Free Trader Paul Krugman Admits Failure of Globalization for American Workers: ‘Major Mistake’
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Economist Paul Krugman, the longtime defender of global free trade and a member of the failed “Never Trump” movement, now admits that globalization has failed American workers.
In a column for Bloomberg titled “What Economists (Including Me) Got Wrong About Globalization,” Krugman admits that the economic consensus for free trade that has prevailed for decades has failed to recognize how globalization has skyrocketed inequality for America’s working and middle class workers.
Krugman writes:
In the past few years, however, worries about globalization have shot back to the top of the agenda, partly due to new research and partly due to the political shocks of Brexit and U.S. President Donald Trump. And as one of the people who helped shape the 1990s consensus — that the contribution of rising trade to rising inequality was real but modest — it seems appropriate for me to ask now what we missed. [Emphasis added]…The pro-globalization consensus of the 1990s, which concluded that trade contributed little to rising inequality, relied on models that asked how the growth of trade had affected the incomes of broad classes of workers, such as those who didn’t go to college. It’s possible, and probably even correct, to think of these models as accurate in the long run. Consensus economists didn’t turn much to analytic methods that focus on workers in particular industries and communities, which would have given a better picture of short-run trends. This was, I now believe, a major mistake — one in which I shared a hand. [Emphasis added]
Krugman, though, writes that he and his fellow free trade economists “had no way to know” that globalization of the American economy or a surge in trade deficits “were going to happen,” though the anti-globalization movement had warned for years of the harmful impact free trade would have on U.S. workers — including Donald Trump.
In an interview with SiriusXM Patriot’s Breitbart News Tonight, economist Alan Tonelson said that Krugman’s acknowledging that he and the free trade economic consensus has been wrong is “better later than never,” but “the damage has already been done.”
LISTEN:
“There’s been an even more startling, in fact jaw-dropping, development on that front. Paul Krugman, the famous Never Trumper, the famous pro-free trade economist, the Nobel Prize winner just published an article … saying that for the past 20 years, he and his other globalist, free trade economist friends have been substantially wrong about the effect of globalization, particularly more trade with low income, low wage countries like China,” Tonelson said.
“They’ve been substantially wrong about its effects on the American economy and American workers in particular,” Tonelson said.
Meanwhile, decades of free trade have spurred mass layoffs, unemployment, and offshoring of high-paying American jobs while surging trade deficits. Since China entered the World Trade Organization (WTO), the U.S. trade deficit with China has eliminated at least 3.5 million American jobs from the American economy. Millions of American workers in all 50 states have been displaced from their jobs, which have been lost due to U.S.-China trade relations.
John Binder is a reporter for Breitbart News. Follow him on Twitter at @JxhnBinder.
Report:
California’s Middle-Class Wages Rise by 1 Percent in 40 Years
Middle-class wages in
progressive California have risen by 1 percent in the last 40 years, says a
study by the establishment California Budget and Policy Center.
The wage and housing problems are made worse —
especially for families — by the loss of
employment benefits as companies and investors spike stock prices by cutting
costs. The report says:
NYT Admits Fewer Immigrants Means Higher Wages, More Labor-Saving
Machines
OPEN BORDERS: IT’S ALL ABOUT KEEPING WAGES
DEPRESSED!
"In the decade following the
financial crisis of 2007-2008, the capitalist class has delivered powerful
blows to the social position of the working class. As a result, the working class
in the US, the world’s “richest country,” faces levels of economic hardship not
seen since the 1930s."
"Inequality has reached unprecedented
levels: the wealth of America’s three richest people now equals the net
worth of the poorest half of the US population."
Report:
California’s Middle-Class Wages Rise by 1 Percent in 40 Years
Justin
Sullivan/Getty Images
3 Sep 2019172
6:24
Middle-class wages in
progressive California have risen by 1 percent in the last 40 years, says a
study by the establishment California Budget and Policy Center.
“Earnings for California’s
workers at the low end and middle of the wage scale have generally declined or
stagnated for decades,” says the report, titled “California’s Workers Are
Increasingly Locked Out of the State’s Prosperity.” The report continued:
In
2018, the median hourly earnings for workers ages 25 to 64 was $21.79, just 1%
higher than in 1979, after adjusting for inflation ($21.50, in 2018 dollars)
(Figure 1). Inflation-adjusted hourly earnings for low-wage workers, those at
the 10th percentile, increased only slightly more, by 4%, from $10.71 in
1979 to $11.12 in 2018.
The report admits that the
state’s progressive economy is delivering more to investors and less to wage-earners.
“Since 2001, the share of state private-sector [annual new income] that has
gone to worker compensation has fallen by 5.6 percentage points — from 52.9% to
47.3%.”
In 2016, California’s Gross
Domestic Product was $2.6 trillion, so the 5.6 percent drop shifted $146
billion away from wages. That is roughly $3,625 per person in 2016.
The report notes that wages
finally exceeded 1979 levels around 2017, and it splits the credit between the
Democrats’ minimum-wage boosts and President Donald Trump’s go-go economy.
The 40 years of flat wages are
partly hidden by a wave of new products and services. They include almost-free
entertainment and information on the Internet, cheap imported coffee in
supermarkets, and reliable, low-pollution autos in garages.
But the impact of California’s
flat wages is made worse by California’s rising housing costs, the report says,
even though it also ignores the rent-spiking impact of the establishment’s
pro-immigration policies:
In just the last decade
alone, the increase in the typical household’s rent far outpaced the rise in
the typical full-time worker’s annual earnings, suggesting that working
families and individuals are finding it increasingly difficult to make ends
meet. In fact, the basic cost of living in many parts of the state is more
than many single individuals or families can expect to earn, even if all adults
are working full-time.
…
Specifically, inflation-adjusted
median household rent rose by 16% between 2006 and 2017, while
inflation-adjusted median annual earnings for individuals working at least 35
hours per week and 50 weeks per year rose by just 2%, according to a Budget
Center analysis of US Census Bureau, American Community Survey data.
Many workers are being paid
little more today than workers were in 1979 even as worker productivity has
risen. Fewer employees have access to retirement plans sponsored by their
employers, leaving individual workers on their own to stretch limited dollars
and resources to plan how they’ll spend their later years affording the high
cost of living and health care in California. And as union representation has
declined, most workers today cannot negotiate collectively for better working
conditions, higher pay, and benefits, such as retirement and health care, like
their parents and grandparents did. On top of all this, workers who take on
contingent and independent work (often referred to as “gig work”), which in
many cases appears to be motivated by the need to supplement their primary job
or fill gaps in their employment, are rarely granted the same rights and legal
protections as traditional employees.
The center’s report tries to
blame the four-decade stretch of flat wages on the declining clout of unions.
But unions’ decline was impacted by the bipartisan elites’ policy of
mass-migration and imposed diversity.
In
2018, Breitbart reported how Progressives for
Immigration Reform interviewed Blaine Taylor, a union carpenter, about the
economic impact of migration:
TAYLOR: If I hired a framer to do
a small addition [in 1988], his wage would have been $45 an hour. That was
the minimum for a framing contractor, a good carpenter. For a helper, it was
about $25 an hour, for a master who could run a complete job, it was about $45
an hour. That was the going wage for plumbers as well. His helpers typically
got $25 an hour.
…
Now, the average wage in Los
Angeles for construction workers is less than $11 an hour. They can’t go lower
than the minimum wage. And much of that, if they’re not being paid by the hour
at less than $11 an hour, they’re being paid per piece — per piece of plywood
that’s installed, per piece of drywall that’s installed. Now, the subcontractor
can circumvent paying them as an hourly wage and are now being paid by 1099,
which means that no taxes are being taken out. [Emphasis added]
Diversity
also damaged the unions by shredding California’s civic solidarity. In 2007,
the progressive Southern Poverty Law Center posted a report with the title
“Latino Gang Members in Southern California are Terrorizing and Killing
Blacks.” In the same year, an op-ed in the Los Angeles Times described another murder by Latino
gangs as “a manifestation of an increasingly common trend: Latino ethnic
cleansing of African Americans from multiracial neighborhoods.”
The center’s board members
include the executive director of the state’s SEIU union, a professor from the
Goldman School of Public Policy at the University of California, Berkeley, and
the research director at the “Program for Environmental and Regional Equity” at
the University of Southern California, Los Angeles.
Outside
California, President Donald Trump’s low-immigration policies are pressuring
employers to raise Americans’ wages in a hot economy. The Wall Street Journal reportedAugust 29:
Overall, median weekly earnings
rose 5% from the fourth quarter of 2017 to the same quarter in 2018, according
to the Bureau of Labor Statistics. For workers between the ages of 25 and 34,
that increase was 7.6%.
The New York Times laments that reduced immigration does force wages
upwards and also does force companies to buy labor-saving, wage-boosting
machinery. Instead, NYT prioritizes "ideas about America’s identity and
culture.” http://bit.ly/2Zp2u2J
NYT Admits Fewer Immigrants Means Higher Wages, More Labor-Saving
Machines
.
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