In recent years, the range of U.S. local jobs that are exposed to competition from abroad has expanded markedly. This has made offshoring a hot political issue that has attracted a great deal of attention in campaigns. Offshoring triggers sentiments of economic nationalism and fears of decline. It also allows opposition leaders to explicitly link job losses with incumbent (trade) policies. In a new “article”:http://journals.cambridge.org/action/displayAbstract?fromPage=online&aid=8239848&fulltextType=RA&fileId=S000305541000050X (gated) in the _American Political Science Review,_ “Yotam Margalit”:http://www.columbia.edu/~ym2297/ finds that job losses that are linked to trade result in significantly greater electoral losses for the incumbent president than other job losses. The analysis also suggests that social policies can help mitigate some of these electoral losses:
bq. [..] voters were substantially more sensitive to the loss of local jobs when it resulted from foreign competition, particularly from offshoring, than to job losses caused by other factors. Yet, I also find that between 2000 and 2004, the anti-incumbent effect of trade-related job losses was smaller in areas where the government certified more of the harmed workers to receive special job training and income assistance.
The substantive impact of the effect is modest but still politically relevant:
bq. I find that the overall national electoral effect of trade-related job losses in the 2004 elections was about a 0.2 percentage point drop in support for the incumbent, equivalent to the electoral effect of an increase of half a percentage point in counties’ unemployment rates between the elections. Notably, my analysis suggests that this effect was probably offset by the electoral gains associated with trade’s contribution to the national economy. Yet, I also find significant geographic variation in the electoral impact of job losses stemming from trade, whereby the president’s support was almost unaffected in some areas but dropped by upward of 4 percentage points in the hardest hit counties. In Wisconsin, a state with 10 electoral votes, the electoral impact associated with job losses due to foreign competition was in fact larger than the swing needed to overturn the election’s outcome. These findings suggest that the localized electoral impact of trade-related job losses, although modest at the national aggregate, could still have a significant influence on a government’s trade agenda by potentially risking the president’s chances in specific closely fought states or by threatening the electoral chances of some of the administration’s allies in Congress, thus depriving the president’s trade policy of crucial support in the legislature.
The economic data provide no reason to believe that these concerns should become any less prevalent in the coming years. Outsourcing continues to increase and unemployment remains high. Margalit’s analysis suggests that while this issue is not necessarily the most prominent nationally, it may well swing some local races. Perhaps predictive models of the 2012 elections should take this into account?