Where Have The Effects Of Trade With China Hit Hardest? Not In The Midwest

From "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," an MIT working paper. Click for a larger view

The surge Chinese manufacturing over the past two decades has gotten a lot of attention – and a lot of concern – in the industrial Midwest.

It’s easy enough to see what the effects have been here. We’ve seen it in the empty factories that no longer make things. We’ve seen the increase in products made in China. And it’s easy to think that the Midwest has suffered more than any other region from trade with China.

But a working paper released last year by MIT shows that isn’t true.

The researchers who wrote the paper looked at how increased Chinese imports have affected workers in different metropolitan areas (or “commuter zones” as they preferred to call them).

The paper itself is filled with complicated equations that may be difficult to confront on a Friday afternoon. But the MIT News service posted a story about the paper this week, including comments from economist David Autor, one of the study’s authors.

Here’s a Friday-friendly explanation of what they found:

In conducting the study, the researchers found more pronounced economic problems in cities most vulnerable to the rise of low-wage Chinese manufacturing; these include San Jose, Calif.; Providence, R.I.; Manchester, N.H.; and a raft of urban areas below the Mason-Dixon line — the leading example being Raleigh, N.C. “The areas that are most exposed to China trade are not the Rust Belt industries,” Autor says. “They are places like the South, where manufacturing was rising, not falling, through the 1980s.”

Researchers ranked each city based on its workers “exposure” to Chinese trade. From 1990-2000 no city in the Midwest made the top 10. From 2000-2007, only two did – Chicago and Milwaukee. Meanwhile, cities out West dominated the list, with San Jose, Cali. ranking first in exposure during both periods.

None of this means that the Midwest hasn’t been hit hard by trade with China. The paper says America lost a total of about a million jobs because of trade with China from 1991-2007. That included a quarter of all manufacturing jobs in the country. The Midwest certainly had its share of losses.

But, at least in terms of the impact per worker, the Midwest was far from the hardest hit.

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