Trading Up: How Expanding Trade Has Delivered Better Jobs and Higher Living Standards for American Workers

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Opponents of trade liberalization have sought to indict freetrade and trade agreements by painting a grim picture of theeconomic state of American workers and households. They claim thatreal wages have been stagnant or declining as millions ofhigher‐​paying middle‐​class jobs are lost to imports. But thereality for a broad swath of American workers and households is fardifferent and more benign.

Contrary to public perceptions:

  • Trade has had no discernible, negative effect on the number ofjobs in the U.S. economy. Our economy today is at full employment,with 16.5 million more people working than a decade ago.
  • Trade accounts for only about 3 percent of dislocatedworkers.Technology and other domestic factors displace far moreworkers than does trade.
  • Average real compensation per hour paid to American workers,which includes benefits as well as wages, has increased by 22percent in the past decade.
  • Median household income in the United States is 6 percenthigher in real dollars than it was a decade ago at a comparablepoint in the previous business cycle. Middle‐​class households havebeen moving up the income ladder, not down.
  • The net loss of 3.3 million manufacturing jobs in the pastdecade has been overwhelmed by a net gain of 11.6 million jobs insectors where the average wage is higher than in manufacturing.Two-thirds of the net new jobs created since 1997 are in sectorswhere workers earn more than in manufacturing.
  • The median net worth of U.S. households jumped by almostone‐​third between 1995 and 2004, from $70,800 to $93,100.

The large majority of Americans, including the typicalmiddle‐​class family, is measurably better off today after a decadeof healthy trade expansion.