With liberalized trade, gain outweighs the pain.

• Author: Maley, Frank
• Position: Economic Outlook

An associate professor of political science at UNC Chapel Hill, Thomas Oatley co-wrote a white paper that says liberalizing trade, despite the pain to displaced workers, is beneficial because it lowers prices and creates jobs that often pay better than those lost. The paper focuses on the 8th Congressional District, which stretches along the South Carolina line from Robeson County to Union County and has been dependent on textile and apparel manufacturing.

BNC: How do you tell that to a worker whose job has moved to Mexico?

Oatley: I don't think there's anything you can say that will make that person's position any easier. What you can say is that with retraining, hopefully, that person will be able to find a position in another industry. And with the right kind of retraining, that position should pay a higher wage. Most of the data suggests that about 85% who lose their jobs as a consequence of import competition or firms moving offshore find new work within six to 12 months. On average, the wage is no lower than the previous position. In many cases, it's higher.

Six to 12 months is a long time with no job.

Yeah, it is. Well, there are programs available for trade-adjustment assistance. Unemployment insurance is available, which helps a little bit.

You say that the worst of the job losses in textiles and apparel is over.

The district's number of apparel workers fell from about 8,300 in the early '90s to about 3,600 in 2000. And textile workers fell from about 27,000 to about 19,000 in the same period. I guess partly our conclusions are based on the simple fact that there aren't many apparel workers left. If we're talking about what might happen in the future, we have 3,600 jobs left that might disappear. That's not insignificant, but it pales in comparison to what's happened in the last 15 to 20 years.

What kind of jobs does freer trade create?

They tend to be in more capital-intensive firms, more technology-intensive firms and in firms that require higher skill levels of their work force. For example, if you look at the 8th District, you have the shutting down of lots of textile and apparel firms but also the emergence of many high-technology industries and the continued success of older companies that depend on access to export markets.

Such as?

Allvac, which has had a plant in Monroe since 1957, produces metals for the aircraft industry. It employs about 1,100 and exports a considerable share of the metal it produces. You see similar...