The Dark Side of Globalization: Why Seattle's 1999 Protesters Were Right [View all]

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http://www.theatlantic.com/business/archive/2014/01/the-dark-side-of-globalization-why-seattles-1999-protesters-were-right/282831/



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The Dark Side of Globalization
The clearest example is competition from foreign workers, which really has slammed the American working class. Economists David Autor, David Dorn, and Gordon Hanson did very careful empirical work and found that competition from China lowered wages and increased unemployment for American workers who were in competition with Chinese imports. Economists Michael Elsby, Bart Hobijn, and Aysegul Sahin found that competition from developing countries—not the decline of unions or the rise of automation—has been responsible for the bulk of the recent decline in labor’s share of income in the United States.

Chinese imports have lowered prices for consumers and raised the income of capital owners, but those benefits are either spread very thinly over a large number of people, or concentrated among the rich. The American workers who have been hurt by globalization have been hurt very badly, and America has no system in place to compensate them for that loss. China’s accession to the WTO in 2000, following the 1999 meeting, accelerated its rise as an export powerhouse.

Next, take unsafe imports. The scary truth is that we don’t even really know how much of a problem this is. But here’s what we do know: Food imports from China have skyrocketed, and the FDA has had trouble keeping up with the swarm of possible dangers. Although the U.S. and China have worked to improve safety standards for imported toys, Chinese toys still contain large amounts of heavy metals, including lead. If childhood-lead exposure really does lead to violent crime, it suggests Seattle protesters warned us of a considerable danger.

How about environmental destruction? The “race to the bottom” theory is that by allowing rich-country companies to invest freely in countries that don’t protect the environment, globalization forces rich countries to lower their environmental standards as well. That theory doesn’t seem to have a lot of support in the data; economists have generally found little effect of globalization on pollution in the U.S. itself. But globalization does seem to export pollution to developing countries. For many types of pollution, the burden falls on our trade partners: Chinese people are literally choking to death by coal smoke, much of which is burned by heavy industry that's expanded since 1999.