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When (and Where) Work Disappears

Outsourced manufacturing wipes out one-third of per-capita gains realized by trade with China

MIT News
Wed, 02/29/2012 - 10:35
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The loss of U.S. manufacturing jobs is a topic that can provoke heated arguments about globalization. But what do the cold, hard numbers reveal? How has the rise in foreign manufacturing competition actually affected the U.S. economy and its workers?

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A new study co-authored by David Autor, professor and associate head of MIT’s Department of Economics, shows that the rapid rise in low-wage manufacturing industries overseas has indeed had a significant impact on the United States. The disappearance of U.S. manufacturing jobs frequently leaves former manufacturing workers unemployed for years, if not permanently, while creating a drag on local economies and raising the amount of taxpayer-borne social insurance necessary to keep workers and their families afloat.

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Comments

Submitted by Bill Sproat on Thu, 03/08/2012 - 14:26

MIT outsmarted by economist Williams

"The U.S. Census Bureau reports that 2011 manufacturing output grew by 11 percent, to nearly $5 trillion...

...In 1790, 90 percent of Americans did agricultural work. Agriculture is now in 'shambles' because only 2 percent of Americans have farm jobs. In 1970, the telecommunications industry employed 421,000 well-paid switchboard operators. Today 'disaster' has hit the telecommunications industry, because there are fewer than 20,000 operators. That's a 95 percent job loss...

...For the most part, rising worker productivity and advances in technology are the primary causes of reduced employment and higher output in the manufacturing, agriculture and telecommunications industries...

...The bottom line is that the health of an industry is measured by its output, not by the number of people it employs."

- Walter E. Williams

So, does Walter Williams have it right or does MIT's David Autor?

Autor then describes the solution as more government programs paid for by those who are still working (the producers). Once again, acedemia proposes another socialist approach to a "problem" that occurs repeatedly throughout history.

No thanks, Mr. Autor. I prefer to let the free market work it out - as it has always done.

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