Politics meets facts on free-trade deals in Michigan

In his bid to win over blue-collar voters in Michigan and elsewhere, Republican Donald Trump has declared that the pending U.S. international trade deal with Asian nations would amount to "a rape of our country."

In that same vein, Democrat Bernie Sanders’s surprise win in the March presidential primary vote in Michigan was largely credited to his message that free-trade agreements had “decimated” the state’s economy.

And Democratic presidential nominee Hillary Clinton, in response to that stinging loss in Michigan, co-opted portions of the Vermont senator’s platform by asserting that all U.S. trade pacts deserve to be viewed skeptically, rather than engaging in “trade for trade's sake.”

But do the political attacks match the reality of the impact free-trade agreements have had on the U.S. and Michigan economies?

In the arena of presidential politics, a populist message that rails against free trade as a job-killer has been a sure winner this election season -- as Sanders showed in winning Michigan. In the world of economics, however, policies that remove tariffs and other trade barriers, creating a more level playing field, are generally recognized as a net gain for the economy.

Many Michiganders may not realize that Michigan is a major player in global economic competition, ranking sixth among the 50 states in employment supported by exports to foreign countries, at 270,240 jobs. Michigan also placed third in the number of new export-related jobs created (63,000) since the 2008-09 recession.

In the two-way street of exports vs. imports, Michigan appears to be doing well.

While other top states such as California and Texas enjoy geographical advantages for shipping products overseas, Michigan stands at No. 2 for exported manufactured goods (over $53 billion last year) among states without an ocean port, behind only Illinois, according to the U.S. Census Bureau’s economic calculations.

Rhetoric can be ‘dangerous’

To be clear, it is nearly impossible to measure with precision the economic impact of any free trade agreement on an individual state. The connection between trade deals and stagnant U.S. wages can also be hard to quantify, especially for the still-controversial NAFTA pact the U.S. undertook with Mexico and Canada in 1994.

But among the original 20 presidential candidates in 2016, Republicans and Democrats, heart-wrenching anecdotes about U.S. workers who lost jobs to globalization generated a visercal response that sometimes overwhelmed any attempt to explain the nuances of employment data, or the benefits that residents in Michigan and elsewhere reap from international trade.

“I think the rhetoric on trade in the presidential campaign has been often misleading, and sometimes dangerous,” said Charles Ballard, an economist at Michigan State University. “Virtually all of the attention has been focused on one aspect of trade, which is that imports compete with domestic production.

“…Much of the ‘debate’ in the (presidential) campaign makes it sound as if import competition is the only thing that comes with trade, and it ignores the value of exports and lower prices.”

Nationwide, 11.7 million workers rely on the export business for their paycheck, a 20 percent jump since 2009, according to figures compiled by the U.S. Department of Commerce’s International Trade Association. Some of that increase is attributed to post-NAFTA free-trade agreements with 14 countries signed during the George W. Bush and Obama administrations.

In Michigan, exports to international free-trade partners have grown by nearly a third since 2005, according to federal data with more than 70 percent of Michigan exports in 2015 going to these trading partners.

On the other side of the ledger, U.S. job losses over the past two decades, including 5 million in manufacturing, are undeniable. But how much of that decrease is due to trade policies and free trade agreements is debatable, according to economists in Michigan and nationally. They point out that U.S. manufacturing jobs, as a percentage of the nation’s workforce, have been on the decline for 50 years, well before NAFTA.

And as America has moved toward freer trade, with 20 free trade agreements now in place, Michigan’s economy has benefited in ways beyond the products it exports.

Unemployment in the state, in part due to the domestic auto industry’s record surge, has fallen precipitously from a peak in June 2009 of 14.9 percent down to under 5 percent in every month of 2016. The U.S. Bureau of Labor Statistics reports that Michigan has gained manufacturing jobs for six consecutive years, about 165,000 overall.

Trade a huuge issue

As Republican nominee Donald Trump travels state to state for votes this fall, and fiery populist surrogates such as Sanders and Sen. Elizabeth Warren of Massachusetts beat the drums for Clinton, Michigan will enjoy the spotlight as a key prize on the road to the White House.

The rhetorical template in the battle for Michigan can be found in exit polls taken last March during Michigan’s primary. Surveys found that three-fifths of voters, Republican and Democrat, agreed that free trade hurts the American economy. It’s a sentiment that portends a fall campaign likely dominated by trade debate.

Trump is already tapping into the electorate’s globalization anxiety here and in other key Rust Belt swing states such as Pennsylvania and Ohio. At last month’s Republican National Convention, Trump confidently predicted “millions of Democrats” will cross over to vote for him in November, particularly anti-trade Sanders supporters.

As a result, union leaders and pro-labor Democratic officials remain nervous about Trump’s exploitation of the trade issue ‒ even as pro-business Republican leaders are spooked by Trump’s brash reversal of GOP orthodoxy that holds breaking down foreign trade barriers as a plus.

Clinton, meanwhile, signalled her shift months ago by declaring her opposition to the Trans-Pacific Partnership (TPP), the pending trade deal with 12 Asian and Pacific Rim countries that Trump had equated with rape. As U.S. Secretary of State, Clinton publicly praised the 5,500-page TPP as the “gold standard” of free trade, a pact that would be good for American workers and will “strengthen the position of the United States in Asia."

One day after he was chosen as Clinton’s running mate, Virginia Sen. Tim Kaine, previously a stalwart on free trade, announced that he now opposes the TPP. The Democratic Party platform introduced at the party’s recent Philadelphia convention largely sides with the Sanders approach on trade matters.

Fighting a lost battle

As the campaign transitions toward the Nov. 8 general election, voters can expect to see countless “photo-ops” by Trump and Clinton in front of vacant factories without any detailed explanation of why those jobs disappeared, a tactic employed by Sanders in the primary.

It’s a connection that makes some economists squirm.

Donald Grimes, a research specialist at the University of Michigan’s Institute for Research on Labor, Employment, and the Economy, said trade practices with other nations, with the exception of China, have had a relatively minor impact on factory closings in the U.S.

New technologies, automation and robotics, general increases in efficiency, and major advances in logistics have all contributed to an increase in industrial productivity and a simultaneous reduction in manufacturing employment.

In the big picture, the overall U.S. trade deficit for goods and services has stabilized at about $500 billion in the past five years – a 30 percent improvement in the nation’s trade balance from the pre-recession levels of a decade ago.

Globalization, meanwhile, has become an economic reality and those working-class voters who point to trade restrictions as a way to “Make America Great again” are too late, Grimes said.

“I think people are being misguided,” he said. “You can’t look into the rearview mirror. Those jobs are gone. You can’t change history. In some sense, it’s an old story. People should have been concerned about the trade deficit back in the late 1990s and early 2000s. We’re fighting the last battle.”

Most Michigan export activity occurs in southeast Michigan and, not surprisingly, most of our products shipped overseas are connected with the auto industry, with other export categories including machinery, chemicals, computer and electronic products and electrical equipment.

Free-trade agreements remain especially lucrative for key elements of the farming community. Despite a drop in 2015, American crop exports have more than doubled since 2000, according to the U.S. Department of Agriculture.

In Michigan, the agriculture industry exports roughly one-third of its products a year, generating nearly $3.2 billion, according to the state. Our biggest trading partner: Canada, which receives 60 percent of the state’s agricultural exports, with Mexico placing second.

NAFTA’s complicated legacy

Recent U.S. trade agreements with countries ranging from Australia to Singapore to the Dominican Republic have yielded surpluses for the U.S., but the national discussion on global competition this election year inevitably turns to NAFTA, the North American Free Trade Agreement, signed into law in 1993 by President Bill Clinton.

Trump calls NAFTA the “worst trade deal in U.S. history.” Hillary Clinton favored the NAFTA accord with Canada and Mexico as First Lady in the 1990s, but in the 2008 Democratic primary race against then-candidate Barack Obama she declared that the pact was “a mistake” – a position she has stuck to since.

But NAFTA’s legacy after 22 years is more nuanced than the portrait drawn by 2016 candidates - both in Michigan and nationally. The pact dramatically boosted cross-border sales of goods among the three countries. Though it did not deliver the influx of new U.S. jobs predicted by then-President Bill Clinton.

Some pro-labor advocates claim NAFTA cost the U.S. up to 800,000 jobs. Here’s a job loss calculator offered by Public Citizen, the consumer watchdog organization founded by Ralph Nader. But the Congressional Research Service concluded last year that the net loss was, at the most, negligible.

That doesn’t mean there has been no pain, far from it.

Gary Clyde Hufbauer, with the nonprofit Peterson Institute for International Economics, wrote in June that when NAFTA was first implemented plenty of mainstream economists warned Congress that U.S. workers would be displaced, but that the upside of “open trade exceeds by at least 10 times what it would cost to meaningfully assist workers who lose their jobs to import competition.”

The problem, Hufbauer noted, was Congress offered workers only “token” assistance after the pact was signed, which he said has helped to fuel the current backlash against trade liberalization.

Even so, political arguments that NAFTA allowed Mexico to “steal” jobs from the U.S. ignore other economic factors. While the Mexican auto industry enjoyed a boon after NAFTA took effect, Bridge has noted in past reporting that this was partially due to trade agreements the Mexican government signed with 40 other countries and an aggressive push to land new factories from American, European and Japanese automakers.

Moreover, trade liberalization with Mexico was already underway prior to NAFTA, and U.S. “transplants” – production facilities established south of the border by the Detroit Three automakers – first arrived in 1980. The trend has increased since then, with $24 billion in Mexican investments planned or implemented by domestic and foreign automakers over the past several years.

Still, the number of auto jobs located in the U.S remains about the same as in 1997 when the U.S. and Michigan economy was strong.

Trump hits China, ignores Canada

Today, Mexican economic activity represents about 10 percent of the overall U.S. trade deficit. Imported goods from China, plus oil and petroleum products from the Middle East, make up much of the rest of U.S. imbalance.
On the national stage, the political potency of the China trade issue is glaring, and Trump has aggressively, and effectively, pounced on it, warning that China is “sucking the blood right out of our country.” Chinese investment in U.S. businesses and factories reached a record level of $18.4 billion in the first half of 2016, higher than all of last year.

In Michigan, however, China’s role as a trading partner is small compared with Canada and Mexico.

Paul Traub, a business economist for the Federal Reserve Bank of Chicago’s Detroit branch, said workers struggle to comprehend changes in international trade that have accelerated rapidly over the past two decades, though the cycle has existed for two centuries. China’s role as an exporting behemoth, he added, may have already peaked.
“Americans are having a hard time getting their head around this issue. They want to know, ‘What is our role in the world economy? Where do we fit in?” Traub said. “This is the full cycle. We did to Great Britain what China did to us and what’s being done to China now.”

While Trump has said he intends to renegotiate NAFTA with both Mexico and Canada, he has saved most of his vitriol for our southern neighbor. Yet, Canada, not Mexico or China, is the largest trading partner of 36 states, including Michigan.

Canada, with nearly 30 percent of its workers unionized, and an extensive government safety net to protect the poor, doesn’t fit the picture of a bogeyman in the trade debate.

Post-NAFTA successes on trade

Third Way, a centrist research group in Washington, released a study in April that concluded U.S. free trade agreements implemented from 2001 to 2012 are far more beneficial to the United States economy than NAFTA. Overall, 14 of the 17 post-NAFTA agreements produced net gains for the United States, generating a collective trade surplus of $85 billion, the group found.

Here in Michigan, shipment of goods to Chile, Australia and Honduras more than doubled since free trade agreements were established with those nations in the mid-2000’s.

“Just as the quality of automobiles or computers has vastly improved since 1994, so have our trade deals,” the Third Way report found.

“Modern deals...have improved as a result of the lessons we learned from NAFTA. These new deals have strong labor standards that benefit U.S. workers, while NAFTA did not. These new deals have environmental protections in the agreements, while NAFTA did not. Enforcement measures have been strengthened as has access to foreign markets. We’ve come a very long way since NAFTA.”

At the Federal Reserve, Traub and others increasingly give credence to the idea that the shifting sands of international trade, with China’s rapidly rising wages and its declines in manufacturing employment, are making America’s skilled workforce highly competitive again.

More importantly, they say, the emergence of “reshoring” -- the decision by major firms to relocate facilities back to the U.S. -- could boost Michigan’s manufacturing-based economy, and tamp down fear-mongering about trade deals with China.

“I really hope we don't throw out the baby with the bathwater and abandon all of the benefits that have been brought by increased trade,” said Ballard, the MSU economist. “If we do, we risk a global depression.”

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Comments

Roger Martin
Thu, 08/04/2016 - 10:09am
Nice reporting Bridge and Chad. I learned a lot reading this piece.
Jim Cameron
Thu, 08/04/2016 - 10:17am
Thank you for this relatively balanced article. I have one question. Early in the article you state "policies that remove tariffs and other trade barriers, creating a more level playing field." Doesn't this create a more level pay scale for American workers? "Level" with pay scales around the globe. Isn't this one of the reasons American workers are less well off, the level playing field around the globe lowers American wages.
Gene Markel
Thu, 08/04/2016 - 10:54am
The technology of Computer Numeric Control, Robotics, and Artificial Intelligence have replaced 3 out of every 5 assembly and manufacturing jobs in the US and European Automotive and other industries. These jobs are lost forever. This trend is going global and the next stop is China. The question is: What happens to the people? What kind of jobs will be available?
Jim H
Sun, 08/07/2016 - 8:33am
Walmart clerks.
Gerry
Thu, 08/04/2016 - 11:27am
The issue is not free trade, but rather trade pacts such as TPP which are anything but free. Pacts such as TPP provide large businesses with tremendous benefits, the costs of which are borne by the people. They also allow foreign businesses to negate local laws, a concept which is beyond mind-boggling. Thus, the wrath of Drumpf, and others, should be directed towards the implementation of the idea, not the idea itself.
Mary
Thu, 08/04/2016 - 2:47pm
Interesting comment (they all are, actually!). Two questions: What provision of the TPP (or other recent trade pacts) allow foreign businesses to negate local laws? What provisions of these trade pacts provide large businesses with tremendous benefits, the costs of which are borne by the people? - are you talking about job loss and lower pay scales only?
duane
Sun, 08/07/2016 - 1:30am
Mary, Do you think a person commenting on the issue of 'free trade' should be a knowledge 'expert' on each agreement or at least has read the agreements before they comment? Or do ever wonder why any of the 'free trade' agreements don't include metrics for measuring the results/impact of the implementation of those agreements? If not why not? Why should the lay person be expected to know and validate the claims either way on those agreements when the developers of those agreements avoid including the means to assess the agreement? As best I can tell the economists, those negotiating the agreements, the media, and especially the politicians don't want accountability so that is why it seems they never include or encourage the inclusion of results metrics with the 'free trade' agreements. I wonder if Charles Ballard [economist] from MSU even cares, let alone has suggested appropriate metrics for the various agreements. The reality is if there are no metrics so neither side has a credible foundations for their position. One side argues the correctness of the ideal of 'free trade' while the other side is just as correct to say the impact of the agreements implementations haven't achieved the claims of the ideal. Another morass that Hillary can be for and against and she is right while Donald can be against and for and be even more right. A simple test is do you believe Mexico is at the same level of compliance with NAFTA as the US is? If not then implementation has failed, if so the idea of 'free trade' is validated, your choice. I don't think those that complain about the campaign rhetoric on 'free trader' have solider 'ground' to base their claims on than the politicians they complain about do. My best guess is of the candidates Trump is the more likely to hold countries/businesses to the letter of the agreement, if for no other reason he has done that in his business dealings.
Jim H
Sun, 08/07/2016 - 8:38am
Duane, Excellent post.
John S.
Thu, 08/04/2016 - 11:50am
A lot of the opposition to trade agreements is psychology--loss aversion. People weigh losses far more heavily than gains. There's no argument that will persuade a factory worker who has just lost or is going to lose his/her job due to trade that free trade is a good thing. There's not a lot of discussion of jobs dependent on or job gains due to trade. Sanders, Trump, and other politicians are able to posture on the justifiable fears of some workers, whatever the facts.
George McGrath
Thu, 08/04/2016 - 11:52am
I recently heard retired GM engineers saying that while it once took 10 workers to build a car, it now takes 2. That's an 80%drop due to automation. Two others facts you could have pointed out: (1) "Only" 28% of our GDP is trade (import/export). We are basically a domestic economy and that's where the action should be. (Germany is over 80% import/export). (2) Most of our $500 billion dollar deficit is due to the strength of the US dollar. You can't have it both ways: a weak dollar would hurt us by making imports more expensive; a strong dollar makes our exports more expensive. On balance, a strong dollar is a definite plus and a $500 billion deficit is not a lot given a 2.5 trillion dollar economy. The real issue we should be focusing on is re-training programs; strengthening apprentice programs; and funding trade schools.
Charlene
Sun, 08/07/2016 - 11:13am
All good points. Thank you.
Barry Visel
Thu, 08/04/2016 - 11:53am
Great article. Wish you would have included the free trade position of the Libertarian Party, along with some analysis of potential price increases for products if tariffs and trade barriers are imposed.
Joe
Thu, 08/04/2016 - 12:13pm
What was not mentioned was the lost taxes from the profits from "US" corporations that are keeping profits offshore while Americans borrow money for a bloated US military to protect corporate overseas assets.
Renee
Thu, 08/04/2016 - 3:01pm
From the article: "These new deals have strong labor standards that benefit U.S. workers, while NAFTA did not. These new deals have environmental protections in the agreements, while NAFTA did not." This is nice and all, but labor standards do not matter now. What labor is there left to protect, since NAFTA killed so many good middle-class union jobs? Likewise, environmental standards in place now may look great, but how about cleaning up the environmental messes allowed by/created by NAFTA? What has been ruined cannot be brought back. This is too little, too late. Between free trade and technology, there are fewer and fewer jobs. At some point, there will be no jobs. So what happens to society then?
duane
Sun, 08/07/2016 - 1:43am
Renee, Are you sure they middle class jobs aren't out there if the people had the knowledge and skills needed for those jobs. It seems in the 60s and 70s we moved from a leveraged strength based economy to a leveraged knowledge and skills based economy. That move shifted the capacity to get and retain middle class jobs by helping to make an employer successful/sustainable from the employer to the employee. And it doesn't seem the potential manufacturing workers pysche has made that adjustment,
Thu, 08/04/2016 - 4:26pm
Jim Cameron: The fears that free trade would lead to a race to the bottom regarding worker's wages have proven largely unfounded, as evidenced by the dramatic wage hikes in China since they entered the WTO. American companies maintain a substantial advantage in technology, expertise and manufacturing efficiency, which is why the Federal Reserve sees the "reshoring" movement -- manufacturing facilities moving back to the U.S. -- as a significant development.
Thu, 08/04/2016 - 5:11pm
Gerry, the TPP has become a highly charged issue, with substantial opposition from Republicans and Democrats. But it's also important to note that Barack Obama is one of the trade agreements biggest champions. Another key factor is that the pending TPP is a strategic move that leaves out China, and may force the Chinese to make major economic concessions on a global basis once TPP is implemented. Again, as the story points out, post-NAFTA free trade agreements have been finely tuned and have produced, for the most part, trade surpluses. We're getting much better at this. The TPP has some flaws, as economists of all stripes recognize, but here's one piece of data that should give critics pause: the TPP would eliminate 18,000 tariffs and trade barriers.
Thu, 08/04/2016 - 5:22pm
Renee, as the story points out, NAFTA was a flawed agreement but it's net impact on U.S. jobs is probably marginal. The new trade negotiating standards applied by the U.S. since NAFTA are much more strict in terms of labor standards, environmental protections, and overall enforcement. Michigan stands to gain from that approach. It's a big wide world out there and the newer free trade agreements have benefited U.S. companies with pacts that reach from Australia to Bahrain to Costa Rica. In addition, if the 20 U.S. free trade pacts were such an overall losing proposition for American, then why has the United States set records for exporting five years in a row? Last year, we sold $2.34 trillion in goods and services abroad and the jobs involved in that mix pay more than companies that don't engage in exporting.
Thu, 08/04/2016 - 5:34pm
Mary, concerns about TPP-related lawsuits against U.S. federal, state and local governments abound, but officials involved in the negotiations say those fears are exaggerated. The New York Times reported this in May: The United States Trade Representative’s Office dismissed such concerns as overblown. Administration officials said opponents were using hypothetical cases to stoke irrational fear when an actual record exists that should soothe worries. Such “Investor-State Dispute Settlement” accords exist already in more than 3,000 trade agreements across the globe. The United States is party to 51, including the North American Free Trade Agreement. Administration officials say they level the playing field for American companies doing business abroad, protect property from government seizure and ensure access to international justice. I would also point out that your concerns about large U.S. corporations serving as the main beneficiaries of this far-reaching, 12-nation accord is questionable. For example, of the nearly 15,000 Michigan firms that export overseas, 89 percent fall into the category of small and medium-sized companies (less than 500 employees).
Chuck Jordan
Thu, 08/04/2016 - 7:35pm
I think the difference is that the mostly manufacturing jobs that were well paying union jobs that did not require a college education are gone. There may be roughly the same or more jobs today, but they require more education, pay less, and have none of the job protections that the previous economy provided. Hence, the rhetoric from Trump and Sanders. And they are right. The "new" economy is not working for most people as the middle class wage losses and <1percenters can attest to.
Observer
Thu, 08/04/2016 - 8:23pm
Chad Selweski has made an excellent conventional effort to demonstrate the value of free trade, but either he doesn't fully understand the tradeoffs involved or feels that the approach he has taken is the best way to move public opinion. A couple of centuries ago, Robert Peel, the British Prime Minister, repealed the corn laws which prohibited the import of grain. This badly hurt British farmers, but greatly benefited British consumers, whose food became much cheaper. Trade is always a matter of choosing who to benefit, producers or consumers. Producers will be hurt, sometimes badly, to the extent you benefit consumers. Is that fair? Of course not, but we are not faced with a choice between unfair and utopia, but a choice between degrees of unfairness. Producers will eventually find other work and so their distress is temporary, but the benefits to consumers are permanent. Isn't it obvious that the ongoing benefits to consumers will eventually outweigh the pain suffered by producers? Of course, the pain suffered by producers should be relieved by intensive retraining and, for middle aged and older workers, making up a large part of the difference between their old and new wages. The same holds true for our domestic economy. In 1980, nearly 400,000 U.S. workers produced 83.9 million tons of steel. In 2014, 91,400 workers produced 98.2 million tons. That is, in 1980, each worker produced 209.75 tons of steel and in 2014, each worker produced 1074.4 tons of steel. That is a productivity improvement of over five times. The resulting drop in the price of steel made it possible to buy products made of steel with fewer hours of work. That is a substantial benefit to consumers. Yes, some steel workers were hurt, but isn't it possible that the permanent benefits to consumers eventually outweighed that? And doesn't that make society as a whole better off? As I noted above, we do not have a choice between unfairness and utopia; We face a choice between degrees of unfairness. Mr. Trump maintains that buying more from another country than we sell to them is a bad deal. A view apparently shared by Mr. Selweski, who says, "Overall, 14 of the 17 post-NAFTA agreements produced net gains for the United States, generating a collective trade surplus of $85 billion, the group found." Why do they believe that? What is our situation if we export a lot of stuff to a country and buy nothing from them? We wind up with a pile of money and no stuff to use and enjoy. Yes, we could use the cash to buy the stuff we want, but wouldn't we buy it from the other country if they could make it cheaper than we could? How many people would make something for their household if they could buy it cheaper than they could make it? Isn't it better to think of our exports as the cost of buying our imports? Aren't we better off paying as little as possible for our imports? That means exporting just enough to pay for the imports we want.
Matt G
Fri, 08/05/2016 - 8:12am
I think what's being glossed over by everyone here is the "workers get hurt" thing. "Observer", you mention the increase in steel productivity but gloss over the real issue that's driving the politics here...that is, the "some steel workers were hurt" part. According to your numbers, 3/4 of steel workers have lost their jobs since 1980. How does free trade suppressing consumer goods prices replace pension contributions and mortgage payments for those 300,000 people? It may benefit the next generation but it sure isn't benefiting those workers who are trying to retire because retraining in your 60s isn't exactly feasible. This isn't anecdotal stuff...families affected by this type of job loss take on more debt in the form of student loans, credit cards, second mortgages, etc. It's an intergenerational thing. What's also lost in this discussion is that free trade accelerates the pace of change for businesses and workers. The Internet and other forms of interconnected communication are also increasing that pace. Young people can no longer choose a career and reliable pay back their student loans because they are uncertain about whether their fields of work will exist in 10-15 years. Most of this analysis would be politically irrelevant if we just decided to help each other as a country instead of leave millions of displaced workers to fend for themselves when they haven't done anything wrong. If the consensus is that free trade is a net benefit, we should simply take some of that benefit and give it to those who lose their jobs due to the national policy changes. We haven't done that and the gains have predictably gone to the top.
Rebecca P.
Fri, 08/05/2016 - 2:33pm
Yes, Matt, you are exactly right. Glossing over that "workers get hurt" thing is the key. We scrupulously protect businesses, giving them tax breaks galore, and excuse their offshoring and worker layoffs as "just a business decision." Great point about the multiplier effect of taking an income away from a family. We need a way to measure the societal impact of a breadwinner's lost job.
Renee
Sat, 08/06/2016 - 10:34am
Very well put, Matt and very, very true. As a society we are supposed to embrace "creative destruction," free trade," etc. etc. We are not supposed to care about the real, economic hurt these "wonderful" things create. Sorry, but I do care, as I have seen it up close. Matt is spot on--we do nothing to help those who have been hurt,and in fact tend to heap scorn on them for not supporting free trade, etc. The 1% has benefited; the 99% has not.
Observer
Sat, 08/06/2016 - 4:56pm
Matt says, " If the consensus is that free trade is a net benefit, we should simply take some of that benefit and give it to those who lose their jobs due to the national policy changes." I absolutely agree with him. Perhaps he, and the other people who replied to my post, failed to read what I said about that. "Of course, the pain suffered by producers should be relieved by intensive retraining and, for middle aged and older workers, making up a large part of the difference between their old and new wages." He is mistaken when he says, "the gains have predictably gone to the top." That is not the case. Competition competes away excess profits and lowers prices which benefits ordinary consumers. But he is correct when he says that the increasing pace of change is disruptive. But it is likely that that disruption will be compensated for by significantly higher standards of living. It has been reliably estimated that, on current trends, the people in the year 2100 will be five to seven times wealthier than we are. There may be a substantial price to be paid for that progress, but think of the difference that increase in real incomes will make in terms of human welfare.
Lawrence Redmond
Wed, 08/10/2016 - 3:25am
They forget to add the 250,000 plus good paying Michigan manufacturing jobs that went to Mexico and China after the NAFTA, and Clinton granting China Most favored nation trading status into their formula.. Just think how much better we would be doing in the world economy,, if we still had all those jobs, and Michigan residents making the good money they provided.
Wed, 08/10/2016 - 6:38pm
How did multi-national corporations accumulate $14 Trillion off shore and why? Drive down 14 Mile Road (not Detroit but just as vacant as Detroit's older production facilities) and view the economic devastation. Those feeder shops are not closed because of automation. They close and Chnese companies buy up the equipment and ship it to China. S. Korean workers make $350 and hour, yet Obama claims that high paying export jobs will result, Sorry Chad, Americans aren't buying the FTA sales pitch. P.S. Youtube Don Riegle and Greenspan on free trade. Bonior was right, and I formally apologize.