Manufacturing jobs, China and globalization are obviously playing a bigger role in this U.S. presidential election.
Both Hillary Clinton and Donald Trump, for example, are publicly more skeptical of trade. Both say they oppose the Trans-Pacific Partnership trade agreement, and Trump has called for 45 percent tariffs against China.
Now comes new research saying that trade with China has actually made the United States more politically polarized.
Research from university economists in the United States, Switzerland and Sweden found that U.S. Congressional districts it labeled as “trade-exposed,” became more politically extreme between 2002 and 2010.
Those districts were the ones most economically impacted by globalization. It found that in those Congressional elections, Democratic districts moved more left, Republican districts moved more right, and overall, Republicans benefited more.
“The consequence of an increase in import competition from China is a substantial rightward shift accompanied by increased political polarization,” the researchers said.
“Growing import competition from China has contributed to the disappearance of moderate legislators in Congress, a shift in congressional voting toward ideological extremes, and net gains in the number of conservative Republican representatives, including those affiliated with the Tea Party movement,” it said.
Chinese exports surged in that period, from 4.8 percent of global manufacturing exports in 2000 to 15.1 percent in 2010, the study said.
In 2001, China joined the World Trade Organization, and in 2010, U.S. politics saw the rise of the populist and right-leaning Tea Party movement, the authors note.
The paper says that shift in Congress foreshadows the polarized and pessimistic tone of this year's presidential race.
As another study this year from some of the same economists , including David Autor at the Massachusetts Institute of Technology, notes, the United States lost 5.8 million manufacturing jobs between 1999 and 2011.
But that study, titled “The China Shock,” says that only about 10 percent of that — 560,000 jobs — can be traced to competition from China.
I think that's important because there are more than trade deals, or competition from China, at work. Technological changes and automation play a big part too.
For example, some scholars argue that most of the job losses in the U.S. steel industry have come from technological change. One study from the Heritage Foundation said tariffs on imported steel cost 200,000 jobs in U.S. companies that use steel. The problem for those who've lost jobs, the study says, is that “offsetting gains,” i.e., jobs to replace those lost, have “for the most part, failed to materialize.” It seems obvious to me that's where voter anxiety comes in.
When I hear politicians talk about job losses, trade and technology, I think about how technology is also disrupting my own profession, journalism.
Let's take a look at daily newspapers, the sector that's been most impacted. In 2007, there were 55,000 jobs at daily newspapers in the United States, a figure that had held steady for 20 years. In 2015, there were 33,000 jobs. Disruption from social media and the web is an important reason. Local newspapers used to make a lot of money on classified ads, as one example. Now, if you want to sell a car or advertise a garage sale, you use Craigslist, for free.
It's better for the average person. But it's not good for the media outlet that used to have a good revenue stream from those ads.
I don't know the big answer regarding manufacturing jobs. Part of my agnosticism comes from living in China for several years . Since I've returned to the United States, I hear political candidates regularly complain about unfair trade competition. I'm glad manufacturing is getting more attention in U.S. politics, and there could be ways to make trade deals better. But the issues are complex.
In the case of China, there are some very solid Chinese competitors, and they have an advantage in that so much manufacturing has developed there.
While there are big costs from that rapid growth — including severe pollution, stemming partly from weak regulations — China is now the world's largest single market for plastics. It's only natural that globally competitive firms will emerge from that competitive domestic market.
Before the last K show, in 2013, I remember talking with the export sales manager for a large Chinese injection molding machine maker.
We were chatting casually about where they would stay in Düsseldorf for the notoriously expensive K show, and I remember her saying her company had rented apartments employees would share, and staff would take turns cooking meals, for a cost of about $60 a night, per person.
That willingness to find a low-cost way to exhibit at the K fair, the world's biggest plastics show, could be one way a Chinese firm has a cost advantage.
It seems like no matter who wins the presidential election, U.S. trade policy will change in response to these new conditions. How much and what shape that takes, I can't say.
But I hope we avoid simplistic solutions that blame one factor too much, like trade, and ignore others, like automation. Otherwise I think people will be disappointed with the solutions.
