Fareed Zakaria, Robert Samuelson's fellow columnist at Newsweek, joins the choir of trade damage deniers. Zakaria's line is that everything is fine, so why would anyone worry about trade. To make his case, he tells readers that in the last twenty years "per capita GDP has roughly doubled." (Measured in 2000 dollars, per capita GDP rose from $25,382 in 1985 to $37,241 in 2005, an increase of 46.7 percent.) He notes the "stunningly low" 4.4 percent unemployment rate, and that "the median income of a family of four rose 23 percent between 1985 and 2005." Those less interested in cherry picking family types might have simply noted that the median family income rose by just 17.1 percent from 1985 to 2005. This increase is well below the 31.5 percent gain of the previous twenty years, and way below the 74.6% gain in the last two decades of the golden age, 1953-1973. Of course, there are issues of family size, and also the fact that much of these income gains result from more workers per household. If Mr. Zakaria wanted a measure of income growth that is independent of these problems, then he could have chosen to look at median wages. The median hourly wage rose 9.8 percent from 1985 to 2005. This is equal to about 5 years of wage growth during the golden age. If the point is that things could be worse, few would argue otherwise, but to claim that things are going great and that most of the population is seeing substantial benefits from the pattern of growth over the last quarter century is ridiculous. The typical worker has seen less progress in the last quarter century than in any comparable period in U.S. history. If Mr. Zakaria and Newsweek expect to be taken seriously in debates over trade, acknowledging reality would be a good place to start.
--Dean Baker
