In a lecture entitled, “Globalization and the US Labor Market,” Gordon Hanson, professor of economics at the University of California, San Diego, discussed U.S. trade with China and the backlash against globalization and the U.S. economy. He said different regions are more exposed to import competition from globalization.
“Most of the exposed regions from China imports are located in traditional labor-intensive manufacturing regions of the U.S., and that’s in the northern southeast and the southern midwest,” Hanson said.
Hanson said China’s growth hits some regions differently than others; an area with resources in high demand in China will be hit in a less negative way than others.
“If China has a comparative advantage in manufacturing and [the] U.S. has a comparative advantage in other stuff like services, production in tech and agricultural goods, U.S. is going to see job loss in manufacturing jobs,” said Hanson.
Hanson said migration from these areas to places that produce the goods China wants is next to nothing.
“What we’re learning in our work, that workers, and low skilled workers in particular, are not that mobile in response to bad stuff happening,” Hanson said.
Hanson mentioned that most of the manufacturing jobs are generally held by men, and negative consequences can come from young males being out of work.
“So, what you’re going to see is more crime and less formation of families,” Hanson said.
Hanson said people in these areas are likely to vote for politicians and policies that are anti-globalization, such as President Trump’s campaign or Brexit.
“What we find is that areas with large manufacturing job loss as a result of globalization were more likely to vote for those politicians, and it was true in the 2016 U.S. election and the Brexit vote,” Hanson said.