Ah, the glories of globalization! It's easy to see why Barry wants to sign a Pacific trade agreement, especially given what happened in Galesburg, Illinois in the aftermath of NAFTA. There was a time when relatively good-paying manufacturing jobs were the norm in Galesburg; Butler Manufacturing built steel silos, Maytag built refrigerators, Outboard Marine and Lawnboy were pumping out product. And then, along came NAFTA - and H. Ross Perot was proven correct in his assessment:
In 2004, Maytag shut down the refrigerator factory that for decades was Galesburg’s largest employer and moved much of the work to Mexico. Barack Obama, then running to represent Illinois in the Senate, described the workers as victims of globalization in his famous speech that year at the Democratic National Convention.
A decade later, many of those workers are still struggling. The city’s population is in decline, and the median household income fell 27 percent between 1999 and 2013, adjusting for inflation.
By any measure, then, the trade agreement has been a raging success (assuming that one considers poverty a success story). Today in Galesburg, one can now work two jobs and earn perhaps $22,000. Fancy that!
It is one of the basic principles of economics that trade is good and more trade is better. But as Mr. Obama presses Congress for the authority to negotiate a new generation of trade deals, the struggles of Galesburg illustrate why some economists have come to doubt the relevance of that orthodoxy.
In theory, less productive jobs go away and workers gravitate to new jobs. In practice - and particularly in small cities like Galesburg, unemployment increases. Income drops. Add into that the increased numbers of people looking for work as technology displaces low-rung jobs and creates second jobs that most people don't even realize they have: in all probability, you're pumping your own gas. You're scanning and bagging your own groceries.
You're doing the work that employers used to pay people to do, and you're not even aware of it. But the people who used to have those jobs are certainly aware of it. These so-called "shadow jobs" are already contributing to increased unemployment as you do - free of charge - the work that others were paid to do; saving the employers not only the cost of wages, but in most cases, the cost of benefits and other overhead.
Banks need fewer tellers when you do your banking online, and travel agencies need fewer agents when you book your travel and accommodations online. And it's only going to get worse: already, law firms are beginning to deploy software that can scan documents faster and more accurately than paralegals. Welcome to the breadline, white-collar workers.
Remember when your local television newscasts had actual people operating the cameras in the studio?
If the job situation seems a bit bleak right now, just wait a few years. Let's give Barry's Pacific trade agreement time to kick in.