Blame technology, not just trade, for job destruction

Tuesday’s primaries in Michi- gan certainly reflected an antitrade sentiment among the state’s voters in both parties. The two winners, Donald Trump on the Republican side and Bernie Sanders for the Democrats, have made names for themselves in part by bashing trade deals.

It’s not hard to see why voters would do as they did, particularly in an industrial state such as Michigan. According to the Bureau of Labor Statistics, national employment in manufacturing has dropped by 5 million, or about 30%, since 2000.

But any fair analysis of the decline in manufacturing jobs would conclude that technology is a bigger culprit than trade.

Trade is a bit like immigration. It puts a face — a foreign face — on people’s job frustrations and financial insecurities. To say that trade pacts are responsible for the job destruction, however, misrepresents what is happening.

One indication of this can be seen in the nature of manufacturing. Even while shedding jobs, manufacturers have significantly raised output by shifting to more automated factories and focusing on more sophisticated products.

A second indication is that the U.S. economy is littered with industries that face little or no foreign competition yet have suffered job losses and wage pressures as bad or worse than those in manufacturing — all thanks to technology.

E-commerce, for instance, has cut into retail sales employment. E-readers have hurt bookstores. Online booking sites have clobbered travel agents. Uber and Airbnb are hitting taxis and hotels. And a digital revolution has turned all manner of entertainment and news media industries upside down and inside out.

On the other side of the equation, trade brings many benefits, which are mostly ignored by protectionists and bashers of pacts such as the North American Free Trade Agreement and the pro- posed Trans-Pacific Partnership.

Trade produces more affordable merchandise and more variety, a godsend for consumers struggling to make ends meet. It is also responsible for significant amounts of employment: In the U.S., 11.7 million people work in export-related industries. And, according to the White House Council of Economic Advisers, they receive $1,300 a year more than workers in industries not related to exports.

The losers from trade, such as workers at a domestic plant that closes, are much easier to identify than the winners — employees spread across many businesses that sell their products abroad.

None of this is to say that those who’ve lost work in manufacturing or any other industry should not be a major concern. Their pain is real. But the answers do not come easy.

The best solution is a more educated workforce. Last month, the unemployment rate for people with a bachelor's degree or higher was 2.5%. The unemployment rate for those with less than a high school diploma was 7.3%.

Revisiting existing trade deals and blocking future ones is unlikely to help displaced workers. And protectionist measures, such as the huge tariffs that Trump tosses around, would ignite trade wars that would do far more economic harm than good.