A new study revisits the impact of the 'China Shock' on American communities, finding that while places have largely recovered, individuals displaced by manufacturing job losses continue to struggle. The study highlights the limitations of traditional economic models in predicting the real-world consequences of free trade and underscores the need for greater government intervention to support affected communities.
By now, many economists are hoarse screaming that higher tariffs and a trade war will raise prices and hurt the U.S. economy.by Quinnipiac University, conducted in late January, found that 42% of Americans believe tariffs will help the U.S. economy. The United States' recent history with free trade might help explain the disconnect between economists and a large swath of the American public.
The economists, as well as others in their wake, also found that the broader communities hit by the China Shock suffered enormously. They saw higher unemployment rates. They saw declines in wages and in upward mobility.
But it's not like no one saw the destruction coming. In 1999, there were violent protests in Seattle against the World Trade Organization. Labor unions were shouting from the rooftops that foreign competition was devastating for their members. And politicians like Bernie Sanders, Ross Perot — and, yes, Donald Trump, then running to get the presidential nomination of the Reform Party — vociferously opposed the bipartisan free trade movement.
A bedrock theory in economics has been the theory of comparative advantage, which basically says"free trade among consenting nations raises GDP in all of them," Autor says. And, we should say, that may still be true. Autor and his colleagues' research focuses on how manufacturing workers and their communities adjusted to the trade shock. They don't look at the overall costs and benefits of free trade with China., who got access to a massive new market for their goods.
Instead of moving to new sectors or places, manufacturing workers either dropped out of the labor force or clung to jobs in their dying industries. Even those who were able to keep jobs in declining manufacturing businesses still suffered. They saw their wages stagnate and their opportunities for upward advancement disappear.
Business Trade CHINA SHOCK FREE TRADE TARIFFS ECONOMIC IMPACT MANUFACTURING JOBS
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Lingering Impacts of Trade War with China Still Felt in UtahThough many may have forgotten, the impacts of the trade war with China in 2018 and 2019 still linger in Utah. In response to tariffs levied by President Donald Trump, China imposed retaliatory tariffs on U.S. agriculture that remain in place. Experts warn that tariffs are blunt instruments that hurt both the economies imposing them and those on which they are imposed. While some argue tariffs can be a negotiating tool, the potential consequences of a renewed trade war remain a concern.
Read more »
10 Best Potential Heroes for DCU's Teen Titans, RankedStatic Shock surfing on a disc in a promo for Static Shock
Read more »
Small Businesses in LA Face Lingering Damage from WildfiresThe Los Angeles wildfires have devastated not only residential areas but also small businesses, leaving many struggling to recover. Even those whose storefronts remain standing face mounting repair costs, loss of revenue, and the emotional toll of disaster.
Read more »
California Wildfires Fuel Economic Uncertainty Amidst Lingering Pandemic RepercussionsThe recent devastating wildfires in and around Los Angeles exacerbate existing economic challenges in California, including a high unemployment rate and a shrinking workforce. Governor Newsom's budget acknowledges the potential impact of these disasters on state finances and highlights other looming threats, such as a potential return of Donald Trump to the presidency and its associated economic policies.
Read more »
The Lingering Shadow of 'Triple': Can Ryan Day Overcome Harbaugh's Insult?A columnist's seemingly innocuous question about the impact of the expanded playoff reignites the memory of Jim Harbaugh's infamous 'triple' comment directed at Ryan Day three years ago.
Read more »
The Lingering Shadow of Survivor's Guilt in the Wake of the Los Angeles WildfiresThe devastating wildfires that ravaged Los Angeles have left behind a trail of emotional devastation, with many residents grappling with survivor's guilt. The text explores the complex emotional landscape of those who have lost everything and those who have seemingly emerged unscathed, highlighting the struggle to reconcile personal safety with the widespread suffering.
Read more »