Steve ______ sent the following query by e-mail:
I have wondered if we are seeing more workers across multiple industries being displaced by the forces of globalization and if so would this not change the cost -benefit analysis of free trade for a mature economy with an aging population? I am an advocate of free trade and view the min wage as pernicious, but was thinking about the free trade discussion in the context of my first sentence. Hard to see large number of +50 year olds, if, displaced in mass from their jobs finding new employment.
Let’s grant – realistically – that switching jobs and, especially, careers becomes more difficult as one ages. It is indeed, I’m sure, more difficult for the typical, say, 57-year-old worker to land a new job (especially one that requires a very different skill set set than was required by his or her old job) than it is for the typical 37-year-old worker to do so. But this fact does not change the cost-benefit calculus against free trade.
The main reason is one that I’ve mentioned on some earlier occasions here at Cafe Hayek – namely, there is nothing unique about free trade in destroying specific jobs. If an aging population is a potential justification for restricting free trade, then it is a potential justification for restricting all manifestations of economic competition and change. The 57-year-old metal worker who loses his job to imports is no more harmed and no more incommoded than is the 57-year-old metal worker who loses her job to an advance in robotics. The 57-year-old wheat farmer whose income falls because of greater imports of wheat is no more harmed and no more incommoded than is the 57-year-old wheat farmer whose income falls because an increased incidence of celiac disease causes many consumers to change their diets. The 57-year-old auto worker who loses his job to imports is no more harmed and no more incommoded than is the 57-year-old auto mechanic who loses his job to automotive-technology improvements that reduce consumers’ demand to have their automobiles repaired.
Again, if an aging population justifies restrictions on international trade, it also justifies restrictions on all economic change and on economic competition. There is no reason to single out for special blame economic change that happens to come from across political borders – such borders being, from an economic perspective, utterly arbitrary and meaningless.
Indeed, if one were to consider separately all possible sources of particular job or income loss, international trade (at least for a large country and economy such as the United States) would likely rank among the least important reasons for job and income loss. I’m too busy at the moment to search for links to some appropriate references, but I’m quite certain that technological innovation is a far larger source of particular-job and income loss than is increased freedom to trade internationally.
