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Our Misplaced Faith in Free Trade

Posted October 03, 2014

Under Economic Issues, International Trade Issues

(Jeff Madrick – NY Times)

Trade is one of the few areas on which mainstream economists firmly agree: More is better. But as the Obama administration pursues two huge new trade deals — one with countries in the Asia-Pacific region, the other with the European Union — Americans are skeptical. Only 17 percent believe that more trade leads to higher wages, according to a Pew Research Center survey released last month. Just 20 percent think trade creates jobs; 50 percent say it destroys them.

The skeptics are on to something. Free trade creates winners and losers — and American workers have been among the losers. Free trade has been a major (but not the only) factor behind the erosion in wages and job security among American workers. It has created tremendous prosperity — but mostly for those at the top. Read more here.