According to a report from the US International Trade Commission, the globalization of the US economy has had a debilitating influence on American cities because free trade makes it simpler for corporations to relocate manufacturing and jobs overseas.
The report, which brought together union representatives, economists, among others to discuss the consequences of the United States decades-long free trade policy, was commissioned by US Trade Rep. Katherine Tai and completed in March and April of this year.
Among other discoveries, the survey discovered that the United States’ free trade policy has enabled firms to more easily relocate American employment overseas while keeping wages low for occupations that stay in the United States.
“Participants cited trade policy as the root reason of employment losses.” According to the article, “one union representative highlighted that trade laws frequently have loopholes or are controlled by China and other countries so that the policies do not operate as intended.”
“Another union leader claimed that current trade agreements allow for greater capital movements than past agreements, allowing auto, electronics, and steel businesses to relocate overseas for a variety of reasons. Various union officials noted that firms might exploit the threat of transferring work offshore for a variety of reasons, including greater tax implications and lower salaries, to limit labor union power and keep domestic wages low.”
According to the paper, when the United States’ free trade policy allows firms to move production, American workers aren’t the only ones who suffer. The disastrous impact is felt by communities and towns as a whole, as well as Americans working in supporting industries.
On Aug. 11, 2020, the deserted “Scranton Lace Company” plant is seen in Scranton, PA. The famous plant, where former Sec. of State and Democratic Presidential nominee Hillary Rodham Clinton’s grandpa used to work, was shut down in 2002.
“Participants highlighted that when employment is lost, local companies relying on affected workers as clients and customers as well as other firms in the industry’s supply network, suffer,” according to the report. “A veteran steelworker also mentioned that corporate bankruptcies might have consequences beyond loss of employment, such as pension loss.”