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Globalization & the China Trade Shock

In its heyday, the United States was an industrial powerhouse. Having a job in manufacturing could catapult you into the middle class. But since 1990, the percent of people with manufacturing jobs has almost halved.

As the US manufacturing economy slowed, China’s ramped up. The resulting trade shock accelerated US job loss and factory closures as China took an increasingly larger share of the US market.

US cities and towns, often in the Midwest and Southeast, that produced these goods bore the brunt of the trade shock. Factories shuttered and local economies were decimated. Less-skilled and less-educated workers couldn’t simply pick up and move to find a new job, and they were increasingly forced to turn to government assistance.

Year after year the local economy didn’t recover creating a powder keg of social discontent: marriage rates dropped, child poverty spiked, substance use increased, and people began to turn toward more extreme politics.

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