Will smaller trade deficits bring back manufacturing jobs?
September 17, 2020
Robert Z. Lawrence
President Donald Trump harnessed his successful 2016 presidential campaign to the issue of lost manufacturing jobs and the “evils” of trade deficits. The Republican national convention in August 2020 demonstrated his determination to do so again. Trump blames trade and offshoring of manufacturing jobs overseas. Democratic presidential nominee former vice president Joe Biden is also making the recovery of manufacturing jobs central to his campaign. Both Trump and Biden propose new programs to enhance US industrial production and technologies. But the problem is that some of their proposals may be less effective in creating additional manufacturing jobs than they assume.
Concerns about the loss of manufacturing jobs are understandable, especially since both candidates are going after middle class voters in the so-called Rust Belt states―voters who helped Trump win four years ago. In 1970, for example, men who had not graduated from college held 35 percent of the jobs in manufacturing. But over the past five decades the share of US employment in manufacturing has declined steadily, dropping precipitously from 17.3 million jobs in 2000 to 11.5 million jobs in 2010. Since 2010, despite almost a decade of recovery and Trump’s focus on reducing US manufacturing trade deficits, only a fifth of the lost manufacturing jobs had been replaced, and that was before the job losses caused by the COVID-19 shock.