Neil Irwin had an interesting piece arguing that Trump is fighting the last battle on trade in worrying about imports of steel and aluminum. His main point, that the millions of jobs we lost in manufacturing to trade in the last decade are not coming back, is largely correct. But there are a few points worth adding.

First, it would be worth having a little honesty about the impact of trade on the country’s workers. It is standard wisdom in political circles to say that trade really wasn’t caused job loss in manufacturing, the real cause of job loss was productivity growth. This is true, but only in a way that is incredibly misleading.

Suppose a factory that was the major employer in a small city burned down, leaving all the workers unemployed. An economist can truthfully say that the major cause of the loss of manufacturing jobs in the city was productivity growth, since over the last five decades the city almost certainly lost more manufacturing jobs from productivity growth than due to fire. At the same time, the people who are newly out of work are 100 percent right in blaming the fire.

This pretty well describes how many economists have been talking about the impact of trade in the last decade. Manufacturing has been falling as a share of total employment since the 1970s, but the total number of jobs in manufacturing had changed little, apart from cyclical ups and downs, until our trade deficit exploded in the last decade. (The sharp rise in the trade deficit actually began in 1997, but its impact was offset by the late 1990s boom.) In December of 1970 there were 17,300,000 jobs in manufacturing. In December of 2000 there 17,180,000, a drop of just 120,000. By comparison, in December of 2007, before the start of the Great Recession, manufacturing employment was down to 13,750,000, a drop of 3,430,000 jobs in just seven years.

This was overwhelmingly due to the rise in the trade deficit, which peaked at almost 6.0 percent of GDP in 2005 and 2006. We were seeing productivity growth in manufacturing during this whole time, so that was not something that was new in the years 2000 to 2007. What was new was the large trade deficit. The manufacturing job loss also had a secondary impact on communities across the rust belt where it was a major employer.

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