It’s become a common reflex to point the finger at trade when discussing the decline of the Rustbelt. For instance, consider this perspective:
Defenders of the outgoing trade framework often overlook the fact that its repercussions have been felt most severely in specific areas, such as the American Midwest. Researchers John Russo and Sherry Linkon illustrate how the closure of a steel mill in Youngstown, Ohio, marked the beginning of a series of plant closures that eroded the sense of self-worth and hope among locals. Many remember a time when jobs were plentiful, wages were decent, and strong unions safeguarded workers’ rights, contributing to a sense of pride in a labor force that produced not just goods, but also a robust identity — one that was recognized for its challenges, dangers, and significance.
But is this narrative accurate? Can we truly attribute the decrease in steel employment, from around 190,000 to 84,000, solely to trade?
If trade were the primary culprit behind the job losses in steel mills, we would expect to see a dramatic decline in domestic steel production. Surprisingly, steel output has remained relatively stable, even as employment has sharply decreased:
This isn’t to suggest that imports haven’t played a role in manufacturing job losses — they have certainly had some effect. However, the lion’s share of the blame rests with automation. With advancements in AI poised to revolutionize manufacturing, it’s likely that job losses in this sector will continue to accelerate over the next few decades, even if we were to eliminate all imports entirely.
PS. This post provides a compelling explanation of why reviving manufacturing jobs is far more complex than it appears.
