- Question
How does free trade affect jobs?
Does free trade help or hurt employment? This entry maps the competing positions on how free trade affects jobs — that it creates them, that it destroys them, and that it has no net effect either way.
Free trade creates jobs
This position holds that opening markets raises employment overall, because producers gain access to larger markets, cheaper inputs and goods leave households and firms with more to spend, and the activity that follows from both creates work.
Free trade destroys jobs
This position holds that free trade destroys jobs, because producers exposed to lower-cost competition contract or close, and the work lost in those industries and the places built around them is not replaced by whatever opens elsewhere.
Free trade has no effect on jobs
This position holds that free trade shifts jobs between sectors without changing how many there are overall, since total employment is set by demand, the size of the workforce and policy rather than by the pattern of what a country buys and sells.