Fail or Flourish: American Workers, Globalization, and Automation

Abstract

It is often asserted that, for most American workers, real wages and incomes have been “stagnant” for decades, but evidence shows that the large majority of US workers are better off today than in past decades. Increased trade, globalization, and technological innovation have helped to raise wages and incomes. US economic policy should not aim to regulate or slow a dynamic labor market, but instead to help the minority of American workers who have been displaced or more permanently disconnected from the labor force. Policy initiatives should focus on upgrading the skills of US workers, promoting mobility, eliminating government-created barriers to employment and disincentives to work, reducing addiction and unnecessary incarcerations, and other policy reforms—with the goal of equipping US workers to thrive in a more open and technologically advanced economy.