This post is a summary of an Intelligence Squared US debate I listened to.  The motion debated: globalization has undermined America’s working class.

The portion of the American working class that is directly exposed to international competition is ~20% (factory workers as opposed to service industry workers). Of this 20%, less than half of jobs lost were lost specifically to international outsourcing. However, the impact of this is extremely visible because those 20% of workers tend to be concentrated in highly specialized manufacturing towns. It is further true that inflation-adjusted wage growth has been flat since the 1970’s, but research indicates the majority of the cause for this is factors other than international competition (like technology). Furthermore, what the working class can buy with their dollars is dramatically improved. You couldn’t buy an iPhone for $1,000,000,000 in the 1970, while you can buy a used one now for ~$500.

Income inequality increased dramatically between 1970 and 1990, but trade increases during that time period were overwhelmingly with other advanced nations; when trade with China and other developing nations began increasing after that, income inequality growth basically flatlined. This breaks the causal linkage between wage stagnation in the working class and increases in free trade.

Overall, the arguments for why free trade is bad are simple enough that anyone can understand them, while the arguments for why free trade is good are abstract enough that it’s easy to ignore/downplay them if you’re motivated to do so.