To the Editor:
“More Jobs, but Not for Everyone” notes that many economists failed to anticipate the hit to middle-class wages and employment that accompanied globalization. However, not every economist ignored what the economic theory actually says. After all, economics always showed that non-college-educated workers would lose out on trade as output shifted to more capital-intensive and skill-intensive goods.
The title of my colleague Josh Bivens’s book says it all: “Everybody Wins, Except for Most of Us: What Economics Teaches About Globalization.” Unfortunately, this reality was inconvenient for the pundits and business class that pushed for trade deals, so it was ignored.
Moreover, this same group favored policies that undercut wages—using monetary policy to limit wage growth, and opposing minimum wage increases and strong labor unions—exacerbating our problems. Only now, as the effects of globalization are being made clear politically, are people coming around to what some economists have known all along.
LAWRENCE MISHEL
President
Economic Policy Institute
Washington
Note from KBJ: Question: What have I been saying in this blog for a decade or more? Answer: "Free trade has been a disaster for this country." It's gratifying that smart people are beginning to realize it.
