Greg's Opinion Greg's big blog of whatnot

15Nov/090

Two Sides of Globalization

» WaPo: Globalization brings a world of hurt to one corner of North Carolina
» WaPo: A rising China is changing the way Americans live overseas and at home

I may be a small minority here, but I think it would have been even better if the Post had done a week-long series of articles such as these, touching on how various parts of the country are impacted positively and negatively by increased trade with Asian countries. As it stands, we end up with two sides of the coin represented, one from the rural midwest and another from the textile-reliant southeast.

In the case of Wisconsin ginseng farmers, there's some positive in that China's growing demand for better quality poses a great opportunity for American exporters. At the end of the day, it's easier to improve quality when you have a better educated workforce. There may be some exceptions out there in the world, but quality improvements over time generally bode well for American companies as long as there's not a large, entrenched incentive to resist change (see the American steel industry for an example or two).

In the case of the North Carolina furniture upholsters, the news may not be as good. In particular, I tend to view the average age of the employee being displaced as something that's difficult to repair. It's one thing to send a 28-yr old kid to job training in the hopes that he'll land another solid career. But what to do with a 48-yr old? The article gives some good insight into the Trade Adjustment Assistance program, with this part jumping out for me:

The GAO analysis from 2000 found that 75 percent of displaced workers in TAA found jobs. Of those, only 56 percent earned 80 percent or more of their previous wage.

In 2002, Congress called for another impact analysis of the program. The report is two years away, a Labor Department spokesman said.

The inattention to the program's effectiveness is evidence, critics say, that its primary purpose is political and that its actual benefits for workers are an afterthought.

That definitely sounds like a situation that could stand to improve, regardless of your views on free trade.

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