From time to time we hear laments in the media about the flow of jobs out of the country and the deteriorating economic position of the American middle class. Much of the blame is placed on globalization (when they get done blaming Bush), but this article by Daniel Griswold in the New York Post argues that the conventional complaints about globalization are little more than myths. Griswold points out, for instance, that:
Like so many assumptions about trade, the belief that more global competition has somehow lowered the living standards of the average American worker and family is just a myth. The critics have it all wrong: The middle class isn't disappearing - it's moving up.
The Census reports that the share of U.S. households earning $35,000 to $75,000 a year (in '06 dollars) - roughly, the middle class - has indeed shrunk slightly over the last decade, from 34 percent to 33 percent. But so, too, has the share earning less than $35,000 - from 40 percent to 37 percent.
It's the share of households earning more than $75,000 that's jumped - from 26 percent to 30 percent.
Trade has helped America transform itself into a middle-class service economy. Yes, the country's lost a net 3.3 million manufacturing jobs in the past decade - but it's added a net 11.6 million jobs in service and other sectors where average wages are higher than in manufacturing. Most of these new jobs are in better-paying categories, like professional and business services, finance and education and health services.
Critics of trade repeat as a mantra that real wages have been stagnant since the 1970s. But the data on real wages exclude benefits - which have been rising as a share of worker compensation. Those data also rely on a cost-of-living index that has systematically overstated inflation and thus understated real income gains.
The U.S. Bureau of Labor Statistics reports that the average real hourly compensation earned by Americans has actually grown by 22 percent during the past decade - even as trade and other measures of globalization have grown rapidly.
There's more in the article to shine a ray of optimism into the gloominess you might be feeling today as the Dow continues its dispiriting free-fall.
RLC