Trade, technology and jobs

Date posted: May 8, 2013

Many factors affect the job market. But clearly, two important ones are trade and technology. What can be said about the impacts of trade and technology on local labor markets? N.C. State University economist Mike Walden answers.

“Clearly, this has been a big issue in the labor market, probably the biggest issue over the last 30 years.  We have a new study that looked at these impacts over the period 1980 to 2007.

“One of the results of this research, which I think everyone would have expect, is that if you look at communities around the country, those communities that had a big footprint in factories, in producing products with lower-skill, lower-wage workers, they’ve lost out, because a lot of those factories have shut down.

“A lot of those jobs have gone to other countries, because labor costs have been lower. So clearly, the increase in trade has certainly hurt some communities. And we know many of them are here in North Carolina.

“But the other aspect is technology, and you may have thought, well, this is going to adversely affect labor and jobs also. Here, the findings were a little more subtle. The research found that communities that employed new technology — computer technology, information technology, etcetera — they may have lost low-skill routine-based jobs where the computer essentially could take over what the individual is doing. But, those communities made up for those job losses by seeing increases in professional jobs and technical jobs and management jobs.

“So those communities that were impacted by technology actually gained jobs over time. I think what all this research shows is the enormous complexity of our labor market, complexity that I think will continue.”

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