Change has been the dominant theme of this presidential campaign. Barack Obama’s mantra has proved extremely popular among voters, so much so that other candidates in both parties have signed on.
The change they’ve embraced is political change. When it comes to economic change, enthusiasm is decidedly more muted. Many Americans would be happy with a change in our economic policies. But the notion that we should get used to — and perhaps even welcome — continuous, regular economic change is a tougher sell. This is particularly evident with respect to globalization. To many, change isn’t terribly appealing if it refers to more imports and outsourcing. For them this type of change equals disappearing jobs and smaller paychecks.
Globalization — much like technological advance, another key form of economic change — clearly does result in job loss and falling real wages for some Americans. Researchers disagree about the magnitude of the damage (see here). Some say it is tiny; others view it as small but growing; others conclude it is already large.
Yet on the whole economic globalization is a good thing. We benefit as consumers by having greater choice and paying lower prices. Citizens in other countries, especially poor ones, benefit from greater access to jobs and rising wages. The latter is beneficial not just on altruistic grounds. It is in Americans’ self-interest for poor countries to get richer. As countries develop economically they are more likely to become democratic, and to stay democratic. And democratic countries are less likely to attack one another. Also, as citizens in poor nations become richer they will be able to buy more goods and services produced here.
Yes, there are exceptions. But in the aggregate the advantages of globalization for Americans outweigh the costs. That, rather than because they are acting at the behest of corporate lobbyists, is the main reason why many Democrats are favorably disposed toward globalization.
Too often, though, they don’t talk that way. Especially when campaigning in states like Ohio, where large numbers of residents have lost a job in recent years or fear that may happen soon, Democratic candidates tend to say less about the benefits of economic change and more about the shortcomings of trade agreements such as NAFTA.
This is understandable as an election tactic. And on one view, it is largely innocuous. David Leonhardt of the New York Times aptly likens Democrats’ orientation toward globalization to the way many Republicans approach abortion: strong oppositional rhetoric during the campaign primaries, but little action once in office. If political leaders campaign against globalization but their later policy choices tend not to impede it, why worry?
The reason is that if leading Democrats instead were to advocate that we embrace economic change, they could stimulate a thorough discussion about, and likely generate greater public support for, policies that compensate for the adverse consequences of that change.
Most Americans who worry about globalization are not dead set against economic change. They just want government to do something to help. And government can do something. It can broaden eligibility for unemployment insurance. It can make benefits like pensions and health insurance more portable. It can help offset the cost of retraining and relocation. It can assist with job placement. It can offer wage insurance to limit income loss if getting a new job entails a pay cut. It can invest in infrastructure improvement to help rebuild hard-hit communities. It can gradually increase the minimum wage and the Earned Income Tax Credit. (More discussion here, here, here, and here.)
None of these policies would be inordinately expensive. None would require massive interference with markets. Each has considerable merit in its own right. And each would help to make globalization, technological advance, and other forms of economic change win-win.
But for this type of policy approach to make real headway in our political debate, we need our most visible political leaders to encourage us to embrace change.