Class #23 "The Effect of Trade on Jobs" (10/26/2011)

The Effects of Trade on Jobs
Trade doesn't cost jobs, it changes the types of jobs in the economy.

• Sources of job loss from trade:
• Outsourcing
• Technology (Replacing human labor with machines)
• The workers who lose their jobs from trade were the first to initially benefit from trade.
• No evidence suggests long term gains from adjustment training laid off workers.

If you want to argue that trade costs jobs, technology is the biggest job killer in history.
Trade Statistics (are meaningless, but make for great theater): If we buy more from China than we sell to China, we are running a trade deficit. In reality, we have a service surplus and a goods deficit with China.
Trade deficits don't effect the number of jobs, but the types of jobs distributed in an economy.

The popular belief that America does not make anything anymore is wrong, manufacturing output (Despite the fact that a less percentage of the job forces works in manufacturing) has been steadily increase since the 1940's.

-Rizzo

Daniel Gaona/Max