Politicians commonly blame imports for throwing millions of Americans out of work. If you don’t believe me, check out what Hillary Clinton and Barack Obama both said about trade in their post-Wisconsin-primary speeches Tuesday night.
It’s true that a certain number of Americans lose their jobs each year because of import competition, but the number is small compared to the overall size and underlying churn of the U.S. labor market. And jobs lost from import competition are more than offset by jobs created elsewhere in the economy. And if you don’t believe that, check out my recent Cato study, “Trading Up.”
Adding to the evidence, the recently published Economic Report of the President 2008 contains a nifty graph on page 94. It shows that during the past 25 years, as imports have been trending inexorably up as a share of our economy, the unemployment rate has been trending DOWN.
As the graph’s own caption concludes, “Over the long run, there is little connection between increased imports of goods and services and the strength of the labor market.”