Job export discussion

Last evening while cooking dinner I surfed TV channels and came across a C-SPAN press conference at the Brookings Institute about an editorial piece published in the Intl. Herald Tribune on 1/7 by NY Senator Charles Schumer and Charles Roberts, a former Treasury undersecretary in the Regan administration. As my chops sizzled they discussed the piece titled “Exporting jobs is not free trade.” Also in the discussion was another Brookings economist and Thomas Donahue, the CEO of the US Chamber of Commerce. I say this to establish that, while Schumer is a Democrat, this wasn’t exactly a nest of anti-Capitalist activists.

I’m not going to go over the issues because I’ve posted a lot of stuff related to it and commented on it before. In fact, here’s a link to the op-ed piece and the entire broadcast is at c-span.com under “Brookings Discussion of US Trade Policy.” A summary of the discussion is also at Brookings. It’s good to see good, broad thinking about this. Nobody framed it as an issue of Silicon Valley IT-types who are having a tough time getting a job. They all agreed there is a fundamental change in economic conditions and dynamics taking place. There were a few interesting points:

1. The idea that behind “free trade” is that different countries have different natural strengths and the basis of those strengths can’t be easily moved. But now, when capital, information and skills move around instantly, this premise is no longer beyond question.
2. A lot of the job loss in the US recently is from productivity gains (a.k.a., automation, computer tools). The “challenge” is not just outsourcing but the advance of automation replacing jobs. (The word “challenge” must have been used 50 times during the discussion.)
3. College kids are more aware that the basic game has changed than those over 30. They see the articles about jobs going overseas, and they can’t figure out what to study. It looks pointless to study engineering when there are so many in China. In fact, those in US engineering schools are already immigrants from India and China. So it’s not clear that education is the answer to getting a good job.
4. The jobs created in the last few months of the “recovery” are not high up the value chain. The high value jobs may appear overseas as much as here.
5. You better watch out what you ask for; you just might get it. The CEO of the US Chamber of Commerce said we are faced with dealing with the results of what we’ve told other countries to do for decades.