Wednesday, April 26, 2017

Globalization Versus De-Industrialization As Populist Issues In The UK.

Globalization has been frequently cited as one of the major causes of unemployment.  It has also been used as one of the major factors in the Brexit vote in the UK.  This study argues that deindustrialization in the UK began in the 1950's ,well before the apex of globalization.  It shows that industrial output in several manufacturing industries has not substantially declined.  However,  the number of workers needed to produce the output has declined dramatically.  The loss of manufacturing jobs is primarily the result of productivity growth in manufacturing.  That is even true in Germany which has a trade surplus in manufactured products.  It takes fewer workers to manufacture the indstrial output in Germany.

The major problem with the loss of manufacturing jobs is that low skilled workers were paid well compared  to the wages available to low skilled workers in  many of the service industries such as retail.  High skill workers in many service industries have done very well.  This does not mean that high wage manufacturing jobs have not been lost to lower wage locations.  It argues that productivity growth and new technologies have been a major factor in deindustrialization and the subsequent shift that we have seen in the labor market.

No comments:

Post a Comment