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'American Rust' In The New Geography Of Jobs Chapter Summary

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1. In one paragraph, summarize the thesis and main points of chapter 1 "American Rust" in The New Geography of Jobs
Chapter One of the New Geography of Jobs, titled “American Rust,” focuses on the fall of manufacturing employment in the US. Although manufacturing jobs pulled America out of the Great Depression and led to a period of stability and increased consumerism, in 1979, it stopped being “an engine of prosperity.” While the fall of the manufacturing sector is often blamed on banks and financiers, the real reasons are globalization and technological progress. Implementation of the theory of comparative advantage led to a contraction of certain manufacturing industries in America and led trade to take place instead. With the rise of globalization, …show more content…

This sector, which includes science, technology, design, entertainment, marketing, and finance, has recently experienced explosive job growth and productivity. Although the US is heavily skewed towards the non-traded sector, Moretti argues that the innovative jobs in the traded sector lead to overall prosperity because of their large multiplier effect. Increased wages and a rise in the number of jobs in the traded sector lead to a mirror effect in the non-traded sector. Moretti notes that the multiplier effect of the technological sector is particularly large because technological employees have high salaries, the companies they work for require many services from local businesses, and because the industry itself has a strong clustering effect.
Moretti suspects that the innovative sector will keep on growing because this sector increasingly appreciates the value of talent. Due to globalization and technological progress, the rewards reaped from new ideas greatly outweigh the cost. He says that outsourcing manufacturing jobs is a good thing as it leaves high potential and innovative jobs for Americans- well-paying jobs that create more jobs in the face of global …show more content…

I was surprised by the number of consequent jobs that innovation created for the local economy. Moretti goes on to explain that the job requirements of the newly created jobs match a varying range of qualifications, from doctors to waiters. This demonstrated to me that every type of worker, regardless of his/her skill level, benefit from a larger presence of innovation. I was surprised to learn the level of dependency of the entire economy on the innovation sector. This new information deepened my prejudice against Trump’s heavy emphasis on bringing manufacturing jobs back to the US. He has been capitalizing on blue collar workers’ infatuation with manufacturing and trying to revive an industry that lost a good deal of jobs to automation when instead, he could be focusing on innovation. Innovation could lead to jobs for non-college educated white men who have been hurt the most by globalization and manufacturing

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