Magazine article The American (Washington, DC)

The Great Trade Debate: Some Perspective amid the Election-Year Demagoguery

Magazine article The American (Washington, DC)

The Great Trade Debate: Some Perspective amid the Election-Year Demagoguery

Article excerpt

The election season has triggered fierce hand wringing over the number of American jobs destroyed due to free-trade policies. Yet we rarely hear about the new U.S. jobs created thanks to foreign trade.

Political candidates at all levels would do well to consult a recent study by economists Andrew B. Bernard of Dartmouth's Tuck School of Business, J. Bradford Jensen of Georgetown's McDonough School of Business, and Peter K. Schott of the Yale School of Management, which examines "globally engaged" American companies that trade goods.

"We find that trading firms increase employment more rapidly than non-trading firms between 1993 and 2000," the authors report. "We also observe that firms switching their trading status during the sample period have more extreme changes in employment growth than firms with constant trade status. The average firm that opens up to trade between 1993 and 200[3 experiences employment growth of close to 100 percent, while the average firm that quits trading over this period experiences a decline on the order of 10 percent."

More specifically, "exporters over the sample period increase their employment by 94.3 percent, from 3.9 million to 7.4 million. Firms that become importers or switch into both importing and exporting experience similar increases." Meanwhile, "Firms that quit exporting, quit importing, and quit both importing and exporting witness declines of 12.3,16.6, and 10.1 percent, respectively."

Between 1993 and 2000, the number of workers "employed by a firm that was directly engaged in the international trade of goods" jumped from 38.1 million to 47.3 million. (And if anything, the authors note, these figures "are probably an understatement.") Those 47.9 million workers represented more than one-third of America's entire civilian workforce.

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Ultimately, "the most globally engaged firms, i. …

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