Throughout much of their campaign, Trump and Sanders have been reiterating the same message over and over again: free trade has caused great harm to many everyday Americans, despite lowering the price of goods. As it turns out, the two candidates may have a point, according to research from three economists who looked at what happened when imports from China skyrocketed in the U.S.
The economists analyzed data from 1990 to 2007, a time when China imports were at an all-time high and killed many jobs in the U.S. The data uses the dollar value of China imports, and then divides the sum by the number of U.S. workers. From here, the data compares the number to the increase in government payments in the form of disability, unemployment and retirement benefits.
The data shows that for every $1,000-per-worker-increase in imports from China annually, there is a $58-per-capita rise in government transfer payments. These aren’t free payments. They serve as compensation for families and communities that lost their jobs to overseas workers.
Theoretically, the U.S. should be selling more to China as imports from the country rise. This would create a balance that kept Americans fully employed. But this is not the case. China sells more to America than it buys. As a result, many U.S. workers who were displaced remained underemployed or unemployed.