Donald Trump’s Bad Reasoning on NAFTA
In this speech Donald Trump makes the claim that North Carolina has lost half of the manufacturing jobs (starts at about the 45:30 mark if you don’t want to suffer through the whole horrible thing). The implication, which he does not make explicit, is that those jobs were lost due to NAFTA. Problem is that there a number of facts that make Trumps implications quite dubious.
First up is that manufacturing employment worldwide is declining. With declining manufacturing employment worldwide and also a long term declining trend in the U.S. it is not clear that the jobs Trump implies were lost due to NAFTA would have still been around without NAFTA.
Second is that manufacturing employment drops when there is a recession and we had one heck of a recession in the time frame Trump references. So would those jobs have been saved if we did not have NAFTA? It is hard to believe that.
And, once again maintaining jobs via protectionism is really nothing more than a type of welfare. It is nothing short of a transfer from other sectors of the economy to the protected sector. This does not enhance productivity and in fact may reduce it.
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