links for 2008-03-01
How Large Is the Depressing Effect of Increased Trade on the Wages of Blue-Collar Americans?

Robert Reich on NAFTA

He writes:

Robert Reich's Blog: Hillary and Barack, Afta Nafta: It’s a shame the Democratic candidates for president feel they have to make trade – specifically NAFTA – the enemy of blue-collar workers.... NAFTA is not to blame.... When NAFTA took effect, Ohio had 990,000 manufacturing jobs. Two years later, in 1996, it had 1,300,000 manufacturing jobs. The number stayed above a million for the rest of the 1990s. Today, though, there are about 775,000 manufacturing jobs in Ohio.

What happened? The economy... crashed in late 2000, and the manufacturing jobs lost in that last recession never came back... employers automated the jobs out of existence, using robots and computers... [and] shipped the jobs abroad, mostly to China – not to Mexico.

NAFTA has become a symbol for the mounting insecurities felt by blue-collar Americans. While the overall benefits from free trade far exceed the costs, and the winners from trade (including all of us consumers who get cheaper goods and services because of it) far exceed the losers, there’s a big problem: The costs fall disproportionately on the losers -- mostly blue-collar workers who get dumped because their jobs can be done more cheaply by someone abroad who’ll do it for a fraction of the American wage.... Even though the winners from free trade could theoretically compensate the losers and still come out ahead, they don’t. America doesn’t have a system for helping job losers find new jobs that pay about the same as the ones they’ve lost – regardless of whether the loss was because of trade or automation. There’s no national retraining system. Unemployment insurance reaches fewer than 40 percent of people who lose their jobs.... There's no wage insurance. Nothing....

Get me? The Dems shouldn't be redebating NAFTA. They should be debating how to help Americans adapt to a new economy in which no job is safe. Okay, so back to my initial question. The answer is HRC didn't want the Administration to move forward with NAFTA... because of its timing. She wanted her health-care plan to be voted on first...

There are other, secondary causes of declining numbers of manufacturing jobs in Ohio. The Bush budget deficits certainly don't help.