Smith: China Shock Displaced US Manufacturing Workers Into Low-Wage Service Jobs
Noah Smith · a16z Podcast | Adjusting to Trade... and Innovation · Jan 2, 2019 · at 19:13
Economist Noah Smith summarizes research by Autor, Dorn, and Hanson contrasting the negative economic impact of 2000s Chinese competition on US manufacturing workers with earlier foreign trade shocks.
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“What Otter, Dorn, and Hansen found is that the adjustment of the average worker in competition with Chinese workers was much, much slower and worse, and they found that, you know, the average displaced manufacturing worker in the eighties and nineties who was displaced by Japanese competition tended to find just as good or better a job. The average manufacturing worker displaced by Chinese competition in the 2000 Got a crappy low paid service job or went on welfare or disability, which in some cases has acted as a shadow welfare system.”
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