《ch 6 draft is trade a ripoff for american workers》.pdf

Chap ter 6: Is Free Trade a Rip -off f or American Workers ? Draft: Feb 2, 2009 6.1. The Charg es. Consider the following three facts on the experience of US workers, which are often used as a bill of indictment against globalization. FA CT 1. Desp ite sharp ly rising p roductivity p er head – and unlike what has happ ened in the p ast – real wag es and real comp ensation have stag natedf or the last thirty y ears. Historically, US wages have approximately kept pace with labor productivity, allowing for steady increases in living standards for workers generation after generation. However, for some reason this process appears to have become stuck sometime after the 1970’s. Figure 6.1 illustrates this by plotting real hourly compensation for US An American steel worker in workers against real output per worker over several decades Pittsburgh, PA . The US steel (figures from the Economic Rep ort of the President 2006, industry has been battered by intense f oreign comp etition f or a Table B-49). ‘Compensation’ includes not only wages and quarter century. Photo by Ly nn Johnnon, National Geograp hic. Draft © 2009 by John McLaren. 2 Is Free Trade a Rip -off f or American Workers? salaries but also employer contributions to pensions and health care premia. Notice that up to the 1970’s the two plots are parallel, but after that compensation slo