Specifically, the researchers found that, from NAFTA’s launch in January 1994 through 2008, mortality increased in those “commuting zones” in the continental United States that had a disproportionately large number of workers producing manufactured goods in competition with imports from Mexico. Especially hard hit in those commuting zones were men who, in 1994, were ages 25 to 44. Losing jobs as a result of the greater freedom of Americans to purchase imports from Mexico, manufacturing workers and members of their households in these hard-hit commuting zones became more likely to commit suicide, turn to drugs or alcohol, or otherwise suffer ill health that raised their chances of going early to their graves.
In short, NAFTA was deadly because NAFTA destroyed manufacturing jobs. It’s a tiny leap from this finding to the conclusion that free trade is very likely hazardous to the health of manufacturing workers and their families. And at least one of the paper’s three authors — University of Chicago economist Matthew Notowidigdo — made this leap when he told the New York Times that his research highlights an “underappreciated cost of globalization.”
The econometrics in the paper is genuinely impressive. I assume that the finding of increased mortality is accurate. But I dispute the conclusion that this rise in mortality can legitimately be said to be the result of the freeing of trade.
Let’s put NAFTA job losses into perspective.
The total number of jobs destroyed by NAFTA from 1994 through 2008 was minuscule compared to total job destruction over those years. The St. Louis Fed has data starting in December 2000 on total monthly layoffs and discharges — that is, for 97 of the 180 months covered by Notowidigdo, et al’s research. During those 97 months, an average of 1.9 million workers in America every month lost or were laid off from jobs they wanted to keep.
How much of this job destruction was caused by NAFTA? The Economic Policy Institute — an outfit hostile to NAFTA — estimates that over the course of NAFTA’s first 20 years, it destroyed a total of 700,000 jobs. Even assuming that all of those 700,000 jobs were destroyed in NAFTA’s first 15 years, that’s an average monthly job loss of only 3,900 — or 0.2 percent of the average total monthly layoffs and discharges during this period.
This picture hardly changes if we compare NAFTA job losses to only manufacturing-worker layoffs and discharges. On average, 194,000 manufacturing workers lost their jobs each and every month from December 2000 through December 2008. NAFTA job losses, therefore, were a mere 2.0 percent of all manufacturing-job losses in those years. Ninety-eight percent of manufacturing-job losses from December 2000 through December 2008 were caused by forces other than NAFTA.
…..
So what are the likely causes of the rising mortality detected by Notowidigdo, et al.? To answer this question requires, as they say, further study. There are several candidates, however, of varying plausibility. These include:
- Increased access to public and private welfare which enables people who lose jobs to remain unemployed longer, perhaps undermining their sense of self-worth.
- Readier access to debilitating drugs, or reduced social stigma from using such drugs.
- Increased occupational-licensing requirements which obstruct unemployed workers’ efforts to pursue new occupations.
- The rise in land-use restrictions which raise the cost of moving to new locations with better job prospects.
- A cultural change that either made the loss of manufacturing jobs more shameful than were such losses prior to NAFTA, or that drained unemployed manufacturing workers of the gumption possessed by previous generations of unemployed workers to actively search for new jobs.
Whatever the actual cause (or causes) of the rise in mortality, blaming NAFTA is incorrect given that it is only one of countless sources of job destruction, and a rather minor source. Even worse is leaping from a finding of rising manufacturing-worker mortality during NAFTA’s first 15 years to the conclusion that, for manufacturing workers generally, globalization is lethal.
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