A common narrative we hear from the news media this election cycle is that Donald Trump has become popular by tapping into anti-trade sentiment among blue collar workers “on the losing side of trade globalization.” The basic premises of this narrative are that (1) trade has harmed a large segment of the U.S. population and (2) those people are voting for Trump. But neither one of those premises is true.
The narrative has been fueled by a paper released earlier this year by economist David Autor, David Dorn, and Gordon Hanson titled “The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade.” The paper has gotten a lot of attention from people on all sides of the trade policy debate.
The key finding of the paper is best summarized by this sentence from the abstract: “At the national level, employment has fallen in U.S. industries more exposed to import competition, as expected, but offsetting employment gains in other industries have yet to materialize.” The idea is that trade with China has been so disruptive that many people who lost their jobs due to increased imports from China have not been able to find new work.
Last week, the Wall Street Journal posted a long article tying the picture painted by the Autor, et al. paper to “disillusionment with globalization” and ultimately support for Donald Trump.
What happened with Chinese imports is an example of how much of the conventional wisdom about economics that held sway in the late 1990s, including the role of trade, technology and central banking, has since slowly unraveled.
The aftershocks are sowing deep-seated political discontent this election year. Disillusionment with globalization has fed one of the most unconventional political seasons in modern history, with Bernie Sanders and especially Donald Trump tapping into potent anti-free-trade sentiment.
It’s understandable that journalists would be attracted to the idea that Trump’s rise fits into broader storylines about economic change and inequality. But there are a number of reasons why the narrative just doesn’t make sense.