News You Really Need To See: “Where Jobs Are Squeezed by Chinese Trade, Voters Seek Extremes”

“Where Jobs Are Squeezed by Chinese Trade, Voters Seek Extremes”

The New York Times, April 25, 2016

“Disenchantment with the political mainstream is no surprise.  But research to be unveiled this week by four leading academic economists suggests that the damage to [US] manufacturing jobs from a sharp acceleration in globalization since the turn of the century has contributed heavily to the nation’s bitter political divide. … Cross-referencing congressional voting records and district-by-district patterns of job losses and other economic trends between 2002 and 2010, the researchers found that areas hardest hit by trade shocks were much more likely to move to the far right or the far left politically. … While whites hit hard by trade tend to move right, nonwhite voters move left, eroding support for moderates in both parties, the study concluded. … The new paper underscores a broader rethinking among economists of the costs and benefits of policies aimed at encouraging industrial competition across borders. … Until the Nafta agreement with Canada and Mexico in 1994, and especially the entry of China into the W.T.O., trade deals were mostly multilateral and the rise in manufacturing imports to the United States came primarily from other advanced industrial nations like Germany and Japan. … The authors found that voters in congressional districts hardest hit by Chinese imports tended to choose more ideologically extreme lawmakers.  Between 2002 and 2010, districts in the top 5th percentile of trade exposure, on average, experienced a 19 percent greater drop in manufacturing employment relative to districts at the other end of the spectrum.  Those hard-hit districts became, on average, far more conservative: the ideological equivalent of moving from Marco Rubio to Ted Cruz.”

Quickie analysis:   An interesting study that sheds light on how economic disenfranchisement fuels political extremism.  Although the study focuses on the US, the dynamics in Europe are likely similar.

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