For example, Harvard professor George Borjas and others find that, at most, trade could account for 15 percent of the increase in earnings differentials between college educated and high school educated workers during the 1980s. Skill-biased technological change seems to play a much larger role in growing returns to education. Another Harvard economist, Robert Lawrence, strongly disputes the assertion that trade eliminates high paying jobs for unskilled manufacturing workers. Interestingly, Lawrence finds that in highly concentrated U.S. manufacturing sectors, where workers earn a premium over wages in manufacturing generally, wages of the unskilled workers actually increased by 57 percent between 1979 and 1990. This wage increase for unskilled workers occurred even while the overall wage premium for workers in these sectors was declining.
Trade promotes economic growth, which enlarges the pie for everyone to share.
A recent study by Harvard's Robert Barro examined the impact of openness to trade on growth rates. In his sample of 79 countries, those that are more open to trade grew on average 2.5 percent more rapidly over a 25 year period, than countries that are closed. Clearly, open trade puts some workers at risk, but the risks they face are principally the result of structural changes in the U.S. economy that would occur even if trade in manufactured goods were banned. Consumers have a wider range of product choices at lower prices than they would have without trade. Even workers whose wages are impacted will share in gains resulting from lower prices.