Two decades ago, this blue-collar city of wide streets and two-story storefronts hummed with commerce. Factories, mostly textile mills, employed a quarter of the workforce and the county unemployment rate had fallen to as low as 4.2 percent by 1997. At a community meeting at the North Lake Country Club, mill owners and bankers sang the praises of the North American Free Trade Agreement (NAFTA), which three years earlier had pushed wide open the doors of trade with Canada and Mexico.
Tom Fitch did not blend in. Amid a sea of suits, the sign-shop owner stood out in his blue jeans and ball cap.
“Here, these guys were saying how their profits had increased, and I stood up and asked them why they couldn’t see what was in front of their faces: This was going to destroy our town,” recalls Mr. Fitch.
He turned out to be more prescient than the bankers. Shelby went on to lose 40 percent of its factory workers between 1999 and 2014. Adjusted for inflation, income for the typical middle-income household dropped 20 percent (nationally, it dropped, too, but at only half that rate), while the poverty rate soared to 29 percent, nearly double the US average. Once China gained preferential access to US markets in 2001, Shelby and surrounding Cleveland County never again saw unemployment fall below 5 percent.
Donald Trump’s repeated attacks on current trade deals match “what I feel in my heart,” says Fitch, whose sign shop still operates in Shelby, though the country club has closed.
Debate over the pros and cons of freer trade has moved from the kitchen table to the political stage. Clearly, it has helped China and much of Asia, lifting hundreds of millions of workers out of poverty, as well as American consumers, who have saved many millions of dollars by buying foreign electronics, cars, and furniture for less than if they were made domestically.
But workers should have benefited, too, by moving to more productive jobs, according to orthodox economic theory. That hasn't happened, not for many lower-income workers in Britain, who voted June 23 to leave the European Union in a broad rejection of globalization, nor for their counterparts in the United States.
More than a decade after opening their doors to Chinese goods, many Americans have endured unemployment or low pay for longer than anyone expected, widening the gap between rich and poor. Except for Mr. Trump on the right and Sen. Bernie Sanders (I) of Vermont on the left, presidential candidates who lambasted recent trade deals, the political establishment by and large has yet to grasp the enormity of the problem.
Part 1: The harsh downside of free trade – and the glimmer of hope
Part 2: The surprising truth about American manufacturing
Part 3: What 'good' free trade looks like
Part 4: Why, this time, free trade has hit American workers so hard
Part 5: What can be done for free trade's working-class 'losers'
Why, this time, free trade has hit American workers so hard - CSMonitor.com