Coney Island at Franklin and Davison Road, which is actually in Wikipedia. Angelo retired long ago, and the current restaurant is not the Angelo’s I remember growing up.
My father’s office and a dry cleaning store were just up Davison Road, although both are gone now. Kitty-corner from Angelo’s, was Gil-Roy Hardware. That building is empty now. Across the street, the Franklin Pharmacy is also empty. A little west on Davison Road, the old Brown funeral home building is fire-damaged, and grass is growing up through the parking lot.
Zillow says my very nice childhood home sold in 2003 for $152,000. Zillow recently listed that house and others in good condition on that block at $39,000. Growing up, Flint had four big public high schools. One is enough now.
I told my friend she should see the historic General Motors factory on Hamilton and Industrial Avenue, where autoworkers staged the first sit-down strike. I sent her a picture of the site from Google Earth. The factory and Industrial Avenue are an open field, overgrown with tall grass.
[On the plus side, the Flint Farmer’s Market is really cool. One remaining factory on Bristol Road is busy making pickup trucks. We still have the Art Institute, lots of educational resources, museum, performance center, and a planetarium that I enjoyed, growing up.]
Imagine those first two trade experts making their argument to my friends and family who grew up decades ago in an industrious, productive community. GM workers in Flint worked hard at difficult, sometimes unpleasant jobs to provide economic security for their families. Under the social values of the time, we all did better when we all did better. In that economy, workers shared in the gains they created in the automobile industry, not the least because the United Auto Workers negotiated their terms of employment.
One of the trade experts I heard in Seattle is a consultant, who advises corporate clients operating in China. In her remarks, she said she could not understand why her message didn’t connect with people. In the Q&A, I asked her what change we might make in our trade policy that would improve the lives of people whose lived experience was so discouraging that they had lost confidence in the way we manage globalization? Someone in the back of the room asked her to repeat the question, so he could hear it. She said, “The question was, how can we do a better job of explaining the benefits of globalization?”
I said, “That was not the question.”
This trade expert said we just needed to remind those who felt left behind that they paid lower prices for TVs and other household goods.
After some thought, I realized her argument does reach listeners with great clarity and force, just not in the way she had intended.
Many of us understand exactly what she is saying and we are insulted.
Trade, more than any other policy, is disruptive. In the 20-plus years since NAFTA, our establishment policymakers decided millions of workers in the U.S. and Mexico should run a race to the bottom. Now they are telling us our way of life is in decline, but “it’s OK,” because we can get T-shirts on sale at JC Penney’s for $7, and workers in Mexico can get cheap corn.
Our trade expert can’t imagine how patronizing that sounds to millions of workers — to be told to invest in a STEM degree, leave what you’ve known all your life, and join establishment elites on the east and west coasts.
We should be sending a better message.
First, we can agree that the purpose of an economy is to raise living standards, build stronger communities, invest in our futures, and improve the quality of life. This means sharing the gains from globalization, productivity, and innovation more broadly.
Second, every country should recognize its legitimate national interests, and agree that government plays an important role in raising living standards. That means finding strategies for manufacturing, education, workforce training, research and development, infrastructure, and health care. The measures of success for new policies should be well-being and stronger communities.
This may seem radical. It’s not. It’s what I heard all the time growing up.