While Alan Greenspan has won praise for his successful 18-year battle to keep inflation under control, he's the first to say he's had a lot of help. Among those most responsible are tens of millions of workers in China, India and Eastern Europe.
Adding all those workers to the global economy has made the Federal Reserve's inflation-fighting job easier by increasing competition. That has helped hold down labor costs the biggest single expense for employers and, as a result, prices.
It has come at a cost: Many of the jobs being done overseas used to be in America.
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Last week, General Motors Corp. announced plans to cut more than a quarter of its North American manufacturing jobs 30,000 in all and close 12 facilities by 2008. Those cuts will be added to the more than 3 million manufacturing jobs one in six that have been lost since mid-2000.
"U.S. manufacturing jobs have withered over the past five years and many of those jobs are never coming back," said Mark Zandi, chief economist at Moody's Economy.com, a private consulting firm.
For those U.S. workers who still have jobs, the pressure on their wages has intensified as companies use the threat of moving more production overseas where labor is far cheaper as a way to extract concessions from their U.S. workers.
This phenomenon has hit manufacturing the hardest. But service workers are starting to be hurt as well. The ability to transmit digitally massive amounts of information to faraway places has led companies to send overseas jobs in such high-tech areas as architecture, computer software, medical services and engineering.
"It is one thing to celebrate keeping inflation in check. It is another thing to celebrate that living standards are stagnant or falling for most American workers," said Thea Lee, policy director for the AFL-CIO.
All the goods flowing into the U.S. from overseas have produced a record trade deficit that must be financed by borrowing from abroad.
In 1987, the year Greenspan took over as Fed chairman, the U.S. had a deficit in its current account, the broadest measure of trade, of $160.7 billion. Last year, that deficit set a record of $668.1 billion and is projected to go even higher this year.