Though it has been little more than a month since its passage on June 23, Brexit already is fading in the rear mirror in American policy discussions. We should not let it disappear so easily, for it has lessons for the United States and for us in California .
Brexit not only laid bare the anger at globalization. It also brought needed challenges to the ways globalization was being implemented by the European Union. Whether or not you supported Brexit (or even followed the process), recognizing these challenges can guide us in the nation and in California with our globalization strategies going forward.
Here are three of the popular ideas here and nationwide on globalization and employment that Brexit should help us reconsider.
1 — Workers displaced by globalization will be retrained for more skilled and better jobs: A central theme of globalization in both Britain and the United States has been that workers laid-off by foreign competition can be retrained for new economy jobs that will actually improve their long term earnings. Not only manufacturing workers, but also workers in a range of other sectors, including finance, leisure and hospitality and even information technology will be laid-off by foreign competition. But they will benefit by the new jobs created that retraining makes possible.
Brexit challenged the realities of retraining. Brexit supporters argued that in practice, rather than theory, retraining has been difficult to achieve, especially at comparable wages. This argument corresponded with what British voters were seeing in their own communities.
In the United States, retraining has become an increasing part of the public workforce system for some time. The 2013 federal Department of Labor budget included $1.2 billion for “dislocated worker” training and placement, and an additional $500 million in Trade Adjustment Assistance training and placement.
Yet, despite the generous funding, retraining and placement has been difficult to achieve in the United States, as in Britain. In some cases, the difficulty has the lack of decent-paying jobs in the region; in other cases the limited reading and math skills of the workers or a wide range of other worker limitations.
To take one example, in August 2009, Toyota announced the closing of the New United Motors Manufacturing Inc. (NUMMI) automobile plant in Fremont, California, and layoff of 4,700 workers. The federal retraining/reemployment system immediately went into place, with the local Workforce Development Board joining with the union and employer. Each worker was eligible for up to $15,000 in reimbursed retraining costs, along with continued receipt of unemployment insurance benefits. The process was textbook training, with individual worker assessments and training tailored to interest and skills.
Some workers were retrained for related jobs as auto mechanics and machine operators, while others went into new training as pharmacy technicians, medical technicians and dental laboratory technicians. But the majority were still unemployed a year after layoffs—even in the job rich San Francisco Bay Area. Similar obstacles have faced retraining programs for workers outside of manufacturing.
Retraining should continue to be a central part of our workforce system in the United States for reasons well beyond foreign competition. But in regards to future forms of globalization, we need to go beyond the homilies of retraining, and inject a more realistic sense of what is possible.
2 — Multinational economic organizations, such as the European Commission, can represent the best thinking about economic growth for all: Globalists in the United States have pointed to the European Union as an example of needed rationalization for countries working together. The European Commission was to bring together the best thinking about economic growth for all participating nations. Instead over the years it grew into a vast bureaucracy, expanding its regulatory powers along with its staff and staff salaries.
Nigel Farage, the member of the European Parliament for South East England and one of the leaders of Brexit, captured the sense of entitlement of the European Union officials in a speech he gave on June 28, following Brexit’s success. “None of you have ever done a proper job in your lives”, he declared in a phrase likely to be repeated often as other movements challenge the European Union. Indeed, watching this segment of Mr. Farage’s speech, it’s difficult not to cheer his attack on the other members of the Parliament shown.
As Mr. Farage correctly describes, Brexit was a blow against an unresponsive central administration. The drive of regulatory and planning bureaucracies once established to expand and develop an entitlement ethic is as true in the United States as in Europe.
3 — Material prosperity can be expanded, through greater economic coordination among nations: At its core, Brexit challenged the emphasis on materialism, at the expense of national and local sovereignty and dignity. The European Union promised unprecedented material prosperity, among the member nations. But as it came to be implemented, the European Union politicians and administrators lost sight of national sovereignty, the ability of nations to make decisions about citizenship and culture, as well as their own economies.
The British voters who supported Brexit saw in Britian something beyond a collection of material goods. More than additional toaster-ovens, large-screen television sets, or the newest autos, they valued their autonomy and the autonomy of their local and national governments. Faced with threats by nearly all segments of the economic establishment that Brexit would result in economic decline, the majority of British voters chose values beyond material goods.
In the United States, our own economic establishment continues to tell us that to oppose globalization is to be short-sighted, narrow-minded, provincial. But the same values of autonomy and community that drove British voters also drive voters in the United States. Globalization as it is currently being pursued in the United States is finding opposition, especially among worker movements, and this opposition will grow unless our approach to globalization shifts.
Brexit should be a wake-up call for us, as to other nations in Europe.