‘Employment Effects of International Trade’
Via Economist’s view:
Mark Thoma writes: This is a research summary from the NBER Digest. It discusses work from Autor, Dorn, Hanson, and Song that finds “Workers bear substantial costs as a result of the ‘shock’ of rising import competition”:
Employment Effects of International Trade, by Claire Brunel, NBER Digest: In the past two decades, China’s manufacturing exports have grown dramatically, and U.S. imports from China have surged. While there are many reports of plant closures and employment declines in sectors where import competition from China and elsewhere has been strongest, there is little evidence on the long-run effect on workers. In Trade Adjustment: Worker Level Evidence (NBER Working Paper No.19226), David Autor, David Dorn, Gordon Hanson, and Jae Song examine the impact of exposure to rising trade competition from China on the employment and earnings trajectory of U.S. workers between 1992 and 2007. They find that workers bear substantial costs as a result of the “shock” of rising import competition. The adjustment to such shocks is highly uneven across workers, and varies according to their previous conditions of employment.
(bolding is mine)
I believe the appropriate response from the labor economy is: No sh*t Sherlock!
Now, if there were only some way I could out source my own labor and import it’s results back to me to buy my resultant product such that I pay myself the difference in costs and have the product too?
I guess we would have discovered a new physics in that the results is free stuff to me plus profit! Wow it would be like getting more energy from less energy! It would be like perpetual motion!
Unfortunately due to our understanding of physics, so far we have only been able to make out sourcing physically work when I out source someone else’s labor. At least it works until I realize I’m dependent on the other person’s spending power for my rent seeking machine. Though, if I could create a 3rd entity, a dark matter of sorts place holder in the equation that keeps creating energy and putting it into the system then I think outsourcing someone else’s labor could work…indefinitely?