But more recent experience is very interesting. Since 1995 we have seen particularly rapid gains for those at the bottom of the income distribution. According to the Economic Policy Institute, those in the lowest quintile have had real wage increases of 10.3 percent, almost twice the 5 percent increase for those at the top. And this despite the problems that have occurred in world markets as a result of the Asian crisis . I would emphasize, however, that trade protection is not the answer to either of these concerns.
Protection inevitably raises costs to consumers that far outweigh the gains to producers.
The key response lies in an economy that is sufficiently flexible to meet the challenge of reaping those benefits. Maintain growth at home and abroad. Keeping the economy as close to full employment while maintaining low inflation. It is interesting for example to look at what has happened to dislocated workers as the economy has moved closer to full employment. Every 2 years, the Bureau of Labor statistics conducts a survey of workers who were displaced from jobs they had held for 3 years or more.