In the section above, I mentioned that people often think that there are special problems when buying from people in other countries. In a way, that’s true. If you want to buy a cheap toaster, Most likely made in China. Buying products from China means not buying products made in other countries, including America. So Americans who might have manufactured toasters here, certainly at a much higher cost, can’t get those jobs.
However, there are three important responses in this regard. First, the workers who aren’t producing toasters here are producing other goods and services. Currently, the U-3 unemployment rate, a measure of people who are unemployed and looking for work, is low. 4.1 percent. In addition, the ratio of the number of job openings to the number of unemployed people is 1.1. There are more job openings than unemployed people.
Secondly, there is nothing special about the fact that the toaster is produced in another country. Purchasing GAF shingles made in Baltimore, Maryland, rather than Owens Corning shingles made in Portland, Oregon, helps you hire someone in Baltimore instead of someone in Portland. But I don’t hear many people getting upset about it.
Some might say that’s because at least I’m an American employee anyway. So it becomes a job. But back to the first point. People living in the United States who don’t have jobs producing toasters also have jobs producing other things.
The third point is that most people overstate the number of jobs lost to imports and don’t understand the number of jobs lost to technological innovation. Our manufacturing output is 6.4% below the all-time highWe are not “hollowing out industry.” On the contrary, improvements in technology are increasing the productivity of our industrial sector. Manufacturing employment is 33.9% lower than peak Furthermore, the share of manufacturing employment in total employment was 38.7 percent in December 1943, and its postwar peak was 31.9 percent in September 1948, but it is now 8.1 percent.
This is a message from David R. Henderson.Why should trade be free?,” definition of ideaOctober 30, 2024.
please read All. Please note that this article will be longer than usual. There was a lot to cover.
Thanks to Don Boudreaux for providing comments and suggesting data sources.
