Start the conversation
From Staff Reports
Though millions of U.S. workers lose their jobs every month, foreign competition is way down on the list of causes. But U.S. politicians routinely spotlight foreign competition as the key culprit, ignoring some of the real reasons American firms routinely cut back on their work forces – including mismanagement, efficiencies created by new technologies, and corporate restructurings driven by profit pressures from Wall Street, according to an Op-Ed column that appeared this week in the English-language ShanghaiDaily.com.
At a time when China has amassed foreign reserves of $1.3 trillion and counting, and that country and the United States are sparring over such issues as exchange rates, trade deficits, product quality and subsidies, the ShanghaiDaily report contends that the United States has taken an economic issue and made it into a political one to divert attention from its own shortcomings and to justify its actions in the marketplace. For instance, according to the report, the U.S. Trade Adjustment Assistance program, or TAA, expires at the end of next month, and some members of Congress want to extend its length, and broaden its scope – making service-industry workers eligible for assistance.
But the newspaper questions why workers who lose their jobs because of foreign competition are any more deserving of assistance than workers who lose their jobs for other reasons. To illustrate this point, the China daily points to some July 23 comments by Harvard University economist N. Gregory Mankiw, a former chairman of President George W. Bush's Council of Economic Advisors. Mankiw, on his own website, asked if it's really reasonable to assess blame for a job loss: "Can you really tell whether a worker is losing his job due to trade or due to other forces, such as technological change?" Mankiw asked. And "is a worker who loses a job due to trade deserving of a more generous safety net than a worker who loses his job due to other forces, such as technological change?"
In both cases, the answer should be "no," the newspaper report states.
Free trade is supposed to be an objective that contributes to the greater good of a nation's economy. But, in the short-run, that means some workers will lose their jobs, the newspaper report states. And perhaps China – with its super-fast growth – is right now just the easiest target to blame.