For the 30 states that have lost jobs since the recession purportedly ended, this is the other shoe dropping—not only have jobs been lost, but in 29 of them the losses have been concentrated in higher paying sectors. And for 19 of the 20 states that have seen some small gain in jobs since the end of the recession, the jobs gained have been disproportionately in lower-paying sectors. [Economic Policy Institute 01/21/2004]
So why is this happening? The Trojan horse of "Free Trade" (NAFTA, FTAA, etc.) and globalization are a big part of it.
About now is when Michael Kinsley or others of his ilk are getting ready to jump in shouting "protectionist" and telling me that I "just don't understand the 'Theory of Comparative Advantage'" and how free trade is great for everyone in the whole wide world.
I'm not and I do and it's not.
Unlike the free-traders, I also understand that, as this study shows, the theory doesn't work any more. It is being used by multi-nationals as a cover for maximizing profits at huge social and economic costs to countries around the world.
Background (I'll make this brief): "Comparative advantage" is the under-pinning of the free trade arguments. It's a concept from 1817 and the world has changed a lot since then. David Ricardo developed the theory that a country should concentrate on producing what it's best at and trade those goods for others that some other country is best at producing.
He used wheat and wine in England and Portugal as an example. Portugal was assumed better at wine than wheat so wine was its "comparative advantage", while England was better at producing wheat than wine so wheat was its "comparative advantage."
He then showed that even if Portugal were better at producing both products, both nations would be better off if England stopped producing wine and Portugal stopped producing wheat. Portugal would then trade its wine for wheat from England. Wine producers in Portugal and wheat producers in England would improve their productivity and profits. They would then reinvest their profits in their respective countries, and both nations would end up better off.
While counter-intuitive and riddled with assumptions, a rough approximation of the Theory of Comparative Advantage worked for quite a while. Because we don't live in a perfect world, it required some regulation and that was provided by international organizations and the common sense of politicians who understood that the needs of their citizens were a major point of the exercise of trade.