Opponents of trade emphasize the potential job loss due to trade without crediting the role of exports in promoting income as well as employment growth. In fact, exports are now one of the main engines of economic growth for the U.S. economy. Within a span of just 8 years, the number of jobs supported by exports has seen an increase of 61 percent from 6.3 million in 1983 to 10.3 million in 1994. Preliminary research suggests the number of jobs supported by exports may have been as high as 11 million in 1995. MIT economist Paul Krugman convincingly argues that productivity growth is the most important source of real wage growth.
Recent research shows that exports spur productivity growth and, hence, real wage growth.
Thus, it should come as no surprise that wages of workers whose jobs were supported by exports were 13 percent higher than the national average in 1994. As strong as the number of jobs supported by exports appear, it may well be understated. A recent report by the Census Bureau concludes that understatement of merchandise exports may be as high as 10 percent of the reported value. It also means that Davis' estimate of jobs supported by exports may be low. Closer to home, many Americans are concerned about the possible adverse effects of free trade agreements with developing countries, especially our southern neighbors.