One brutal chart from the biggest hedge fund in the world explains what’s happening in the world
Working class people from the Rust Belt played a large part in getting Donald Trump elected earlier this week. These same types of people also played a role in voting the UK out of the European Union earlier this year.
Trump’s campaign targeted people in once-booming manufacturing towns who felt the punch of globalization as jobs moved overseas. The Brexit campaign had similar success on the areas of Britain that hadn’t shared in the prosperity of the UK capital, London.
This chart from $150 billion Bridgewater Associates, the world’s biggest hedge fund, shows just how hard people across the US and Europe have been hit by globalization, and the loss of jobs to other countries and to technology.
Bridgewater client note
The graph is based on data from MIT economist David Autor and shows how much middle-skill jobs, which generally require some education after high school like community college classes, have declined in the past 26 years. And it really explains an awful lot.
“What this election highlighted more than anything is that there are lot of people in this country who, regardless of their political leanings, are hurting,” Jeffrey Solomon, CEO of Cowen and Company, said in a note. “Many who feel like their voices haven’t been heard for a long time.”
Autor defines middle-skill jobs as white collar clerical, administrative, and sales occupations, and blue collar production, craft and operative occupations.
In an April 2010 research document, Autor said: “The decline in middle-skill jobs has been detrimental to the earnings and labor force participation rates of workers without a four-year college education, and differentially so for males, who are increasingly concentrated in lowpaying service occupations.”
Which populations tended to vote for Trump? White men, typically over 45, typically without a college degree, who believe the economy is in bad shape and that the effect of foreign trade is to take jobs away from America.
In the UK, it is a similar story.
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