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Should We Invest in Retraining American Workers Affected by Globalization?

Question: Paul, with all the concern about stagnant or declining wages in the U.S., has anyone pointed out that wages in other parts of the world are rising? Is there no joy for them? Isn’t the relevant question in a globalized economy whether or not the average compensation worldwide is rising?

That is not to dismiss the difficulty of U.S. workers who have been affected by this globalized competition. We need to help affected workers get retrained and relocate to areas that need new workers with new skills (without loosing their retirement or healthcare). Isn’t this a better alternative than foreign aid?

Paul Solman: Which areas would you suggest relocating TO? And what happens if those areas suddenly dry up for a few years or more? Besides, haven’t the unemployed always moved to areas with better prospects? Think “Grapes of Wrath.” Or “Moving Millions: How Coyote Capitalism Fuels Global Immigration,” the new book by Jeffrey Kaye, the NewsHour correspondent whose excellent reports enhanced the program for the past quarter-century and sometimes made at least one of his fellow correspondents envious. (Jeff Brown recently interviewed Kaye on the NewsHour).

As to worker retraining, I can remember a response to that idea from a guy at the General Dynamics Electric Boat shipyard in Groton, Conn., 20 years ago.
“Retrain me for WHAT?” he asked.

And let’s recall a statistic we’ve occasionally trotted out on this page: Princeton economist Alan Krueger’s study of job creation that found close to HALF the job growth from 1960 through 2003 was in occupation categories that did not even EXIST in 1960. In other words, it’s hard to pick the jobs of the future.

The connection of all this to foreign aid eludes me. We could help American workers by all sorts of other means, could we not? More borrowing, higher taxes, lower expenditures on any number of things? Foreign aid may or may not be money well spent (see a debate we ran in 2006). But I can’t see that it has much to do with whether or not we want to spend more public money on retraining and relocation.

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