Globalization and the Perceptions of American Workers

A number of recent events in the United States attest to a "globalization backlash" in opposition to continued liberalization of trade, foreign direct investment, and immigration. This backlash has been commonly characterized as reflecting the interests of small groups whose diverse agendas have very little connection, if any, to the economic consequences of policy liberalization.The authors of this book argue that this characterization is wrong. The backlash reflects widespread skepticism among US citizens about globalization, and these perceptions seem to be closely connected to the labor-market pressures that globalization may be imparting on US workers.

The empirical case for the book's argument is based on three key findings. First, a wide range of public opinion surveys indicates that US citizens recognize both the costs and benefits of integration with the world economy, but they tend to weigh the costs more than the benefits. Second, these policy preferences cut most strongly across labor-market skills. Less-skilled workers are much more likely to oppose freer trade and immigration than their more-skilled counterparts. Third, this skills-preferences gap may reflect very different wage-growth levels across skill groups in the US labor market since the early 1970s. Less-skilled US workers―a group that still constitutes the majority of the US labor force―have had close to zero or even negative real wage growth and have also seen sharp declines in their wages relative to more-skilled workers.While concerns about the impact of globalization on the environment, human rights, and other issues are an important part of the politics of globalization, it is the link between policy liberalization, worker interests, and individual opinions that forms the foundation for the backlash against liberalization in the United States.

Kenneth Scheve is Professor of Political Science at Stanford University and a Senior Fellow at Stanford's Freeman Spogli Institute. He currently serves as the Director of The Europe Center at FSI. His research interests are in the fields of international and comparative political economy and comparative political behavior with particular interest in the behavioral foundations of the politics of economic policymaking.

Matthew J. Slaughter is the Paul Danos Dean and the Earl C. Daum 1924 Professor of International Business at the Tuck School of Business at Dartmouth College. He is also the founding Faculty Director of Tuck's Center for Global Business and Government. In addition, he is currently a Research Associate at the National Bureau of Economic Research; an adjunct Senior Fellow at the Council on Foreign Relations; a member of the advisory committee of the Export-Import Bank of the United States, a member of the academic advisory board of the International Tax Policy Forum; and an academic advisor to the McKinsey Global Institute.