In the first decade of this century, the U.S. manufacturing sector shed jobs at an alarming and unprecedented rate. That coincided with a surge in imports, weak growth in exports, and a yawning trade deficit. The sharp job losses in manufacturing helped keep employment growth weak and labor force participation low.
During the 2016 presidential election, both Republican candidate Donald Trump and Senator Bernie Sanders blamed trade and globalization. That message helped propel Trump to the presidency. But most economists dismissed it, arguing that automation was to blame. Media reports often take this view as fact. In late 2016, for example, New York Times reporter Binyamin Appelbaum wrote, “From an economic perspective . . . there can be no revival of American manufacturing, because there has been no collapse. Because of automation, there are far fewer jobs in factories.”
Yet this view reflects a misreading of the data. As I discuss in a recent
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