Dean Baker: Denialism on Trade
Denialism on Trade
By Dean Baker
December 29, 2016
It is really amazing how the political and economic establishment types feel the need to deny that trade can actually have a negative impact on manufacturing jobs and total employment in their arguments against Donald Trump’s trade policies. George Will gave us a great lesson in this silliness in his column today.
Among the highlights were the claim that the loss of manufacturing jobs in the years after 2000 had little to do with the explosion of the trade deficit to almost 6 percent of GDP ($1.1 trillion in today’s economy), but rather was almost all due to productivity. There are two points about this one that should immediately lead numerate types to tear up the column.
First, we always have productivity growth, that was not something that just happened in the decade of the 2000s. In spite of productivity growth, manufacturing employment changed little from 1973 to 1997, when our trade deficit first began to explode following the East Asian financial crisis and the surge in the value of the dollar. While manufacturing was declining as a share of total employment, the level remained roughly even (with cyclical ups and downs) at 17.5 million. Employment then plunged to around 12 million as the trade deficit soared. Productivity growth was not the new part of the story, the trade deficit was. (Susan Houseman has done excellent research showing that manufacturing productivity growth in the 2000s was almost entirely in the information technology sector, which means it will not explain a loss of jobs in sectors like steel and furniture.)
For the full article see: http://cepr.net/blogs/beat-the-press/denialism-on-tradePopulist Prole, Hawkowl, bbgrunt and 3 othersPunxsutawney, jwirr, djean111 like this
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