Cause and What-Can-Effect
This unsigned editorial in the Providence Journal makes a reasonable case:
Much of the debate about unemployment assiduously avoids the basic causes of long-term joblessness and falling wages.
One is globalization. Large U.S. companies, aided by modern telecommunications and fast transportation, find it increasingly easy to move jobs abroad, where the wages tend to be much lower than they are (or were!) in the U.S. This produces a race to the bottom that drags down U.S. wages and employment.
The writer goes on to note some of the contributing factors, as well as a couple positives to the trend: higher investment yields and improved living conditions for the benefiting countries. But what he or she fails to address is the differing degrees to which government can affect the issues that come into play.
People in poorer countries will work for less. That’s a fact. Technology has lowered barriers to overseas production. Another fact. China is playing protectionist games. All of these can be addressed in different ways, but all methods are likely to be slow and risky.
What our domestic government can do is to ease the burdens that it places upon our own economy. That’s politically difficult, of course, not only because it requires government to give up some of its reach and authority, but also because it will force powerful constituencies — on both sides of every issue — to make adjustments to evolving reality. But there is no other option that doesn’t turn our “race to the bottom” into a race to authoritarianism.