NCPA - National Center for Policy Analysis


November 13, 2009

Nobody wants to lose their job involuntarily, but newspaper stories that imply a connection between trade and the lost jobs need to be read in perspective, says Daniel Griswold, director of the Center for Trade Policy Studies at the Cato Institute. 

Indeed, the large majority of Americans who lose their jobs each year are not displaced by trade.  Technology is the great job disrupter, but Americans also lose their jobs because of domestic competition, changing consumer tastes, and recessions, says Griswold:

  • For every person who loses their job because of globalization, there are 30 who have lost their jobs for other reasons.
  • Many newspaper workers have lost their jobs because of the Internet.
  • Some 30,000 workers were laid off by Kodak in the past five years because of the spread of digital cameras and plunging film sales.
  • Many book stores and record stores have shut down and laid-off workers because of and iTunes.

Trade is not a cause of higher unemployment nationwide, either, says Griswold:

  • Imports have fallen sharply during the latest recession along with the trade deficit.
  • In contrast, imports were rising at double-digit rates when the unemployment rate was below 5 percent.

Like technology, trade can put people out of work, but it also creates new and generally better paying opportunities for employment, while raising our overall standard of living, says Griswold.

Source: Daniel Griswold, "Trade Wrongly Blamed for Unemployment," Cato Institute, November 10, 2009.

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