Economics

Free Trade's Unwilling Victims

The poor and working class lose jobs and income. The well-off benefit from cheaper goods.

They used to make stuff here.

Photographer: Luke Sharrett/Bloomberg

When people talk about the benefits and harms from trade, they usually refer to the labor market. That makes sense, since losing a job has a huge impact on a person’s life. Even if you can find another job, it takes time and money and causes lots of stress. It disrupts your life, and sometimes you can’t find as good a job as the one you had before. That’s why recent research from economists David Autor, David Dorn and Gordon Hanson, showing that trade with China hurt lots of U.S. workers, made such a splash -- we can all imagine the stress, the fear, the humiliation and the hopelessness of workers whose careers are destroyed in a day, leaving them dependent on welfare or working at a job paying half as much. If Autor et al. are right, the “China shock” of the 2000s hurt more workers than it helped.

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