And So It Begins

For decades the growth of international trade has contained a sometimes discussed but rarely embraced threat to American workers: wage competition. Every president and free trader (redundant?) has promised us that our wages would never plummet to the level of our foriegn competitors because the magic U.S. economy would replace all those low-skill, low-pay jobs with sparkling high-tech jobs that we could walk in to straight from community college graduation. Or maybe not.

An analysis of the latest job "gains" come to a disturbing conclusion: even the meager gains in job creation experienced in February produced mostly low-wage openings ($9-$12 per hour) while biggest loses from the Great Recession were in the higher paying jobs ($19 to $31 hourly range).

In the private sector, there is a striking imbalance between where the recession’s job losses occurred, and where the growth of the past 12 months was concentrated:

• Lower-wage industries constituted 23 percent of job loss, but fully 49 percent of recent growth
• Mid-wage industries constituted 36 percent of job loss, and 37 percent of recent growth
• Higher-wage industries constituted 40 percent of job loss, but only 14 percent of recent growth

National Employment Law Project, February 2011

Or as Robert Reich puts it:

For several years now, conservative economists have blamed high unemployment on the purported fact that many Americans have priced themselves out of the global/high-tech jobs market.

So if we want more jobs, they say, we’ll need to take pay and benefit cuts.

And that’s exactly what Americans have been doing.

Of course, with US productivity climbing over the last 30 years but wages stagnant, one might suspect that there is more than international competition going on here.