Report ties Trump, trade wars to jobs slowdown

By: - March 11, 2020 7:00 am
Welding photo

Photo by Felipe Mosquera from Unsplash

Slower job growth and an increase in mass layoffs and plant closings in Wisconsin make President Donald Trump vulnerable in the state during this year’s reelection campaign, according to a report by a progressive  policy organization, released on Tuesday.

Trump’s trade war, which began in 2018 and included tariffs on imported goods from China, Europe, and other parts of the world, is a primary cause of those economic shifts, states the report, published by the Center for American Progress Action Fund.

Although Trump campaigned in Wisconsin and elsewhere promising to reverse the loss of manufacturing jobs under the North American Free Trade Agreement, enacted in the early 1990s during Bill Clinton’s first term as president, the report marshals data to show the state’s economy has been flagging since Trump took office.

“Yet nearly three years after Trump’s inauguration, the data increasingly show that the administration has not helped working-class Wisconsinites,” the report declares. “In fact, its policies have only exacerbated economic issues in Wisconsin—especially in areas that supported Trump in the 2016 election.”

Ryan Zamarripa, the report’s author, presented its findings in a conference call with media on Tuesday along with two Wisconsin state legislators, state Sen. Jeff Smith (D-Eau Claire) and state Rep. Amanda Stuck (D-Appleton), as well as Ben Wikler, chair of the Democratic Party of Wisconsin. Zamarripa is CAP Action Fund’s associate director of economic policy.

In the research, Zamarripa looked especially at the three Wisconsin metro areas: Racine, Oshkosh-Neenah, and Eau Claire — the only three metros in the state that flipped from voting to reelect Barack Obama in 2012 to voting for Trump in 2016. In all three, unemployment has been inching up over the last two years.

“Clearly the residents of these areas were drawn to Trump’s promises to revive American manufacturing and bring jobs back from abroad,” Zamarripa said. “Unfortunately, the data that have come out over the past year or so show that Trump’s chaotic trade war is having significant negative economic impacts on the working class Americans in these three communities and across Wisconsin in general.”

Citing Bureau of Labor Statistics data, the report found that Wisconsin added 136,200 jobs in Obama’s second four-year term, a 5.72% increase. In the first three years of Trump’s presidency, the state’s job growth is less than half that: 57,500, or 2.27%. And job growth decelerated in the second and third years of that period, the report states, tying that slowdown to Trump-administration-imposed import tariffs.

The tariffs drove up consumer prices and also prompted retaliatory tariffs on American exports, such as China imposed on American dairy products. One national study calculated the cost of tariffs to the average American family as $1,315 in 2019.

“Trump said that he would get tough on China but the only people who he’s been tough on and hurting with his erratic trade wars and  policy decisions are Wisconsin farmers and working families,” said Wikler. One out of 10 dairy farms in the state “closed their doors forever last year,” he added. “Farmers who are still open are still facing incredible hurdles, as the markets that they took decades to build have been destroyed by Trump’s policies.”

Smith said that at a meeting last week he held with agribusiness representatives, “one of the leaders told the room that 60% of his sales went to China before these trade wars.” Those sales have plummeted, Smith said, “and he knows he’s never going to get that back.”

The report states that mass layoffs, including from plant closings, jumped 25% to 18,949 in the two-year-period  2018-2019, compared with 15,154 in the previous two-year period of 2016-2017. Mass layoff data is found in required notices employers must file with the state Department of Workforce Development.

While it’s not always clear whether any one mass layoff is the direct result of trade turmoil, “the trend is pretty clear,” Zamarripa said. “Trump promised to stop the plant closures and to stop jobs from moving overseas, and he hasn’t done that.”

In a survey released in January of Wisconsin business executives, Wisconsin Manufacturers and Commerce found that 50% reported that their businesses had been hurt by the Trump administration tariffs.

Despite that, 79% said they still supported the tariffs as a means of forcing trading partners such as China to play fair. But executives and rank-and-file workers don’t necessarily agree.

In a recent meeting that Stuck had with United Steelworkers union members in her district, “they were talking about how at first they were somewhat supportive of the tariffs, knowing that we did need to address trade somehow,” she said. “However, the way these tariffs were implemented hurt them dramatically. And they saw shops close, they saw layoffs directly because of the tariffs. And so we know it really has been hurting people here.”

Stuck spoke of a meeting she had last year with contractors and unions in which the tariffs came up. “Certainly some of those business owners had that same perspective that showed up in that survey from WMC…. They were saying, ‘Yeah, it’s hurting us. But you know, we think it’s okay to do,’” she said.

“But the workers who were at the roundtable [said], ‘You know, we’re the ones doing rotating layoffs, are the ones who are feeling this impact directly.’ So I do think the workers see a different side of it.”

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Erik Gunn
Erik Gunn

Deputy Editor Erik Gunn reports and writes on work and the economy, health policy and related subjects, for the Wisconsin Examiner. He spent 24 years as a freelance writer for Milwaukee Magazine, Isthmus, The Progressive, BNA Inc., and other publications, winning awards for investigative reporting, feature writing, beat coverage, business writing, and commentary. An East Coast native, he previously covered labor for The Milwaukee Journal after reporting for newspapers in upstate New York and northern Illinois. He's a graduate of Beloit College (English Comp.) and the Columbia School of Journalism. Off hours he is the Examiner's resident Springsteen and Jackson Browne fanboy and model railroad nerd.