It would be so easy to read Howard Schneider’s article in this morning’s Washington Post on trade policy’s impact on the U.S. economy and conclude that it’s been at worst a wash and at best a force for enhancing the economy’s efficiency that’s as necessary as it is painful for many individual workers. And in part because Schneider’s piece is so mindlessly evenhanded and in part because this supposed big think article misses vast forests for the trees, this conclusion would be completely misleading.
To his credit, Schneider includes not only public policy decisions but trade policy decisions in his examination of the decline in manufacturing employment and prospects for re-creating major middle class employment. At least, therefore, he indicates to readers that significant roles have been played in manufacturing job loss by deliberate decisions made by American leaders, not simply by impersonal and/or inevitable historical forces usually described with the catchall term “globalization.”
The problem is the author’s unmistakable determination that, over the long haul, anyway, changes that are disastrous for U.S. workers and their families either taken individually, or in entire industries or generations, are part of that vast economic ebb and flow that ultimately creates something better. Thus Schneider’s reference to “a multinational corporation adds a factory shift or transfers workers overseas.”
>And to how an appropriately “nuanced” view of globalization recognizes that “auto jobs that went to Canada and Japan…have since come back to Mississippi and Texas” thanks to the investments of foreign transplants.
>And to “the sense” that ”the downside” of globalization has “fallen disproportionately” on “older employees with skills who may be out of step with the current labor market” even though it also creates or spotlights opportunities in other booming, more advanced sectors.
>And to how so many manufacturing jobs have been displaced not by offshoring or simple import competition, but by labor-saving technologies needed for greater efficiencies.
Even worse is that much of the evidence to the contrary was compiled by Schneider himself. Take his detailed descriptions of how the corporate drive for greater efficiencies has sharply limited manufacturing’s job growth even during the current recovery. Of course the greater technological sophistication and thus higher productivity of domestic manufacturers means that ever more output can be generated with fewer workers.
But as the article itself notes, from the implementation of the North American Free Trade Agreement – which many analysts argue launched the current, offshoring-focused era of U.S. trade policy – through 2012, more than 2.7 million Americans have qualified for a major federal re-employment aid program (Trade Adjustment Assistance) reserved for employees whose jobs have been “lost or threatened by trade.” Nearly all have been manufacturing workers.
Labor Department data accessible in minutes show that, from NAFTA’s January, 1994 starting point through the end of 2012, the U.S. economy shed 4.89 million manufacturing jobs on net. So the federal government itself has officially acknowledged that trade flows – which are of course significantly affected by trade policies – are responsible for more than half of domestic industry’s employment reductions. And the true number is far higher, since it’s well established that not all workers harmed by trade know of the program and their eligibility for it.
Finally, despite its length, Schneider’s analysis is inexcusably blinkered. He portrays “U.S. political support for freer trade around the world” as resulting from “a recognition that, even if more open global markets make the world as a whole better off, the benefits will not be evenly distributed. There will be winners and losers.” “The upside,” he continues, “for some countries and for some U.S. companies and workers has been palpable – tens of millions lifted from poverty as the world’s production of clothes and cars and computers has been distributed around the planet; bigger markets for U.S. goods.”
In the narrowest sense, of course, Schneider is simply wrong to suggest that whatever greater export opportunities have been created by U.S. trade policies have even come close to balancing out the import flood fostered. Record, still-growing American trade deficits in manufactures and, more broadly, in goods except for oil, amount to the irrefutable proof.
More broadly, U.S. trade policies have indeed benefitted large numbers of workers abroad, including in developing countries. But as I’ve explained in a previous post and elsewhere, the income losses for Americans led Washington to fill their resulting living standards gaps with easy money, and helped trigger the global financial crisis that has harmed the economies and prospects of all countries, rich and poor.
All of which raises an important, and disturbing question. If Mainstream Media reporters can’t bring themselves to recognize that current U.S. trade and related international economic policies have been net losers for much of the world economy as well as for the American economy and U.S. workers, even when the evidence for the latter literally is staring them in the face thanks to their own research, can they ever do so?