But not all the economic news is good, and we hear, especially from upward-bound Democratic leaders, about the loss of manufacturing jobs for American workers. This is attributable, of course, to a variety of causes, some entirely bad (lax immigration laws), others good in themselves though with bad side effects (free trade, the decline in the power of the labor unions). The most alluring comparisons would be with Japan and Germany, which have the reputation of carrying their solicitude toward the domestic working classes to extraordinary lengths.
In fact, in the last dozen or so years (1992-2005), U.S. manufacturing jobs have dropped by 20 percent. In Japan and Germany the drop in such jobs is comparable. Alan Reynolds, in his masterly study "Income and Wealth," unpacks some of the assumptions. "Anxiety about deindustrialization or downsizing is usually linked to international trade through catch-words like 'globalization' or 'offshoring,'" Reynolds writes. "The United States is widely imagined to have 'exported jobs' to countries that export more than they import, such as Japan and Germany, even though manufacturing employment declined even more dramatically in those countries where overall job growth has been abysmal."
How to cope with all the thunder about U.S. trade policies? Since Japan and Germany have run chronic trade surpluses for many years, Reynolds notes, statistics showing greater loss of manufacturing jobs in those countries than in the U.S. "contradict all trade-related explanations for the (unproven) belief the United States has long been suffering wage stagnation or increasing wage inequality."
It is illuminating to learn that wage-earners in manufacturing in the United States take in less, sometimes far less, than wage-earners in other spheres. Those who work in utilities take in on average $27 per hour; in education, $17; in manufacturing, $16.
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