In the hot lather of an unusually rambunctious presidential political campaign, more than a little nonsense is being slung about by the rival candidates about ending the current lethargy of the U.S. economy.
First of all, of course, the world’s job market is not a finite number.
When the international economy is robust, it is so intertwined that creation of jobs in one national economy is bound to produce them among their trading partners. That’s why it is wrong to talk of the Chinese and other low priced labor having “stolen” American jobs.
True, China is running a huge trade surplus with the U.S. In 2015, Beijing’s export surplus to the U.S. over American goods to China was a record $365.7 billion. But beyond the statistical review lies a basic consideration for both countries’ economists and officials: China is accepting a debt of an increasingly devalued U.S. currency for its labor and its own resources and imported raw materials sold to the U.S.
One could, indeed, make the argument that while subsidizing its exports and manipulating the currencies, Beijing may be “stealing” foreign employment, But it is also – an essentially poor country – exporting capital. Few of those who are blathering about the current American economic scene are remarking on the low=cost consumers’ goods that these Chinese policies have produced for the American consumer.
The campaign promise made by both candidates to “return” jobs from China and other low wage producers, is equally subject to criticism. If, as is generally assumed, this would be done by erecting tariff barriers against these imports, it would mean higher prices [and presumably less consumption] by the U.S. consumer. That could produce additional revenues for the federal government, of course – indeed, the main source of revenue for the American government before the enactment of the 1913 Sixteenth Amendment to the U.S. constitution permitting a direct tax which did not – as the Constitution requires, a per capita distribution among the States.
But what may be far more important is speculation about what these “jobs” would actuallybne were they “returned” to the U.S. Given the incredible speed with which the digital revolution has revolutionized all phases of American life, including manufacturing and services, it seems likely that any “return” would produce quite different employment than that which departed. Increasingly, perhaps more than the “escape” of jobs abroad,, American unemployment is produced through the introduction of these advanced technologies/ What ever happened to “dispatches” for delivery networks or to the old-fashioned highly trained “cashier” at the retail checkout?
What often seems the logical solution to this problem is the reeducation and retraining of workers for new and different, and usally enhanced, jobs. Enormous sums have been devoted over decades to the problem of reeducating.
But over the decades enormous sums have been expended with out great effect by both the various levels of government and by private employers. Most studies show that displaced factory workers in the United States on the average have lower wages after retraining to other positions This si also true for tiaison jobs which develop from the offshore “escape” of American industry.
These rehabilitation programs have built in handicaps. Often the worker who is to be retrained is in mid-career, older and less amenable to retraining than a young person just entering the workforce. It also presents a difficult problem due to the individual personality of some workers. Researchers estimate that under the best conditions one expensive academic year of such retraining at a community college increases the long-term earnings by about 8%t for older males and by about 10 percent for older females. But in an age of increasing technological tools, that problem appears to be magnified in any future attempt to find employment for these workers.
Rather than talk in terms of “bringing back: jobs which have been outsourced overseas, the politicians – and their economists – had best be working on the expansion of the economy with new more sophisticated jobs and careers, both for the unemployed and those new entries into the workforce.