"China, technology and the U.S. middle class" by Chrystia Freeland at Reuters

[applegrove]

China, technology and the U.S. middle class

by Chrystia Freeland at Reuters

http://blogs.reuters.com/chrystia-freeland/2013/02/15/china-technology-and-the-u-s-middle-class/

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Those forces are technological change and trade. The easy assumption is that the two go together. After all, trade needs technology — it is hard to imagine outsourcing without the Internet, sophisticated logistics systems and jet travel. Technology is dependent on trade, too: The opportunity for global scale is one reason technological innovation has yielded such outsize rewards.

But in a careful study of local labor markets in the United States, Autor, Dorn and Hanson have found that trade and technology had very different consequences for jobs.

“We were surprised at how distinct the two were,” Autor said. “We found that the trade shock had a very measurable impact on the employment rate. Technology led to job polarization, but its employment effect was minimal.” Trade, at least in the short term, really did ship jobs overseas. Technology did not kill jobs per se, but it did hollow out those essential jobs in the middle.

The big surprise, at least for believers (like me) in the classic liberal economic view that trade benefits both parties, is the strong and negative impact of globalization on U.S. workers — Autor estimates it accounts for 15 to 20 percent of jobs lost.

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