April 27, 2016
Sorry couldn’t resist, but the lecture on why we should not care about manufacturing jobs from Eduardo Porter brought it out in me. Porter makes many valid points. Manufacturing has been declining as a share of total employment in the United States for half a century. The same is happening almost everywhere else in the world. And, he’s right that the main cause has been productivity growth.
But that doesn’t change the fact that the huge explosion in the trade deficit in the decade following 1997 led to a collapse of manufacturing unemployment. This drop in employment had a huge impact on large segments of the workforce.
Manufacturing Employment
Source: Bureau of Labor Statistics.
The surge in the trade deficit, which did not have to happen (i.e. it was the result of policy) and could be reversed, cost 20 percent of manufacturing employment in a very short period of time. It is reasonable for politicians to talk about this policy even if the pundits don’t like it.
The other point is that opponents of “walls” should pay attention to patents. These are not god-given or natural features of the market. U.S. policy has been focused on making patent and copyright protection longer and stronger for the last four decades. To engage in this sort of policy and then wonder why income is being redistributed upward is a bit like filling a body with bullets and then wondering why the person is dead.
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