Saturday, November 4, 2017

Imports are not very much to blame for the job losses

From Cafe Hayek.

"from pages 117-118 of the 2015 Fourth Edition of Dartmouth economist Douglas Irwin’s superb book, Free Trade Under Fire (footnote deleted):
How much are imports to blame for the job losses experienced in any given year? Not much. Changes in consumer tastes, domestic competition, productivity growth, and technological innovation, in addition to international trade, all contribute to the churning of the labor market. It is virtually impossible to disentangle all of the reasons for job displacement because they are interdependent: for example, technological change may be stimulated by domestic or foreign competition. Yet to the extent that such attributions are made by the [United States] Bureau of Labor Statistics, trade is a tiny factor in the displacement of labor. As table 4.1 shows, import competition and overseas plant relocations accounted for about 3 percent of total employment separations due to mass layoffs in recent years. During the recent Great Recession, layoffs topped two million in 2009, but less than 1 percent of those job losses were due to import competition. In fact, study after study has confirmed that the trade-induced number turnover in U.S. labor markets is small in comparison with the overall turnover."

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