Jun 29, 2017

GE's new Indian factory shows globalization in retreat

Donald Trump isn't the only world leader making hey from protectionist rhetoric and policy — more than 800 new protectionist trade measures have been implemented around the globe since November 2008, including many "Buy American" provisions signed into law by President Obama. The Wall St Journal reports that this dynamic is forcing companies like GE to build factories abroad to win contracts, even if their U.S. operations are more efficient.

One example is a $2.5 billion contract the manufacturer won from Indian Railways, which the company says it couldn't have won without first building a factory complex there in 2014. And if it wanted what is now one of GE Transportation's largest-ever contracts, building a second facility in the remote town of Marhuara, India — a location handpicked by a powerful Indian politician for development reasons — was its only choice.

Why it matters: Once poor countries like China, India, and Indonesia are building infrastructure and human capital necessary to handle sophisticated manufacturing, and they are demanding that multinational firms hire domestically if they want to sell domestically.

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HBCUs are missing from the discussion on venture capital's diversity

Illustration: Eniola Odetunde/Axios

Venture capital is beginning a belated conversation about its dearth of black investors and support of black founders, but hasn't yet turned its attention to the trivial participation of historically black colleges and universities (HBCUs) as limited partners in funds.

Why it matters: This increases educational and economic inequality, as the vast majority of VC profits go to limited partners.

Unemployment rate falls to 13.3% in May

Data: Bureau of Labor Statistics; Chart: Axios Visuals

The U.S. unemployment rate fell to 13.3% in May, with 2.5 million jobs gained, the government said on Friday.

Why it matters: The far better-than-expected numbers show a surprising improvement in the job market, which has been devastated by the coronavirus pandemic.

The difficulty of calculating the real unemployment rate

Data: U.S. Department of Labor; Note: Initial traditional state claims from the weeks of May 23 and 30, continuing traditional claims from May 23. Initial PUA claims from May 16, 23, and 30, continuing PUA and other programs from May 16; Chart: Andrew Witherspoon/Axios

The shocking May jobs report — with a decline in the unemployment rate to 13.3% and more than 2 million jobs added — destroyed expectations of a much worse economic picture.

Why it matters: Traditional economic reports have failed to keep up with the devastation of the coronavirus pandemic and have made it nearly impossible for researchers to determine the state of the U.S. labor market or the economy.