Why Candidates Are Out Of Sync With How Americans Really Feel About Trade

Apr 18, 2016
Originally published on April 18, 2016 7:56 am

This week, as part of our A Nation Engaged project, NPR and some member stations will be talking about trade — both on the campaign trail and in communities around the country.

Trade has become a target this presidential campaign season.

Both Democrats and Republicans have been attacking trade agreements as "unfair" to American workers.

That resonates in places like Massena, N.Y., where voters cast primary ballots this week.

For more than a century, the Alcoa company has been making aluminum in Massena, a small city on the banks of the St. Lawrence River. Workers at Alcoa plants there made good wages — $20 to $30 an hour. But two years ago, faced with falling prices, the company decided to shutter one of its plants, eliminating more than 300 jobs.

"This influx of metal into the market from China and other countries, it's flooded the market and drove the price down," said Bob Smith, president of the local steelworkers union. "It's hard to compete against that. That's why we feel it's unfair."

Another shoe dropped last fall when Aloca announced plans to close a second plant in the city, cutting nearly 500 more jobs. Those workers got a reprieve when the state stepped in, but it's only temporary. Massena is also suffering from the shutdown of a General Motors plant, where Smith's mom worked for more than 30 years.

"To put it in one word it's been devastating," he says. "When you lose 300 jobs here, 500 jobs there, the result of that is you have 3 or 500 'For Sale' signs up. This is real money being taken out of the local economy."

The U.S. filed a complaint last year with the World Trade Organization, accusing China of providing more than a billion dollars in prohibited export subsidies to a wide range of industries, including aluminum. China agreed to halt some of those subsidies last week.

In the meantime, Massena's tax rolls have taken a beating. Smith's father has cut staffing at the hardware store he runs. And there's a growing problem with heroin abuse.

Leading candidates for president have tried to channel that frustration when they talk about trade in communities around the country.

"Not only have they lost millions of jobs due to growing trade deficits," said economist Robert Scott of the left-leaning Economic Policy Institute. "But there has been downward pressure on the wages of a much, much larger number of Americans: nearly two-thirds of the labor force."

To be sure, trade also produces winners in America. The U.S. enjoys a big trade surplus in aerospace, for example. So if you work for Boeing, exports are your friend. What's more, American consumers save money when they can buy cheaper imported goods.

Overall, polls show a narrow majority of Americans think trade deals have been good for the United States, on balance. But opponents tend to be noisier.

"It's a little bit like gun control," said political analyst William Galston of the Brookings Institution. "You have a pretty solid popular majority in favor [of trade agreements]. But the people who can be mobilized on the basis of that single issue are disproportionately on one side."

That's not surprising. Lots of people feel a little better when they save money on cheap imports. But those who lose their jobs feel a lot worse. New research suggests communities hard hit by trade — like Massena — take a lot longer to recover than forecasters used to think.

Democratic voters are generally more supportive of trade deals, even if many Democratic elected officials are not.

"The Democratic base is made up of young people and minorities and also educated professionals. And all of those groups tend to be open to trade," Galston said.

Republican voters are much more skeptical of trade deals, even though the party's "establishment" is still generally supportive.

For voters of all stripes, trade worries are amplified by more general concerns with slow growth, automation, and inequality.

"For millions and millions of Americans, the American dream has been called into question by the stagnation of the past 15 years," Galston said.

Many economists argue that erecting new trade barriers would be counter-productive. But even staunch supporters of trade say policy-makers need to find better ways to compensate the casualties.

"I think we've missed an opportunity in the United States for many years at this point to have a discussion about our social safety net," said Matthew Slaughter, a Dartmouth economist who worked in the George W. Bush Administration. "In some basic sense the narrative for why trade and globalization are good is lost right now. So what happens come January, 2017?"

Slaughter suggests the safety net could be strengthened with expanded unemployment insurance, job training, and direct subsidies for workers whose wages suffer. He warns that unless the benefits of trade are shared more equitably, public opposition to trade deals is likely to grow.

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DAVID GREENE, HOST:

International trade has become a giant target this presidential campaign season. Both Democrats and Republicans have been attacking trade agreements as unfair to American workers. Well, all this week, some NPR member stations will be talking about trade as part of our project called A Nation Engaged. And we begin this week with NPR's Scott Horsley, who reports the anti-trade rhetoric in this year's election is somewhat at odds with public opinion. Polls show a narrow majority of Americans actually support trade agreements.

SCOTT HORSLEY, BYLINE: For more than a century, the Alcoa company has been making aluminum in Massena, N.Y., a small city on the banks of the St. Lawrence River. Workers there made good wages, 20 to 30 dollars an hour, until a couple of years ago, when Alcoa decided to shutter one of its plants, eliminating more than 300 jobs.

BOB SMITH: This influx of metal into the market from China and other countries, it's flooded the market and drove the price down. It's hard to compete against that. That's why we feel that it's unfair.

HORSLEY: Bob Smith, who heads the local steelworkers union, says another shoe dropped last fall, when Alcoa said it was closing a second plant, cutting nearly 500 more jobs. Those workers got a reprieve when the state stepped in. But it's only temporary. Massena's also suffering from the shutdown of a General Motors plant, where Smith's mom worked for more than 30 years.

SMITH: To put it in one word, it's been devastating. You're talking about a town of 10, 11,000 people. When you lose 300 jobs here, 500 jobs there, the result of that is you have three or 500 for-sale signs up. This is real money being taken out of the local economy.

HORSLEY: The U.S. filed a complaint last year with the World Trade Organization accusing China of more than a billion dollars in prohibited exports subsidies to a wide range industries, including aluminum. China agreed to halt some of those subsidies last week. In the meantime, Massena's tax rolls have taken a beating. People are leaving the surrounding county, and there's a growing problem with heroin abuse. As the New York primary approaches tomorrow, leading Democratic and Republican presidential candidates are talking tough about trade. Economist Robert Scott, with the left-leaning Economic Policy Institute, says via Skype, politicians are trying to tap into the frustration that many Americans feel.

ROBERT SCOTT: Not only have they lost millions of jobs due to growing trade deficits, but there has been downward pressure on the wages of a much, much larger number of Americans, nearly two-thirds of the labor force.

HORSLEY: To be sure, trade also produces winners in America. The U.S. enjoys a big trade surplus in aerospace, for example. So if you work for Boeing, exports are your friend. Once more, American consumers save money when they can buy cheaper imported goods. Political analyst Bill Galston of the Brookings Institution notes many people by surprised when they look at public opinion polls on trade. Democratic voters are generally supportive of trade deals, even if many Democratic elected officials are not.

BILL GALSTON: The Democratic base is made up of young people and minorities and also educated professionals. And all of those groups tend to be open to trade.

HORSLEY: Polls show Republican voters are much more skeptical of trade deals, even though the party's establishment is still generally supportive. Overall, more Americans think trade deals have been good for the United States than bad. But Galston says opponents tend to speak more loudly.

GALSTON: It's a little bit like gun control, where you have a pretty solid popular majority in favor. But the people who can be mobilized on the basis of that single issue are disproportionately on one side.

HORSLEY: That's not surprising. Lots of people feel a little better when they save money on cheap imports. But those who lose their jobs feel a lot worse. New research suggests communities hard hit by trade, like Massena, N.Y., take a lot longer to recover than forecasters used to think. Galston adds trade worries are amplified by more general concerns with slow growth, automation and inequality.

GALSTON: For millions and millions of Americans, the American dream has been called into question by the stagnation of the past 15 years.

HORSLEY: Matthew Slaughter is a Dartmouth economist who worked in the George W. Bush administration. He supports free trade and says erecting new trade barriers would be counterproductive. At the same time, he says policymakers do need to find better ways to compensate the casualties.

MATTHEW SLAUGHTER: I think we've missed an opportunity in the United States, for many years at this point, to have a discussion about our social safety nets so that those individuals who aren't benefiting from the global economy don't feel as politically motivated to give voice to wanting to stop it.

HORSLEY: Slaughter suggests the safety net could be strengthened with expanded unemployment insurance, job training and direct subsidies for workers whose wages suffer. He warns, unless the benefits of trade are shared more equitably, public opposition to trade deals is likely to grow. Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.