Source: forbes.com

Mark Carney is a Canadian economist whose performance as head of Canada’s central bank during the financial crisis was so good – none of Canada’s banks actually failed and needed to be rescued – that he was hired to be the Governor of the Bank of England.

In a speech about trade last week, Carney had the guts to admit what workers in the United States and President Trump have long known – economists don’t know didly when it comes to job losses from globalization.

“Consider the disconnect between economists and workers,” Carney said. “The former have not been sufficiently upfront about the distributional consequences of rapid changes in technology and globalization. Amongst economists, a belief in free trade is totemic. But, while trade makes countries better off, it does not raise all boats.”

"Not sufficiently upfront" is a polite Canadian way of saying that economists lied. Finally, an economist who recognizes that out sourcing all those jobs to China and Mexico hurt a lot of Americans, who first saw their pensions disappear under Reaganomics, then their jobs fly offshore under globalization, getting a few weeks of unemployment benefits in compensation for a lifetime of loyalty to a firm. And people wonder why workers are angry?

Carney went on to admit that “the benefits from trade are unequally spread across individuals and time. Consumers get lower prices and new product varieties, and, over time, benefit from the spur to innovate and higher productivity. Some workers, however, lose their jobs and the dignity of work, or see their ‘factor prices’ – in plain English, wages – equalized downwards.”

He’s talking about the people who formerly had good paying factory jobs, who saved and put their kids through college, who are now forced to move boxes at Walmart and Amazon. A lot more than wages was downsized.

Carney has a prescription for the problem, but like most innovations from people up north, not likely to be listened to or adopted in Washington.

“For the societies of free-trading, networked countries to prosper, they must first re-distribute some of the gains from trade and technology, and then re-skill and reconnect all of their citizens,” he said “By doing so, they can put individuals back in control.”

In addition, the US needs to adopt a vastly greater investment in apprenticeship programs, where students can learn new technologies and apply them on the job. Germany has such a program and they have a trade surplus, no government fiscal deficit and 3.5 percent unemployment.

While that sounds a bit socialistic, Carney is careful not to suggest a welfare state. “Fostering dependency on the state is no way to increase human agency, even though a safety net is needed to cushion shocks and smooth adjustment.”

Another of his interesting suggestions is that multinational corporations that currently pay little or no tax by sheltering their profits overseas need to be reined in. There should be an agreement among rich countries that corporations have to pay tax somewhere.

Is this solution too late to help? Not really, especially when you see suggestions, like this one from economist Richard Baldwin (hat tip to Quartz.com), that a third wave of globalization is about to disrupt the remainder of workers who were not whacked over the head by the last wave.

Globalization in the next wave will be disruptive to the seven largest developed economies, “but instead of just in the manufacturing sector, it spreads to services. Only about 10-15% of the population works directly in manufacturing in the G7—the rest work in services,” Baldwin says in a new book called The Great Convergence.

The two technologies Baldwin thinks will carry out this feat are telepresence and telerobots. He gives the example of hotel room maids in New York being replaced by cleaning robots that are directed via a kind of super Skype by workers in very low wage countries like Tanzania, much like air force pilots based in Las Vegas currently fly drones over Pakistan.

My guess is that driverless cars and trucks, likely to start appearing in about five years, will have a much bigger impact, replacing the 7 million truck drivers and uncounted number of Uber, Lyft and taxi drivers who currently work in the US.

But we know that the layoffs are coming. Now is the time for politicians in Washington to recognize how shortsighted everyone was about the first and second waves of globalization and adopt a comprehensive program to help workers whose lives will be turned upside down by these changes. But I suspect they won’t.