Costly Jobs February 2011 THEORETICAL OVERVIEW more likely than the lower half"(Blinder 2009,77). AND BACKGROUND This implies that up to 38 million U.S.jobs could po- A large body of research examines how the distributive tentially be offshored in the coming years.Jensen and Kletzer (2008)estimate the figure to range between consequences of globalization,particularly its impacts 15 million and 20 million jobs,still a sizable portion on the labor market,affect various political outcomes. of the U.S.labor force.In addition,offshoring could For example,some scholars attribute the growth in social spending to a shift in the public's preferences adversely affect workers whose jobs are not outsourced on welfare policy wrought by economic openness (e.g., by suppressing wages of certain low-skilled sectors Burgoon 2001;Cameron 1978;Rodrik 1998).Others in large economies (Grossman and Rossi-Hansberg assign an important role to the preferences of the con- 2008).Voters may thus be more electorally sensitive to job losses that result from offshoring because it is per- stituents in shaping the policy positions that elected ceived as an emerging threat to a broad segment of the officials take on trade(e.g.,Dutt and Mitra 2002;Mayer population. 1984:Milner and Kubota 2005).These studies rely on the assumption that citizens will electorally punish Intensity of Media Coverage.The very visible na- candidates that ignore these preferences induced by economic openness.Yet,as noted,very little empirical ture of offshoring (i.e.,of a local plant relocating its operations abroad)might be drawing greater media evidence has been put forward to date to establish this attention to instances of job losses due to this specific key assumption. cause.Because the media has substantial influence over For trade openness to have such an effect on vot- the issues that voters use to assess politicians (e.g. ing behavior,two conditions must be met:(1)voters need to be able to make a connection between trade Iyengar and Kinder 1987;Miller and Krosnick 2000), openness and its impact on their well-being,and(2) more frequent reporting on job losses when caused by offshoring may bring about a stronger shift in citizens the impact needs to be sufficiently meaningful to in- vote choice in localities hurt by this form of foreign fluence their voting preferences.So far,the empirical competition literature has predominantly offered evidence on the first condition.By examining individual-level survey data,a number of studies find that people's preferences Severity of Consequences.Empirical analyses show that displaced workers in import-competing manufac- on trade policy correlate with the labor market conse- turing are on average older and less educated,tend quences of trade (e.g.,Mayda and Rodrik 2005;Scheve to suffer lower reemployment rates,and experience and Slaughter 2001).Baker(2005)offers cross-national more sizable earning losses postplacement than the evidence that people's attitudes on trade policy reflect average displaced worker in the non-manufacturing the effect of trade not only on employment,but also on sector (Kletzer 2001,2004).7 Voters in communities consumption options.Taken together,these empirical hurt by trade might therefore be more electorally re- regularities suggest that people do make a connection sponsive because the consequences of trade-related job between openness to trade and its impact on their ma- displacements on the workers and their families are terial well-being. However,evidence on the second condition (i.e.,on more damaging in objective terms. the electoral consequences of openness)is a lot more Clarity of Responsibility.Voters tend to punish tentative.In fact,some studies argue that if govern- elected officials for adverse outcomes in conditions ments are perceived by voters to be constrained by when assignment of responsibility is clearer(e.g.,Pow- the international market,economic integration may decrease the prevalence of economic voting (Hellwig ell 2000:Powell and Witten 1993).8 If job losses due to trade are perceived by the electorate as a direct 2001:Hellwig and Samuels 2007).Yet,other findings in the literature point to several reasons why jobs lost due outcome of government policy (e.g.,due to the signing to economic openness might bring about a uniquely of a trade agreement),then people's vote choice might be more affected than when the cause of the job loss is strong electoral response. less clear. An Emerging Threat.Offshoring,particularly in the Economic Nationalism and Ethnocentricism.A services sector,is a relatively new phenomenon that is predicted to accelerate dramatically over the next number of studies find a close empirical relationship two decades.As Blinder(2006)notes,"We have so far barely seen the tip of the offshoring iceberg,the even- 6 Furthermore.even if voters themselves are shielded from the threat tual dimensions of which may be staggering"(114) of offshoring but perceive it as detrimental to the broader U.S.labor According to his estimates,"offshoring encompasses force,sociotropic concerns may also heighten voter responsiveness between 22%and 29%of all the jobs in the 2004 U.S in the face of trade-related job losses (e.g.,Feldman 1982;Sears and workforce,with the upper half of that range perhaps Funk1990). 7 The experiences of workers that lost their job due to trade-related competition are quite similar to those of workers in the nontradeable S Of course,one must keep in mind that the aggregate number of manufacturing sector. jobs in an economy is primarily a function of the size of the labor The argument about clarity of responsibility typically centers on force.Therefore,when discussing trade-related job losses,the issue the political context (e.g.,the electoral system in place).Yet,it is also is not a decrease in the aggregate number of jobs in the economy but likely to apply to the extent to which voters can attribute a specific rather a change in the sectoral composition of employment. outcome to government policy. 168Costly Jobs February 2011 THEORETICAL OVERVIEW AND BACKGROUND A large body of research examines how the distributive consequences of globalization, particularly its impacts on the labor market, affect various political outcomes. For example, some scholars attribute the growth in social spending to a shift in the public’s preferences on welfare policy wrought by economic openness (e.g., Burgoon 2001; Cameron 1978; Rodrik 1998). Others assign an important role to the preferences of the con￾stituents in shaping the policy positions that elected officials take on trade (e.g., Dutt and Mitra 2002; Mayer 1984; Milner and Kubota 2005). These studies rely on the assumption that citizens will electorally punish candidates that ignore these preferences induced by economic openness. Yet, as noted, very little empirical evidence has been put forward to date to establish this key assumption. For trade openness to have such an effect on vot￾ing behavior, two conditions must be met: (1) voters need to be able to make a connection between trade openness and its impact on their well-being, and (2) the impact needs to be sufficiently meaningful to in- fluence their voting preferences. So far, the empirical literature has predominantly offered evidence on the first condition. By examining individual-level survey data, a number of studies find that people’s preferences on trade policy correlate with the labor market conse￾quences of trade (e.g., Mayda and Rodrik 2005; Scheve and Slaughter 2001). Baker (2005) offers cross-national evidence that people’s attitudes on trade policy reflect the effect of trade not only on employment, but also on consumption options. Taken together, these empirical regularities suggest that people do make a connection between openness to trade and its impact on their ma￾terial well-being. However, evidence on the second condition (i.e., on the electoral consequences of openness) is a lot more tentative. In fact, some studies argue that if govern￾ments are perceived by voters to be constrained by the international market, economic integration may decrease the prevalence of economic voting (Hellwig 2001; Hellwig and Samuels 2007). Yet, other findings in the literature point to several reasons why jobs lost due to economic openness might bring about a uniquely strong electoral response.5 An Emerging Threat. Offshoring, particularly in the services sector, is a relatively new phenomenon that is predicted to accelerate dramatically over the next two decades. As Blinder (2006) notes, “We have so far barely seen the tip of the offshoring iceberg, the even￾tual dimensions of which may be staggering” (114). According to his estimates, “offshoring encompasses between 22% and 29% of all the jobs in the 2004 U.S. workforce, with the upper half of that range perhaps 5 Of course, one must keep in mind that the aggregate number of jobs in an economy is primarily a function of the size of the labor force. Therefore, when discussing trade-related job losses, the issue is not a decrease in the aggregate number of jobs in the economy but rather a change in the sectoral composition of employment. more likely than the lower half” (Blinder 2009, 77). This implies that up to 38 million U.S. jobs could po￾tentially be offshored in the coming years. Jensen and Kletzer (2008) estimate the figure to range between 15 million and 20 million jobs, still a sizable portion of the U.S. labor force. In addition, offshoring could adversely affect workers whose jobs are not outsourced by suppressing wages of certain low-skilled sectors in large economies (Grossman and Rossi-Hansberg 2008). Voters may thus be more electorally sensitive to job losses that result from offshoring because it is per￾ceived as an emerging threat to a broad segment of the population.6 Intensity of Media Coverage. The very visible na￾ture of offshoring (i.e., of a local plant relocating its operations abroad) might be drawing greater media attention to instances of job losses due to this specific cause. Because the media has substantial influence over the issues that voters use to assess politicians (e.g., Iyengar and Kinder 1987; Miller and Krosnick 2000), more frequent reporting on job losses when caused by offshoring may bring about a stronger shift in citizens’ vote choice in localities hurt by this form of foreign competition. Severity of Consequences. Empirical analyses show that displaced workers in import-competing manufac￾turing are on average older and less educated, tend to suffer lower reemployment rates, and experience more sizable earning losses postplacement than the average displaced worker in the non–manufacturing sector (Kletzer 2001, 2004).7 Voters in communities hurt by trade might therefore be more electorally re￾sponsive because the consequences of trade-related job displacements on the workers and their families are more damaging in objective terms. Clarity of Responsibility. Voters tend to punish elected officials for adverse outcomes in conditions when assignment of responsibility is clearer (e.g., Pow￾ell 2000; Powell and Witten 1993).8 If job losses due to trade are perceived by the electorate as a direct outcome of government policy (e.g., due to the signing of a trade agreement), then people’s vote choice might be more affected than when the cause of the job loss is less clear. Economic Nationalism and Ethnocentricism. A number of studies find a close empirical relationship 6 Furthermore, even if voters themselves are shielded from the threat of offshoring but perceive it as detrimental to the broader U.S. labor force, sociotropic concerns may also heighten voter responsiveness in the face of trade-related job losses (e.g., Feldman 1982; Sears and Funk 1990). 7 The experiences of workers that lost their job due to trade-related competition are quite similar to those of workers in the nontradeable manufacturing sector. 8 The argument about clarity of responsibility typically centers on the political context (e.g., the electoral system in place). Yet, it is also likely to apply to the extent to which voters can attribute a specific outcome to government policy. 168