|
Protectionism Promises February 28, 2008 Denouncing Washington is something of a habit for Connecticut politicians. The list of grievances Governor Rell, Attorney General Blumenthal, and legislative leaders have against the federal government is endless. The Bush administration is cruelly targeting children’s healthcare subsidies. No Child Left Behind is an unfunded mandate. The feds won’t investigate high gas prices. The Federal Emergency Management Agency won’t provide disaster relief for Fairfield County. The Federal Energy Regulatory Commission wants to destroy Long Island Sound with a natural-gas facility. Yadda, yadda, yadda. But given the climate in Congress -- as well as the probable outcome of November’s election -- Connecticut’s whiney pols could soon have something legitimate to complain about. This time, the issue will be trade. There are signs that the pro-free trade consensus that has dominated Washington for the last few decades is cracking. Majority Democrats in Congress (and a disturbingly high number of Republicans) increasingly assail international agreements that weaken trade barriers. Barack Obama promises to “fix” NAFTA, add even more regulatory authority to the World Trade Organization, and block deals he claims “ship jobs overseas and force parents to compete with teenagers for minimum wage at Wal-Mart.” Protectionist sentiments matter to Connecticut because international trade is a major component of the Nutmeg State’s economy. Some of the country’s biggest exporters, most notably General Electric and United Technologies, are based here, as are an increasing number of small businesses that seek customers abroad. Goods (and services, it’s worth noting) marketed to the world provide quality jobs and above-average wages for hundreds of thousands of Connecticut workers. And the Nutmeg State’s exports are on the rise. Last year an analysis by the Department of Economic and Community Development found that the value of Connecticut exports rose by 26.3 percent between 2005 and 2006. Growth was higher here than in the five other New England states, and far surpassed the national average of 14.7 percent. That’s why the retreat from free trade by those in Washington -- and candidates seeking federal offices -- poses such danger to Connecticut’s fragile economy. By now the shopworn formula offered by protectionists is known to all: free trade = decimated businesses and industries = lower wages and a declining standard of living for Americans, particularly in manufacturing-dependent states such as Connecticut. It’s tempting to view anti-traders’ spin as valid. U.S. manufacturing jobs are indeed declining, and they’re plummeting in the Nutmeg State. In the late 1940s, manufacturing’s share of Connecticut employment was over 50 percent. In 1970, the figure had fallen to 37 percent. It’s just over 11 percent now. But digging beneath protectionists’ morality play yields a more nuanced understanding. While there’s fewer jobs in manufacturing -- less than 200,000 -- Connecticut’s factories now excel in churning out high-quality, specialized products that are increasingly purchased by a rapidly growing global economy. Few Connecticut-based factories make shoes and sweaters today. Instead, they make turbines, engines, air conditioners, elevators, and helicopters. Examples of Connecticut success stories in the new export environment are easy to find. Westinghouse is hiring 100 new employees for its Windsor facility, in response to increased global investment in nuclear-power plants. Small Stamford toymaker Leisure Learning Products has sold four million sets of its “MightyMind” line of problem-solving toys to customers in 22 countries. (“We buy wood from Germany,” the company’s founder recently explained, “We buy some of our tiles from China, and we turn around and send it back to them.”) And besides, who says manufacturing is the only high-paying work around? Dan Griswold of the Cato Institute’s Center for Trade Policy Studies recently debunked anti-free traders’ claim that “deindustrialization” means the jobs available to ex-factory workers are low-paid positions in malls and fast-food joints. Of the five employment categories that saw the most U.S. job growth between 1997 and 2007, four paid slightly higher average wages than manufacturing. Positions in construction, professional/business services, finance, and education/health services all now pay wages that surpass manufacturing’s average of $17.12 an hour. Connecticut’s strong financial-services sector is perfectly positioned to play a major role in foreign demand for American expertise. According to the Coalition of Service Industries, “exports of private services reached $455 billion in 2007, a sharp jump from $404 billion in 2006.” Protectionists don’t mention it very often, but the U.S. runs a trade surplus in services. When it comes to trade, Washington has been a friend to Connecticut for decades. If that changes, the Nutmeg State’s economic health, already at risk from home-grown policy blunders, will only worsen. D. Dowd Muska is a writer, commentator and public-policy researcher. He can be reached at muskacolumn@cox.net. # # # # # |
