Skip to main content
Menu

Main navigation

  • About
    • Annual Reports
    • Leadership
    • Jobs
    • Student Programs
    • Media Information
    • Store
    • Contact
    LOADING...
  • Experts
    • Policy Scholars
    • Adjunct Scholars
    • Fellows
  • Events
    • Upcoming
    • Past
    • Event FAQs
    • Sphere Summit
    LOADING...
  • Publications
    • Studies
    • Commentary
    • Books
    • Reviews and Journals
    • Public Filings
    LOADING...
  • Blog
  • Donate
    • Sponsorship Benefits
    • Ways to Give
    • Planned Giving

Issues

  • Constitution and Law
    • Constitutional Law
    • Criminal Justice
    • Free Speech and Civil Liberties
  • Economics
    • Banking and Finance
    • Monetary Policy
    • Regulation
    • Tax and Budget Policy
  • Politics and Society
    • Education
    • Government and Politics
    • Health Care
    • Poverty and Social Welfare
    • Technology and Privacy
  • International
    • Defense and Foreign Policy
    • Global Freedom
    • Immigration
    • Trade Policy
Live Now

Cato at Liberty


  • Blog Home
  • RSS

Email Signup

Sign up to have blog posts delivered straight to your inbox!

Topics
  • Banking and Finance
  • Constitutional Law
  • Criminal Justice
  • Defense and Foreign Policy
  • Education
  • Free Speech and Civil Liberties
  • Global Freedom
  • Government and Politics
  • Health Care
  • Immigration
  • Monetary Policy
  • Poverty and Social Welfare
  • Regulation
  • Tax and Budget Policy
  • Technology and Privacy
  • Trade Policy
Archives
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • September 2009
  • August 2009
  • July 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • February 2009
  • January 2009
  • December 2008
  • November 2008
  • October 2008
  • September 2008
  • August 2008
  • July 2008
  • June 2008
  • May 2008
  • April 2008
  • March 2008
  • February 2008
  • January 2008
  • December 2007
  • November 2007
  • October 2007
  • September 2007
  • August 2007
  • July 2007
  • June 2007
  • May 2007
  • April 2007
  • March 2007
  • February 2007
  • January 2007
  • December 2006
  • November 2006
  • October 2006
  • September 2006
  • August 2006
  • July 2006
  • June 2006
  • May 2006
  • April 2006
  • Show More
August 15, 2016 2:16PM

Trump Supporters Are Not the Losers from Globalization

By K. William Watson

SHARE

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. 

For one thing, trade isn’t actually the main driver behind the decrease in manufacturing employment, which began in 1979, long before China became a major U.S. trading partner.  Part of the decline is due to trade but the vast majority is due to technological improvements that have enabled greater efficiency and automation.  That’s why even as manufacturing employment has decreased, manufacturing output has continued to rise and is now at an all-time high. 

Also, many of the places where a decrease in manufacturing employment can be tied to competition from Chinese imports are actually doing quite well economically.  If some places affected by trade are doing well and some are doing poorly, that should give us a hint that trade (or other drivers of creative destruction and growth) is not itself responsible for a community’s inability to absorb economic shock. 

My colleague Scott Lincicome has done an excellent job of explaining how the “China shock” is really a story about the lack of labor dynamism in the U.S. economy.  Government policies, many of which differ from state to state, can significantly impact the likelihood that people will find new work after their job becomes obsolete.  Policies that reduce dynamism in the labor market—minimum wage laws, protectionist occupational licensing, various taxes and regulations—make it more difficult for businesses and workers to match up after economic disruption.

So, the first premise of the narrative—that trade is responsible for economic decline in many American communities—is false.   

But maybe people are supporting Trump because they falsely blame trade for their troubles.  A new study using extensive survey data from Gallup blows that theory away.  As the Washington Post reports:

Economic distress and anxiety across working-class white America have become a widely discussed explanation for the success of Donald Trump. It seems to make sense. Trump's most fervent supporters tend to be white men without college degrees. This same group has suffered economically in our increasingly globalized world, as machines have replaced workers in factories and labor has shifted overseas. Trump has promised to curtail trade and other perceived threats to American workers, including immigrants.

Yet a major new analysis from Gallup, based on 87,000 interviews the polling company conducted over the past year, suggests this narrative is not complete. According to this new analysis, those who view Trump favorably have not been disproportionately affected by foreign trade or immigration, compared to people with unfavorable views of the Republican presidential nominee. The results suggest that his supporters, on average, do not have lower incomes than other Americans, nor are they more likely to be unemployed.

The study found that although Trump supporters may live in the sorts of places people consider to be harmed by trade, those supporters personally enjoy above-average economic performance.  So the second premise of the narrative—that people’s economic troubles are leading them to support Trump—also appears to be false. 

Let’s recap:

America’s manufacturing sector is thriving.  Manufacturing employment has continued to decrease, because America has a modern, developed economy where we make more things than ever before using less labor and people have better employment options than working on a factory floor.  However, as manufacturing jobs disappear (due mostly to increased automation) some people have struggled to find new work (due to various economic and policy realities unrelated to trade).

The Gallup analysis shows that this group of people is, in any event, not the demographic most represented among Trump supporters.  

So, the question remains: “Why has Trump been able to gain support by falsely blaming trade with China for an economic decline his supporters have not experienced?”

The Gallup analysis has an interesting theory based on their data:

The evidence is in favor of contact theory is quite clear. Racial isolation and lack of exposure to Hispanic immigrants raise the likelihood of Trump support. Meanwhile, Trump support falls as exposure to trade and immigration increases, which is the opposite of the predicted relationship.

The idea is that Trump supporters are opposed to trade and immigration, not because they have had bad experiences with them, but because they have had very little experience with them.

It’s worth remembering that, although Donald Trump has been particularly vociferous in his condemnation of trade, there’s nothing especially new about the public’s willingness to buy into anti-trade rhetoric during an election or for politicians to take advantage of that.

Politicians are excellent at deflecting the blame for their own failed policies onto people or institutions that voters already mistrust.  That may be foreigners (especially foreign governments) or corporations (especially multinational corporations).  The success of Trump’s anti-trade message is most likely due to his willingness to take advantage of some people’s distrust of things that are foreign. He will have the most success among people for whom trade and immigration are most foreign.  Much the same can be said of the popularity of Sen. Bernie Sanders’s brand of populist trade-bashing among the anti-corporate Left.

Trying to tie support for trade to economic factors is going to lead you to bad results, because all Americans benefit immensely from open trade.  Trade has made Donald Trump’s supporters wealthier, and taxing imports for the sake of economic nationalism won’t help them, even if they used to work in a factory.

Related Tags
Trade Policy, Herbert A. Stiefel Center for Trade Policy Studies

Stay Connected to Cato

Sign up for the newsletter to receive periodic updates on Cato research, events, and publications.

View All Newsletters

1000 Massachusetts Ave. NW
Washington, DC 20001-5403
202-842-0200
Contact Us
Privacy

Footer 1

  • About
    • Annual Reports
    • Leadership
    • Jobs
    • Student Programs
    • Media Information
    • Store
    • Contact
  • Podcasts

Footer 2

  • Experts
    • Policy Scholars
    • Adjunct Scholars
    • Fellows
  • Events
    • Upcoming
    • Past
    • Event FAQs
    • Sphere Summit

Footer 3

  • Publications
    • Books
    • Cato Journal
    • Regulation
    • Cato Policy Report
    • Cato Supreme Court Review
    • Cato’s Letter
    • Human Freedom Index
    • Economic Freedom of the World
    • Cato Handbook for Policymakers

Footer 4

  • Blog
  • Donate
    • Sponsorship Benefits
    • Ways to Give
    • Planned Giving
Also from Cato Institute:
Libertarianism.org
|
Humanprogress.org
|
Downsizinggovernment.org