Detroit’s existing workers weren’t harmed by a global influx of people in pursuit of Henry Ford’s $5/daily wage. The impressive pay Ford offered as a way of shrinking employee turnover logically added to the productivity of Detroit’s existing workforce, and by extension their ability to earn even more.
That’s because people are never a cost, they're an input. The more hands at work in the production of market goods, the more worker elevation born of specialization.
The guess here is that American Institute for Economic Research economist Julia Cartwright would agree with all that’s been said so far. Work divided is arguably the most powerful force in economics.
That’s why Cartwright’s recent commentary about China and manufacturing in the Washington Post was so puzzling. In the referenced opinion piece, Cartwright wrote that “No doubt the China shock was real. Economists such as MIT’s David Autor have documented the loss of roughly 2 million American manufacturing jobs…”
Seemingly not asked by Cartwright is if Autor documented the alleged “shock” of New York City and Los Angeles losing all or nearly all of the manufacturing jobs that formerly existed in both cities. 100 years ago New York, Los Angeles, Milwaukee, and Flint could lay claim to the biggest manufacturing economies.
That New York and Los Angeles left the past behind more rapidly than did Flint and Milwaukee to the betterment of the coastal cities is more than a statement of the obvious. That’s because the locales evolving the fastest are easily the biggest magnets for the most ambitious people most interested in creating a better future.
Cartwright cites Autor’s alleged discovery of the supposed downside of globalization whereby “communities built around textiles, furniture and other labor-intensive industries” were gutted by economic activity in China, and “never fully recovered.” That Autor gets it backwards isn’t surprising, but it is surprising that Cartwright would join him in mistaking causation.
Missed by both economists is that the exit or closure of a business could never consign a location to near or long-term desperation. Conversely, the only threat to any locale is the loss of ambitious people whose ambition routinely lifts streets, towns, cities, states and countries.
Looking at it through the prism of Autor’s “communities built around textiles, furniture and other labor-intensive industries,” their present-day struggles aren’t an effect of the labor-intensive work that migrated to China, but instead the departure of best and brightest Americans from those towns who wanted nothing to do with factory work. Looking at this with China top of mind, its happily growing role in globalized production isn’t a threat to U.S. cities and towns, rather it’s a gold-plated pathway for them to more quickly leave the past behind so that the “vital few” (Reuven Brenner) don’t so readily exit.
A so-called “China shock” implies economic harm born of more hands and machines in the workforce, but the genius of work divided hardly loses its luster if those we’re dividing up the work with are based in China. In short, the so-called “China shock” promoted by Autor as a pejorative, and cited by Cartwright in similarly downcast fashion, has been relentlessly brilliant for the U.S. Readers still skeptical should check U.S. stock indices in 2026 relative to 2001 for a market verdict that would reflect China's happy rise, among other things.
