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Are globalization, trade and technology hurting America's middle class?

Published: Wednesday, Sept. 2 2015 1:39 p.m. MDT

A member of the A member of the "Korean Alliance against KorUS FTA" protest group demonstrates in downtown Seattle in this Wednesday, Sept. 6, 2006 file photo, in protest against free-trade talks between the U.S. and South Korea. (Ted S. Warren, Associated Press)

A report published in the Huffington Post Tuesday cites the winners and losers of globalization, and the American middle class doesn’t fare too well.

The study, written by Branko Milanovic, a professor of economics at Johns Hopkins University and the lead economist of the World Bank’s Research Department, shows that people at median income levels around the world have doubled their real incomes, but “nine out of 10 such ‘winners’ were from the ‘resurgent Asia.’”

Milanovic asked if there’s an association between the gains in global incomes around the world and the stagnation seen in America, and theorizes that there is a ‘global middle class’ forming.

“The formation of a global middle class, or the already perceptible 'homogenization' of the global top 1 percent, regardless of the country where they come from, may be both deemed good for world stability and interdependency,” Milanovic wrote, “and socially bad for individual countries as the rich get 'delinked' from their co-citizens.”

Similarly, a CNN Money article Friday echoes the same sentiments. It claims that the manufacturing revival that President Barack Obama spoke in depth about during his 2012 State of the Union address was a "mirage."

“With automation playing a larger role, and many jobs remaining in cheaper overseas markets ... the story of a manufacturing revival is ‘overwhelmingly imaginary,’” as quoted in the article by research fellow with the U.S. Business and Industry Council Alan Tonelson.

Global trade does not seem to be helping the American middle class either. The Economic Policy Institute estimates that since the signing of a free trade agreement with South Korea in 2011 the U.S. has lost 40,000 jobs instead of the 70,000 jobs the Obama administration claimed it would maintain.

Correspondingly, technology coupled with cheap labor from emerging markets is shrinking our workforce, according to an Aug. 13, 2013, Atlantic article by Derek Thompson.

“Globalization (in particular, increased trade with China) has opened the doors to more consumers and more cheap workers while labor-saving technology has created more efficient ways to serve those consumers,” said Thompson. “As a result, the businesses are bigger, but the workers' share is getting smaller ... That’s what doing more with less looks like.”

Whether it is globalization, trade, technology, or a combination of all three, these studies suggest that the U.S. needs to find new solutions to compete in a global marketplace.

Erik Raymond is experienced in national and international politics. He relocated from the Middle East where he was working on his second novel. He produces content for DeseretNews.com. You can reach him at: eraymond@deseretdigital.com or @RaymondErik

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