Can Globalization Be Saved?
SSGA's economic and policy experts find that the data for the US tell a different story from the popular globalization narrative, however. Technology disruption in the form of automation has accounted for far more job losses than trade since 2000; reopening factories in the US is likely to employ more robots than humans. Similarly, our experts point to studies showing that globalization has had only a modest effect on wages in the US. So rather than pulling up the drawbridge against globalization, the US might be better served, we argue, by retraining and redistribution policies that help cushion the disruptions caused by the new realities of technology and preserve the growth benefits of free and open global markets.
- Overall, technology rather than trade has caused far more manufacturing job losses in the US since 2000
- There is little evidence that globalization in terms of trade, capital mobility and foreign direct investment has any significant effect on wages
- Education differences play a bigger role than trade in income disparities between skilled and unskilled US workers
- Globalization and technological change remain key to boosting US productivity, growth and living standards
- Better retraining and redistribution policies are needed to preserve the benefits of globalization while mitigating the individual costs