Us Labor's Plight in the Global Economy

17 Pages Posted: 27 Feb 2018 Last revised: 9 Apr 2018

See all articles by Peter Marcel Debaere

Peter Marcel Debaere

University of Virginia - Darden School of Business; Centre for Economic Policy Research (CEPR)

Abstract

US employment in manufacturing has been steadily declining since the 1980s. In the wake of the surprise election in November 2016 of Donald J. Trump, who received strong blue-collar support in rust-belt states, there was growing urgency to understand the plight of manufacturing. The first half of this case explores recent research on labor-market polarization, the return to education, and the local impacts of globalization, in particular the increased trade between China and the United States. The second half summarizes Amy Goldstein's Janesville: An American Story, a narrative about the social impact of the closure of the Janesville, Wisconsin, GM assembly plant. The central question becomes whether the case for trade liberalization is eroding, and whether the wave of ever more globalization is coming to an end. This case is used at Darden in the second-year elective, "Managing International Trade and Investment." It would also be suitable in courses covering globalization, labor markets, or international trade.

Excerpt

UVA-GEM-0155

Rev. Apr. 2, 2018

US Labor's Plight in the Global Economy

When Angus Deaton won the Nobel Prize in Economics in 2015, some of his work with Anne Case on mortality received more attention. It was well known that mortality rates had been decreasing in France, Germany, the United Kingdom, Canada, Australia, and Sweden. The data for the United States, however, showed a unique turnaround between 1999 and 2013. Reversing decades of progress in mortality reduction, mortality among white non-Hispanics between 45 and 54 years old showed an increase for the first time since 1999. Mortality for all other ethnicities, and for older categories, continued to show declines (see Exhibits1 and 2). Case and Deaton traced the abnormal increase in white midlife mortality especially to suicides and drug overdoses, as well as worsening health conditions. As whites were disproportionately employed in manufacturing, economists began to examine possible links between this heightened mortality and the shrinking manufacturing sector.

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Keywords: labor market, globalization, economic history, manufacturing, American labor market, income inequality, skilled labor, skilled worker, auto industry, free trade, anti-free trade, Janesville, oil crisis, GM Gypsies

Suggested Citation

Debaere, Peter Marcel, Us Labor's Plight in the Global Economy. Darden Case No. UVA-GEM-0155, Available at SSRN: https://ssrn.com/abstract=3130384

Peter Marcel Debaere (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://www.darden.virginia.edu/html/direc_detail.aspx?styleid=2&id=5794

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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