In this op-ed, the Cato Institute‘s Dan Griswold explains — contra, for example, the mistaken fears of Harold Meyerson — that freer trade is helping to make an ever-greater percentage of Americans richer than ever before. Here are some key paragraphs from Dan’s fine essay:
Like so many assumptions about trade, the belief that more global
competition has somehow lowered the living standards of the average
American worker and family is just a myth.
The critics have it all wrong: The middle class isn’t disappearing – it’s moving up.
The Census reports that the share of U.S. households earning $35,000 to
$75,000 a year (in ’06 dollars) – roughly, the middle class – has
indeed shrunk slightly over the last decade, from 34 percent to 33
percent. But so, too, has the share earning less than $35,000 – from 40 percent to 37 percent.
It’s the share of households earning more than $75,000 that’s jumped – from 26 percent to 30 percent.
Trade has helped America transform itself into a middle-class service
economy. Yes, the country’s lost a net 3.3 million manufacturing jobs
in the past decade – but it’s added a net 11.6 million jobs in service and other sectors where average wages are higher
than in manufacturing. Most of these new jobs are in better-paying
categories, like professional and business services, finance and
education and health services.
Trade and globalization have
also helped bolster the balance sheets of American households by
delivering higher incomes, lower interest rates and wider investment
opportunities. From 1995 to 2004, the real median net worth of U.S.
households jumped by 31 percent, boosted by rising home values and
stock prices. (Even with the recent housing slump, average home values
remain more than 2.5 times what they were a decade ago, according to
the S&P/Case-Shiller index.)
