Econ­o­mists dump on Trump boast to bring jobs back from China

The Pak Banker - - BUSINESS -

Don­ald Trump vows to bring back the mil­lions of Amer­i­can jobs lost to China and other for­eign com­peti­tors if vot­ers put him in the White House.

Econ­o­mists say he wouldn't stand a chance: Trump's bound­less self-con­fi­dence is no match for the global eco­nomic forces that took those jobs away.

Since the be­gin­ning of 2000, the U.S. econ­omy has lost 5 mil­lion man­u­fac­tur­ing jobs. A study pub­lished last year by the Na­tional Bureau of Eco­nomic Re­search found that be­tween 2 mil­lion and 2.4 mil­lion jobs were lost to com­pe­ti­tion from China from 1999 to 2011.

An­nounc­ing his pres­i­den­tial bid June 16, Trump de­clared: "I'll bring back our jobs from China, from Mexico, from Ja­pan, from so many places. I'll bring back our jobs, and I'll bring back our money."

Econ­o­mists were unim­pressed. "It's com­pletely im­plau­si­ble," says for­mer Fed­eral Re­serve Vice Chair­man Alan Blin­der, a Prince­ton Univer­sity economist who has stud­ied the off­shoring of Amer­i­can jobs.

Com­pa­nies shifted low-skill jobs to China in the 2000s be­cause Amer­i­can work­ers couldn't com­pete with Chi­nese work­ers earn­ing around $1 an hour. Now China it­self is los­ing low- wage man­u­fac­tur­ing jobs to poorer coun­tries such as Bangladesh and Viet­nam.

If Amer­ica tried to block for­eign­made prod­ucts and make ev­ery­thing at home, prices would sky­rocket and for­eign coun­tries would likely re­tal­i­ate by block­ing U.S. goods from their coun­tries. "You can't turn back the clock," Blin­der says. But there's an even big­ger prob­lem for those who want to re­store U.S. man­u­fac­tur­ing em­ploy­ment (now 12.3 mil­lion) to its 1979 peak of 19.6 mil­lion: Tech­nol­ogy has taken many of those jobs for good. To­day's high-tech fac­to­ries em­ploy a frac­tion of the work­ers they used to. Gen­eral Mo­tors, for ex­am­ple, em­ployed 600,000 in the 1970s. It has 216,000 now - and sells more cars than ever.

"No mat­ter who be­comes pres­i­dent," says economist David Au­tor of the Mas­sachusetts In­sti­tute of Tech­nol­ogy, "I can­not fore­see a sce­nario where 5 mil­lion ad­di­tional man­u­fac­tur­ing jobs ... reap­pear in the U.S. in the decades ahead." That's es­pe­cially true with U.S. un­em­ploy­ment at a seven-year low 5.3 per­cent, a rate close to what econ­o­mists con­sider full em­ploy­ment. "If you took all the jobs we out­sourced and brought them back, you'd have neg­a­tive un­em­ploy­ment," says Harold Sirkin, se­nior part­ner at the Bos­ton Con­sult­ing Group and an ex­pert on man­u­fac­tur­ing com­pet­i­tive­ness world­wide.

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