To paraphrase what Paul Krugman wrote about the importance of productivity, the creation of a global market does not change everything, but it changes almost everything. One of its features is segmented production through the global value chains. The reduction of transport costs and technological changes have given way to the production of goods and services composed of components from a multiplicity of countries; Multinational goods of the “Made in the World”.
To fight against Fiscal Heavens requires new supranational institutions, otherwise TNC’s will remain as new World leaders with a power well beyond the one in national’s governments hands.
Carrier, the company President Trump pledged to keep on American soil, informed the state of Indiana this week that it will soon begin cutting 632 workers from an Indianapolis factory. The manufacturing jobs will move to Monterrey, Mexico, where the minimum wage is $3.90 per day.
That was never supposed to happen, according to Trump’s campaign promises. He told Indiana residents at a rally last year there was a “100 percent chance” he would save the jobs at the heating and air-conditioning manufacturer.
It has recently become an article of faith that workers in advanced industrial nations are experiencing almost unprecedented levels of labor-market disruption and insecurity. From taxi drivers being displaced by Uber, to lawyers losing their jobs to artificial intelligence-enabled legal-document review, to robotic automation putting blue-collar manufacturing workers on unemployment, popular opinion is that technology is driving a relentless pace of Schumpeterian “creative destruction,” and we are consequently witnessing an unprecedented level of labor market “churn.” One Silicon Valley gadfly now even predicts that technology will eliminate 80 to 90 percent of U.S. jobs in the next 10 to 15 years.l
The labor market is not experiencing unprecedented technological disruption. In fact, occupational churn in the United States is at a historic low. It is time stop worrying and start accelerating productivity with more technological innovation.