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The Impact of Globalization on American Jobs

Pete Carlson and Mark Troppe

To succeed in today’s world, U.S. firms need to focus on what they can do better than anybody else, while constantly identifying new opportunities to create products and processes that are difficult for others to replicate.

The United States cannot afford to wall itself off from the rest of the world. Economies that were previously closed are now opening up and rapidly developing their capacity to deliver high-quality, low-cost goods and services. The United States stands to gain through access to these new markets abroad and through access to their more affordable goods and services here at home.

This paper looks closely at the impact of globalization on U.S. jobs in eight industries: textiles and apparel, auto, health care, biotech, telecommunications, personal computers, software, and entertainment. Each is affected by and responding to global forces in different ways.

The study began an hypothesis: if U.S. firms can be the best in the world in developing new technologies, high value-added goods, and knowledge-based services, they should be able to create new and better jobs to replace the old ones that are disappearing, making it possible for the nation to sustain a high-skill, high-wage, high-employment economy. The authors found many examples of where that hypothesis holds true for particular firms—but not for entire industries.