Is Free Trade Bad for American Workers?

[Valin]

Townhall:

John C. Goodman

Mar 12, 2016

 

Since the time of Adam Smith, economists have understood that free trade is good for countries as a whole.

 

Of course, trade creates winners and losers. The most common opinion expressed on TV talk shows and in the current presidential campaign is that the winners are on Wall Street and the losers are ordinary people.

 

However, the latest research suggests the opposite is true. The biggest winners from free trade are in the bottom half of the income distribution. What’s more, these gains are so large that if real income were measured properly, inequality in the US has been falling not rising – precisely because of increased trade.

 

The argument for trade is straight forward. Trade is ultimately the trade of goods for goods. In any voluntary exchange, both parties are made better off. Both give up something they value less for something they value more.

 

(Snip)

 

More trade also means lower prices for the consumers of imported goods. A study by the (union funded) Economic Policy Institute, concludes that 400,000 US jobs were eliminated or displaced between 2001 and 2013, because of Walmart, the nation’s largest retailer and biggest importer.

 

Even if we accept this estimate, it completely ignores the upside. Millions of American’s are paying less for goods at Walmart than they otherwise would have paid. That means their incomes stretch farther. That means their standard of living is higher.

 

(Snip)

[Valin]

 

Thanks to Bernie Sanders and Donald Trump, a lot of attention has been given to the job losses. Almost no attention has been given to the job gains or to the increase in our standard of living.

 

As for the Job Loss a small tale

 

In 1997 I started working for Donaldsons co inc. making filter media. On an average shift I was processing around 3,000 ft, fast forward to (say) 2009 my buddy Dan and I were processing around 30,000 ft a shift, cheaper and higher quality. This is just one example of where the jobs have gone.

 

 

Addendum: I've spent my whole working life on the factory floor making stuff, let me tell you a hard cold fact, these jobs....they suck! They are mind numbingly boring, often dangerous, in other words...They Suck.

 

 

the days of being able to make a good living with a strong back and and a weak mind are gone...and good riddance!

[kevindavis]

In all fairness factory jobs is going to be gone in 10 - 15 years due to automation.

[kevindavis]

 

 

Thanks to Bernie Sanders and Donald Trump, a lot of attention has been given to the job losses. Almost no attention has been given to the job gains or to the increase in our standard of living.

 

As for the Job Loss a small tale

 

In 1997 I started working for Donaldsons co inc. making filter media. On an average shift I was processing around 3,000 ft, fast forward to (say) 2009 my buddy Dan and I were processing around 30,000 ft a shift, cheaper and higher quality. This is just one example of where the jobs have gone.

 

 

Addendum: I've spent my whole working life on the factory floor making stuff, let me tell you a hard cold fact, these jobs....they suck! They are mind numbingly boring, often dangerous, in other words...They Suck.

 

 

the days of being able to make a good living with a strong back and and a weak mind are gone...and good riddance!

 

 

I had a grandfather worked in factory and he barely made a living.

[Valin]

The Rise of American Protectionism
Richard A. Epstein
Monday, March 14, 2016

The wedge issue of the 2016 primary campaign is the rising hostility to free trade—and, specifically, to the Trans-Pacific Partnership. On the Republican side, establishment candidates like Jeb Bush, Scott Walker, and Marco Rubio have failed or fallen behind, while Donald Trump maintains a commanding lead going into Florida and Ohio thanks, in large part, to his protectionist rhetoric. On the Democratic side, Hillary Clinton has been veering leftward to fight off a determined challenge from Vermont’s democratic socialist Bernie Sanders, another unapologetic protectionist.

 

There are of course major difference between the insidious Trump and buffoonish Sanders. The former, for example, favors low taxes and the latter confiscatory ones. Still, the real selling point of each boils down to one issue: In the indecorous language of the pollster, Pat Caddell, Americans feel “they have been screwed” by free trade. Caddell writes as if this virulent falsehood is an undisputed fact. What is undisputed, however, is that Adam Smith’s defense of free trade is in retreat as protectionism becomes the common thread across the both political parties. It is as though the economic unwisdom of the 1930 Smoot-Hawley Tariff Act is back. The question is why protectionism is having a political moment.

 

One answer is that things have not gone well in the United States. Standards of living have been static at best, and people feel economically insecure. In this environment, it is easy to blame the obvious culprits, like the tide of imports and the systematic movement of American jobs overseas to locations where the regulatory environment is more favorable and where the cost of labor is cheaper.

 

But putting the story in this fashion conceals the key benefit of free trade....................(Snip)