Voters are most likely move to the far right or the far left politically if their hometowns have been ravaged by freer global trade, according to a study.
That’s one of the explanations for the groundswell in support for Republican frontrunner Donald Trump, a party outsider who has made unfair trade a central theme of his presidential campaign, and for Sen. Bernie Sanders, an independent who has a long history of voting against free-trade deals.
“It’s not about incumbents changing their positions, it’s about the replacement of moderates with more ideological successors,” says David Autor, a leading scholar of labor economics and trade at the Massachusetts Institute of Technology who spoke with The New York Times about his study of voting patterns
. “Whether it’s Trump or Sanders, we should have seen in it coming."
His study found that areas suffering the most from factory closings and job losses were more likely to move to political extremes.
One such area is Alabama’s Fifth Congressional District, which has moved rightward as the apparel industry collapsed following China’s entry into the World Trade Organization in 2001.
Nearly 10,000 manufacturing jobs disappeared in the region, and the unemployment rate is 7.4 percent, compared with the national average of 5 percent, according to the NYT. Employers like International Paper closed their factories, while steelmaker Nucor is still hanging on in the face of possible competition from China’s vastly overbuilt steel industry.
“China and the W.T.O. represented a shock that was way larger,” Autor told the NYT. “We hadn’t seen shocks like this because we were trading with rich countries, not highly productive developing countries with enormous labor reserves.”
Still, most economists say free trade is beneficial to people whose spending power increases with lower-cost goods flooding the aisles of Wal-Mart and Kmart. Other critics say China manipulates its currency to keep its goods artificially cheap.
The benefit of free trade is “10 times the size of the losses,” Gary Clyde Hufbauer, a senior fellow at the Peter G. Peterson Institute for International Economics in Washington, told the NYT. “Free trade really helps working-class people in terms of lower prices for products. The benefits are skewed toward people with lower income because they spend a much larger fraction of their income on merchandise.”
Trump’s arguments against trade deals have targeted U.S. companies like Ford and Carrier for moving jobs to other countries. Sanders has opposed trade deals from the North American Free Trade Agreement in 1993 to the Trans-Pacific Partnership negotiated by the Obama administration. Democratic frontrunner Hillary Clinton flip-flopped on the 11-nation TPP.
Voters need to reconsider the many benefits of free trade and understand how technology and innovation disrupt the labor market, says Alan Wolff, a lawyer at Dentons Llp who is chairman of the National Foreign Trade Council. He worked in U.S. trade agencies for the Nixon, Ford and Carter administrations.
“Politicians are reluctant to talk about the real causes of income inequality, and negatively talk about trade agreements instead,” Wolff writes in Fortune magazine
. “It’s time to stop blaming trade agreements and ignoring other causes of job loss if we’re ever to figure out what to do about the real problems that exist.”
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