econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 21 January 2017

How Do Imports Affect Manufacturing Jobs?

from the St Louis Fed

-- this post authored by David Andolfatto

One popular opinion is that competition from imports has decreased employment in the U.S. manufacturing sector. While manufacturing employment has declined as net exports have fallen, the data imply that trade is not the main cause. For example, a study by Michael Hicks and Srikant Devaraj reported that a negative trade deficit accounted for only about 13 percent of jobs lost in the sector. [1]

The U.S.’s counterparts in the Group of Seven2 have experienced a comparable secular decline in the share of total employment devoted to manufacturing. The Canadian experience, in particular, has been very similar to that of the U.S.

As seen in the figure below, the employment share in manufacturing in both the U.S. and Canada fell roughly in tandem from about 15 percent in 1996 to about 8 percent in 2016.

trade and manufacturing employment

Just like in the U.S., the common view from the Canadian perspective is that the decline is due to increased foreign competition. Over the above sample period, more than 60 percent of Canadian trade in manufactures is with the U.S. If foreign competition is responsible for the decline in Canadian manufacturing employment, a telltale sign would be a decline in Canadian net exports of manufactures to the U.S.

The figure shows that Canadian net exports of manufactures to the U.S. was in fact increasing in the first half of the sample period. This happened even as the manufacturing employment share declined in both countries. In 2008, the Canadian trade balance in manufactured goods with the U.S. went from surplus to deficit. And yet, the manufacturing employment share seems to have stabilized in both countries.

This type of evidence illustrates the difficulties in squaring popular opinion with the data. If international trade flows were the dominant factor in explaining U.S. manufacturing employment, one would expect to see a strong correlation between sectoral trade balances and sectoral employment. The data suggest that this correlation is absent.

Notes and References

1 Hicks, Michael J.; and Devaraj, Srikant. “The Myth and the Reality of Manufacturing in America." Ball State University Center for Business and Economic Research, 2015.

2 The Group of Seven consists of Canada, France, Germany, Italy, Japan, the United Kingdom and the U.S.

Additional Resources

Source

https://www.stlouisfed.org/on-the-economy/2017/january/does-trade-affect-manufacturing-jobs

Disclaimer

Views expressed are not necessarily those of the Federal Reserve Bank of St. Louis or of the Federal Reserve System.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.




Econintersect Contributors


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Slow Economic Growth Will Be Around For A Long Time
The Job Guarantee, Wage-Price Inflation And Alternative Solutions: Part 2
News Blog
March 27, 2017 Weather and Climate Report - Will the MJO Deliver a Nino?
The Most Reputable Companies Worldwide
Gut Bacteria Play A Role In Long-term Weight Gain
What We Read Today 27 March 2017 - Special Public Edition
Is Less More In The Smartphone Market
Average Gasoline Prices for Week Ending 27 March 2017 Statistically Unchanged - Again
What We Read Today 27 March 2017
Why New Jets Could Destroy Airlines
March 2017 Texas Manufacturing Survey Continues to Expand
Wage Growth After The Great Recession
Is OPEC Losing Its Ability To Influence Oil Prices?
Many Worry That The Great Recession And Mounting Student Debt Have Stunted Millennials' Financial Development
Infographic Of The Day: Visualizing The Shifting Income Distribution Of American Jobs
Investing Blog
The Dollar's Coming Impact On Markets
The Real 401k Plan Manager 27 March 2017
Opinion Blog
Macron May Lead But Le Pen Remains The Big Story
Is The 20th Century Still The 'Hayek Century'?
Precious Metals Blog
These Gold Stocks Will Produce Much Bigger Gains Than Gold Itself
Live Markets
27Mar2017 Market Close: US Dollar Falls Into The 98 Range, WTI Crude Slips Into The 47 Handle, Wall Street Generally Sour And Down
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government































 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved