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In the words of USA Today, trade and globalization take center stage today as presumptive Republican presidential nominee Donald Trump “makes appearances in western Pennsylvania and eastern Ohio, seeking votes in areas that have seen job reductions in steel, coal and other heavy industries.”
The candidate’s stops will include Monessen, Pennsylvania, south of Pittsburgh, as well as St. Clairsville, Ohio, in the eastern part of the Buckeye state.
Trump is expected to reprise a theme he invoked in a June 22 speech in New York: “We got here because we switched from a policy of Americanism, focusing on what’s good for America’s middle class, to a policy of globalism… This is a wave of globalism that wipes out our middle class and our jobs along with it.”
Trade is no panacea. Some workers lose their jobs to international competition, just as technological change and shifting consumer tastes regularly put some manufacturers out of business. It’s appropriate for the federal government to provide these workers with training and transition assistance — and of a better quality than current federal programs.
But contrary to rumor, the benefits of trade greatly outweigh the costs. In fact, trade has been a lifeline for many more workers in Pennsylvania and Ohio — especially in the wake of the recession.
Not only does trade support more than 3.1 million jobs in the two states, it’s fueled the economic recovery. This is especially true of trade with America’s trade agreement partners, which purchase 49 percent and 60 percent of Keystone and Buckeye state exports, respectively. These 20 countries are the leading destinations for U.S. exports despite the fact that they represent just 6% of the world’s population.
Pennsylvania exports rose 45 percent in 2009-2013, and Ohio’s grew by 49 percent. (U.S. exports have slipped slightly over the past two years on weak economic growth abroad.)
The labor-funded reports that ascribe manufacturing job losses to America’s trade agreements couldn’t be more wrong: Trade agreements haven’t been the problem for U.S. manufacturers. Rather, properly crafted, they can be a part of the solution.
David Ignatius of the Washington Post recounts his own perspective from his first reporting job in Pittsburgh in the late 1970s, when foreign competition began to challenge the U.S. steel industry. In the face of rising competition in the 1980s and early 1990s, the industry shrank, and steel jobs vanished. According to Ignatius:
But over time, the disruptive whirlwind of change created new jobs and greater incomes, thanks to dynamic new businesses that spun up around the University of Pittsburgh Medical Center and Carnegie Mellon University.
Census Bureau data show that in the Pittsburgh metropolitan area, per-capita incomes roughly doubled from the beginning of steel’s downturn in 1978 to 2014. In inflation-adjusted constant dollars, average personal income rose from $23,239 in 1978 to $45,231 in 2014. Over that time, average incomes in the Pittsburgh area grew faster than in Pennsylvania and the United States as a whole.
It bears repeating: The vast majority of Americans benefit from international trade and investment, but the Chamber has long acknowledged that some are hurt — and they should be helped.
Business has a big role to play, and companies are already making a major contribution by investing in training and development across the U.S. workforce. The Association for Talent Development estimates that U.S. businesses spent $164 billion on employee learning and development in 2012, or about $1,200 per worker.
But there’s more that can be done. Government and business must work together to ensure that displaced workers are retrained and can transition to new work.
It’s all food for thought for voters in Pennsylvania, Ohio, and the rest of the union as we head to the polls this year.