It’s true that the average monthly rate of decline in the share of workers employed in manufacturing has been very slightly faster from 1976 through today (February 2025), at 0.171 percent, than it was from 1954 through 1975, at 0.134 percent. But it’s also true that the average monthly rate of decline in the share of manufacturing workers has slowed since China joined the WTO. From January 1976 through November 2001, the share of manufacturing workers fell at an average monthly rate of 0.192 percent; from December 2001 through February 2025, that rate dropped to 0.146 percent.
Manufacturing employment as a share of total employment is falling not because of trade but because of improvements in labor-saving technologies, combined with Americans’ rising demand for services relative to the demand for goods.
If protectionists are correct that US trade deficits either push Americans further into debt to foreigners or result from Americans selling too many assets to foreigners, the net worth of American households would have fallen over the past half-century, as these years saw an unbroken string of annual US trade deficits. But the opposite has happened. As I explain in this short blog post at Café Hayek, the average inflation-adjusted net worth of a US household today (2024) is 232 percent higher than it was in 1975, 140 percent higher than in 1994, and 78 percent higher than in 2001. In short, we Americans have gotten richer as we’ve run trade deficits and since NAFTA took effect as well as since China joined the WTO.
Again, none of these six trends in the data proves that protectionists are mistaken to argue that freer trade and trade deficits have harmed America economically. But taken together they should at least put the burden of proof squarely and heavily where it belongs — namely, on protectionists. It is they, and not free traders, who advocate government-imposed restrictions on Americans’ economic liberties.
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