Spoiler: It didn’t go well for Democrats.
It may shock you to learn that Democrats don’t do so well with voters in the rust belt these days.
Yes indeed: A paper recently published by the National Bureau of Economic Research has discovered that after noted Democratic President Bill Clinton signed NAFTA in 1993, counties with economies dependent on industries that were exposed by the trade agreement with Canada and Mexico lost lots of jobs … and then started voting for Republicans.
In the paper’s abstract the authors write:
In event-study analysis, we demonstrate that counties whose 1990 employment depended on industries vulnerable to NAFTA suffered large and persistent employment losses relative to other counties. These losses begin in the mid-1990s and are only modestly offset by transfer programs. While exposed counties historically voted Democratic, in the mid-1990s they turn away from the party of the president (Bill Clinton) who ushered in the agreement and by 2000 vote majority Republican in House elections.
No, this is not shocking. Not a revelation. But before we go any further, we should extend to these researchers some grace. They’re just following the numbers and doing their best to investigate the claims that we may take for granted. There’s been a lot written about the workforce effects of the China import shock, for example, but not as much about the shock of NAFTA. With this paper, now we can quantify it a bit.
What’s more, just because you hear a talking head say “Democrats lost the working class after they sold ’em out on NAFTA” on television doesn’t make that so. There are lots of goofballs on cable news shows.
But sometimes the pundits kinda … nail it? Here’s a snippet from a talk given by Thomas Frank, who has written a few books about the modern Democratic party:
If you go back and look at who was in favor of NAFTA and who was opposed to it, professionals and the wealthy were very deeply in favor, because it was something you learned on your first day in Econ 101, you were supposed to learn about trade. It was basic stuff.
And there was this moment where you had 283 professional economists sign a statement saying the treaty will be a net positive in terms of employment creation and economic growth, that sort of thing. And on the other side of course you had blue collar workers, most of whom by definition hadn’t gone to college at all, and they were against it.
Ironically, the predictions of the unlettered blue collar workers turned out to be far closer to what eventually came to pass then did the rosy scenarios of all those economists and the Rhodes Scholar in the White House.
(Incidentally, the researchers make note of that huge quorum of pro-NAFTA economists in their paper too.)
Now, this isn’t to say that the Republicans to whom the voters in question have migrated have been sympathetic votes on trade. It was House Republicans who helped Clinton normalize trade relations with China in 2000. And it was House Democrats in 2019 who helped President Trump pass NAFTA’s renegotiation – the newly named USMCA.
And, sidebar, it would be similarly unwise to put our faith in private business and hope they will locate anywhere for altruistic reasons. They aren’t motivated by love of country or loyalty to their workforce, but rather by profit. They may blubber and cry about it, but it’s profit. They’ll chase the money, which is why Apple CEO Tim Cook apparently cut a deal with the Chinese government to invest hundreds of billions of dollars in that country in exchange for light treatment by Chinese regulators.
The takeaway is this: You gotta watch your elected officials, watch their votes, and hold them accountable for the ones that stink. No one party has a monopoly on being wrong. In 1993, the ruling Democrats wanted NAFTA. The failures of American trade policy over the past few decades have been bipartisan.