In spite of being one of the most discussed issues of the 2016 presidential campaign, the Trans-Pacific Partnership (TPP) is, surprisingly, one of the few things upon which both major party presidential candidates agree. A contentious issue during both the Republican and Democratic primaries, the TPP is still opposed by both Donald Trump and Hillary Clinton, largely in an effort to protect domestic industry. However, while many of the candidates’ concerns with the TPP – and free trade in general – are by no means invalid, their proposed solutions are off the mark.
Both candidates have focused on the TPP’s potential job-killing effects and vowed to protect American manufacturers by stopping the treaty’s ratification. What the candidates fail to tell voters is that simply stopping the TPP will do little to help individuals who have been hurt by free trade. Whether the US ratifies the treaty or not is of little consequence; free trade is here to stay. According to economists David Autor, David Dorn, and Gordon H. Hanson, “Halting TPP would not assist U.S. manufacturing or benefit U.S. workers. The reality is that the globalization of manufacturing is a fait accompli.” Instead of lamenting the spread of globalization, the candidates should be putting forward robust policy agendas geared at protecting those who free trade has left behind (and it has left behind many).
Concerns about the effect of free trade on the labor market, however, have a strong basis in reality. According to Autor, China’s entry into the World Trade Organization (WTO) in 2001, which precipitated a huge influx of cheap Chinese goods into the US market, has led to the loss of around one million American manufacturing jobs. A study by Justin R. Pierce and Peter K. Schott delves deeper into this issue and concludes that the loss of these jobs was, indeed, caused by an increase in trade between the United States and China. No matter where one stands on trade, acknowledging the loss of manufacturing jobs due to increased economic globalization as a huge problem for millions of Americans and as something that should be addressed more effectively by our leaders remains important.
Even with these negative consequences, though, free trade has done much to improve the lives of Americans. In fact, most economists agree that free trade has done more to benefit Americans than it has to harm them. For example, the abundance of inexpensive consumer goods as a result of increased free trade greatly benefits low-income families, and free trade has increased the productivity of high-skilled workers in the U.S. It is also important to note that the one million manufacturing jobs lost as a result of increased trade with China were accompanied by the loss of an additional four million jobs due to increased automation. In spite of this, neither of the major candidates have declared a war on automation. Furthermore, despite the abundance of protectionist rhetoric coming from both sides of the aisle this cycle, more Americans favor free trade than oppose it.
The problem facing working-class Americans is not globalization, but rather the unwillingness of politicians to help them prepare for competition in the modern world economy. Convincing a laid-off factory worker to vote for you by blaming her plight on NAFTA is easy; facing the reality of globalization and drafting policies that will actually help people like her remains much harder.
One short-term solution to the rise in unemployment caused by trade would be to put working-class Americans back to work through public works programs geared at modernizing our infrastructure. However, while this would do a great deal to alleviate the pain inflicted by outsourcing on communities that have been forced to rely on manufacturing as their main source of employment, it is not a viable long term solution.
By contrast, a long-term solution to those impacted by trade is grounded in education. One of the best ways to eradicate the downsides of trade is to prepare the next generation of working class Americans for careers in high-skilled industries. To her credit, Secretary Clinton’s education plan, which would allow families making less than $120,000 per year to send their children to four-year, in-state public colleges free of charge, is a big step in the right direction and will give millions of low-income Americans access to well-paying jobs. Although this is a good start, paths to making public universities tuition free for all Americans should be explored.
However, while subsidizing higher education is important, many public schools — particularly in poor areas — simply do not give their students the skills required to attend college. In order to fix our public education system, we must reexamine the way in which public K-12 education is financed. The current system of funding public schools through property taxes only exacerbates inequality and leaves many low-income students behind. School districts with more affluent residents currently spend far more on education than districts with poorer residents. Without proper education, low-income communities are forced to rely on low-skilled jobs and are thus the hardest hit by outsourcing.
While radical changes to our education system are important, more can be done to protect Americans hurt by globalization. In the coming decades, the U.S. will, most likely, continue to lose millions of jobs due to outsourcing and increased automation of many low-skilled professions. While a focus on job creation is good in the short run, it is important that we acknowledge the possibility that losses in low-skilled jobs will begin to outpace the creation of jobs in other sectors. To counter these trends, it may be necessary in the future to examine policies such as a guaranteed basic income and a shortening of standard work weeks in order to complete the transition into a modern economy. These policies have significant pockets of support on both the left and the right and, if properly researched and implemented could be key to helping the U.S. smoothly transition into a 21st century global economy.
Instead of avoiding globalization, politicians should be examining the underlying issues that cause an unequal distribution of the benefits of free trade and put forward policy proposals that will help eradicate them. While free trade may exacerbate inequality and negatively affect working-class communities, these negative consequences are a symptom of larger, structural problems within the U.S. economy that have caused the deck to be stacked against working class Americans. It’s time for our politicians to get serious about solving these problems.