Greenhouse. He was a reporter for the New York Times for 31 years. He spent his last 19 years as their labor and workplace reporter covering topics ranging from poverty among the nations farm workers to fight for 15 to disasters in bang la tesh. He is author of the Award Winning book the big squeeze, tough times for the american worker. Please give a warm welcome to mr. Steven greenhouse. [ applause ] good evening. Welcome, everyone, to this evening interesting and Important Panel discussion. It is so bright here, i forgot my sunglasses. Sorry. Were discussing a very hot topic, made hotter by the current president. Does globalization only serve elites. Globalization is, of course, in the news. President trump has railed against it, even as Chinese Companies are offering to invest 400 million in the fifth avenue building owned by his soninlaws family. Thats an example of globalization. We see article after article about how globalization has hurt workers in youngstown, dayton and detroit, even as economists strongly agree that globalization and free trade spur Economic Growth. Those who rail against globalization are often beneficiaries of globalization as they wear gap jeans made in mexico or walmart shirts made in bangladesh or Neiman Marcus apparel made in italy while using mobile phones assembled in china. For the big show. We have an excellent panel of experts to discuss globalization tonight. Steven chunk is president of the World Trade Center los angeles. He previously served as the los angeles secretary general of Foreign Affairs and trade under mayor Eric Garcetti and director of International Trade for port of los angeles. Catherine stone is an expert on labor and Employment Law at the ucla school of law. She was awarded a fwug enhypothetice guggenheim award. Jury railway nichols burg focuses on asian economies. He works on the and aer son schools economic modelling and forecasting of the california and u. S. Economies. Kati zuwaman is founder and ceo of next trade group, a firm that helps government, Multilateral Development banks and fortune 500 Companies Shape their Public Policy and lending strategies in support of trade and obligation. So well start with a question for jerry. So President Trump said last june in a Campaign Speech in pennsylvania, a state where there are many shuttered factories and steel mills, then candidate trump said globalization who made the financial elite who donate to politicians very, very wealthy, but it has left millions of our workers with nothing but poverty and heartache. What is your reaction to the president ial remarks . Well, when you think about globalization, you know, you have to ask the question, isnt it obvious and woe jue just say and kind of get to the deception here. The reason it is not so obvious is that the data are actually really convoluted because there are a lot of things going on. Theres one major event going on that keeps us from getting to the root of this in terms of the data. That is at the same time as weve had had globalization, that is over the last 15 years because we didnt see this with the early times of nafta. But over the last 15 years, during that same time what weve seen is the rise of the robots. That has meant that firms are substituting capital for labor and for the returns to capital are increasing, but also those are complements with information information intensive workers. So you have kind can of a bifurcation of workers. In those information workers are also seeing benefits. So were seeing much mor more inequality just on that and that would occurred without any trade. When we look at the data, these things are mixed together and you have to kind of unravel what is more important in order to get to solutions. So i want to take a quote from Bernie Sanders in an open ed oped in the New York Times. He said in the last 16 years and more than 4. 8 well paid manufacturing jobs disappeared. Much is related to disastrous trade agreements. I will pose this to you, catherine. Then sanders added, the Global Economy is not working for the majority of people in our country and the word. This is an economic model developed by the economic elite to benefit the economic elite. Okay. Well, to pick up and i somewhat differ a little bit with what jerry said. I think it is certainly true theres been a huge drop in manufacturing employment, particularly since about the year 2000. I think there has been a huge rides in productivity which is reflected which reflect a big boost in automation technology, but theres also a big impact of trade. I think different economists have or economists have differed as to which is more responsible and how many jobs, and i have seen estimates that talk about anywhere from 2 million to 3 1 2 million of lost manufacturing jobs being the result of trade and the other 1 1 2 million being the result of technology and other economists would put the numbers vastly lower, responsibility for trade and more for technology. But i think theres no doubt that trade has played a big role. So from that point of view to at least is it only benefitting elites . No, consumers benefit and some Workers Benefit but theres a big cost. The problem with globalization or global trade is there are winners and losers, and that the losers havent been adequately compensated or havent been adequately supported or in any way sort of benefitted by social policies or other kinds of economic programs that might make them winners as well. A question for katia. When i read Tom Friedmans the world is flat. I came away with the feeling that globalization is great for companies. They could invest anywhere in the world, in bangladesh, shh relaunch a india. It is great for them and the bot many on line. Not great for workers in the United States. Might be great for workers in sri lanka or india. I want to ask you, do you think globalization benefits the elite mainly disproportionately, does it hurt workers in the industrial work, and what are the effects for workers in the developing world . I think tying the two together, tied to both of the is the results of these studies are very textbook. Trade, in theory is supposed to have wide and dispersed gains for all countries, all people. But concentrated losses and thats what weve seen in studies. So indeed there are some negative impacts but on the balance, i would sides with economies that have in multiple studies found that the competitive impact on u. S. Economy of imports coming in are companies having to get more efficient has generated income gains for all of us. All of us are 30,000 richer every year because of the shifting and shorting r sorting through the u. S. Economy and we have to compensate workers. We are at the verge of an opportunity in the u. S. Economy in particular as well as at the global level where digatization is enabling people from every walk of life become, for instance sellers on e bay as workers on platforms like upward, provide services to companies all around the world. We see Companies Selling online globally. An average u. S. Company, 5 of u. S. Companies export on average to about two countries. When you look at ebay sellers, 99 of them export and they export to 19 countries. These are the new drivers of globalization and these are the new kinds of companies that we should encourage workers to graduate into and contribute towards and ride on this new globalization. A questioning for steven est. The people who are hurt the most, the squeakiest wheel. I want to discuss globalization california. California the port of l. A. , the port of long beach, the nations largest ports, sillicon valley theres a little exporting. So can you talk about in the state of california and los angeles who were the winners in globalization and who were the winners . And does the state really benefit by and large from globalization. I think california as a whole has benefitted. There are a lot of discussions about how were the victims and were the ones hurt by this. The United States have actively participated and dominated in the global efforts. We set the monetary currency and for the global trade to happen and now that theres competition 60 70 years later now were the victims. Yes, theres winners and losers. But there were losers from the very beginning 60 70 years ago. California, because of our proximity to asia, because of the Manufacturing Base in china, 30 40 years ago that started building up. 33 of all cargo comes into l. A. And long beach. From the logistic trade sector really benefitted greatly from it and our agricultural aspect from california, we export a lot of those goods internationally as well. Overall, weve done quite well. And i want to take a note to something said earlier before. I think you mentioned that senator sanders mentioned that the Free Trade Agreement has created these factories are empty. The one note i want to make sure that we know is the main target i guess of why were seeing these decline in some of these factories is attributed to china. Please note we dont have a Free Trade Agreement to china. Another question for jerry. So lets imagine that were all taking a stroll into a Walmart Store and we meet several shoppers. One buying a samsung tv made in china or a pair of jeans made in mexico or shoes in brazil. And lets say we pose the question to the walmart shopper. It only serves the elites. How do you think theyd answer and how would you respond to that question . What would you tell them . First of all how did you get my shopping list. I mean i think their answer is going to be yes. Of course it does. Even if theyre living in dayton, ohio. Especially if theyre living in dayton, ohio, maybe less if theyre living in santa monica. Yes, globalization hurts workers and helps elites. So the question is how do you explain . The gains from trade are really easy to explain. I do this with my mba. It takes about half an hour and at least most of them get it. But the issue when you look at the gains of trade, they go to different places. And the problem is with policy, we treat all Industrial Workers who lost their jobs the same and i think that was a point that was made earlier that some Industrial Workers in their 30s are quite prepared to move into the new economy with appropriate guidance. Some are like tom joed and the grapes of wrath and that takes a different kind of policy and i think our policies are policies that use hammers when they ought to be using skcalpels. I want to make one other quick point and that is that u. S. Manufacturing, some of its movaled abroad but here in california were manufacturing about 160 of the goods we were manufacturing in 1990 with only 60 of the workers. So a lot of things happening in this economy and trade is one of them but its only one of them. I have a question for catherine. So lets say were taking a stroll in youngstown, ohio and youre walking down main street and find all these 60 year olds that used to work in steel mills and are laid off. You say economists say it gives Consumers Choice and lifts the overall economy. We know what neer going to tell you. What in your view should be done specifically to help them . Thain places like Youngstown Ohio or upstate new york where i lived for many years or outside of pittsburgh or detroit youre going to see people devastated, particularly people who have manufacturing jobs in the past, high paid jobs with good benefits, often with unions. Those jobs are gone. They either have no jobs or if they have jobs in the service sector, they tend to be low paid. Theyre working at fast food establishments, theyre working part time in retail or theyre working in Home Health Aids. So whats happened is that high paid jobs have left and low paid jobs have not just filled in the gaps but multiplied. Theres been a huge shift to service jobs but the low end service jobs have multiplied and are continuing to do so. Theyre projected to increase tremendously in the next 10 years and manufacturing jobs are predicted to continue their decline. And this gets back i think to something about what should be done. Theres nothing in the nature of the universe that says the Home Health Aid has to be a bad job. There could be steady hours, there could be benefits. A union. And so the fact that people have different jobs i mean in our economy its true that theyre very low paid and its very hard for people to support themselves or pay their rent if theyre only earning 10 an hour. 24 hours a week. But theres nothing that says that couldnt change and one thing that would be changing some of our labor laws. So they would have more Bargaining Power. We also might think about various other kinds of retraining or social benefits that make it possible for people to reenter the work force and to get some Bargaining Power so that when they actually get new jobs, the jobs are better than jobs they lost rather than it being a steady decline. So like many professional economists you sing the praise of globalization that it helps increase efficiency, licft Economic Growth world wide, gives consumers more choice. But why then does globalization get such a bad rap . Why are donald trump and Bernie Sanders attacking globalization if its a general good . Its an easy target, first of all. Easy to point to. Hey, my factory moved to china. But its very much what jerry said. So much of this has been changing technology. China, the factories are in china are less and less run by miniature workers. There are robots, 3d printers there as well. Its a global fenphenomenon. Some of you may remember around the time of the election there was a New York Times story about two ladies in a carrier factory in indianapolis and this was a time when there was talk about carrier moving to mexico to manufacture there and these ladies said if trump doesnt deliver on those tariffs, were going to vote a different way in the midterm election. 150 miles down the road, theres a guy called travis. He started his own business out of college, 2004, retailed for motorcycle products and couple of years later, he started to sell online. And today he started that business with 7,000. Today he exports to 130 countries and 40 of his sales come from export and these stories repeat themselves from india, el salvador, all around the planet. These are the people essentially riding on globalization. Were on the verge of a historic period where for the first time its posable to have a medieval town square at the global level. We are right now at the cusp of this and we can do this but it takes concerted policy in the u. S. And globally of trade facilitation, all this has to align as well as trade policy. Germany is in theory a more globalized nation in the United States because a higher percentage of its gdp goes to trade, imports and exports. Globalization does not have as bad a rap in germany as it does in the United States. So i ask why does globalization get such a bad rap here compared to other countries and i think one reason is we do not, as a nation, do enough for the losers in globalization. Let me ask catherine, steven. Why do you think what about the United States does enough to prevent us . To go back a little bit to first principals and his theory of competitive advantage. This is the 200th Year Anniversary of that publication and this shows if you have countries even with vastly different resources and levels of wealth that theyre both benefits by trade but it doesnt say anything about whether different groups within the countries are benefitted by trade and so all the benefits can go to the top and the theory is ag nostic on that. Each nation is a black box. So the question of who benefits from trade is really a question whether there are distribution method in a nation. The question in the United States is weve made it harder to form unions. S the theres been a new massive work laws that make it hard to unionize. Weve had ever since ronald regan federal policy to weaken unions and so i think that its not a surprise that labor shared gdp has fallen, that unionization rates have fallen and that you get these workers who have lost in the global marketplace who arent getting any resources or dont have the resources themselves to be empowered to protect themselves. I want to add to that and bring an aspect of culture into this. I was in germany in april going to the hanover trade show and i saw the innovation there. Theyre looking at the next generation. I think United States are entrepreneurs are very inovatesive, but as a whole, the United States, theres a mentality of americas number one. Number one in what . Obesity . Right . There are a number of different issues that we have but were proud of our past and to the story earlier about the two ladies in ohio was it . Indiana. They were looking that they want trump to bring back their old job, whereas this other gentleman down the street is looking towards the future. The solution i think is what youre seeing as well. Especially with the auto manufacturing. We already know you can blame mexico for this. But a lot of the part components are going to mexico for the final assembly and 60 of their manufactured goods so were integrating in their