Tuesday, September 30th, 2014
Half-True
Feingold
"According to independent analysis, unfair trade deals have resulted in the loss of over 64,000 jobs in Wisconsin ... But Ron Johnson favors those deals."

Russ Feingold on Thursday, September 30th, 2010 in campaign TV and radio ads

Sen. Russ Feingold says unfair trade deals have cost 64,000 jobs in Wisconsin

Russ Feingold radio ad

Even in a U.S. Senate contest of ideological near-opposites, the gap between Democratic incumbent Russ Feingold and Republican challenger Ron Johnson on trade issues is notable.

Feingold, supported by labor unions, consistently has voted against foreign-trade agreements over his three terms, saying they unfairly punish Wisconsin workers -- especially on the manufacturing line.

Johnson, the manufacturing plant executive, extols global trade as the gateway to job growth and higher profits, citing his own Oshkosh firm as an example. There are unfortunate casualties, he says, but they are necessary to boost employment overall.

With the unemployment rate stubbornly high, a new TV and radio ad blitz from Feingold is aimed at hitting home with disgruntled workers.

Here is the central claim, stated on the radio, implied with graphics on TV:

"According to independent analysis, unfair trade deals have resulted in the loss of over 64,000 jobs in Wisconsin. That’s why Russ Feingold has consistently voted against them. But Ron Johnson favors those deals."

There is a lot in that statement, but we’ll take it apart piece by piece.

First, the trade deals being cited are those such as the North American Free Trade Agreement (NAFTA), and the Central American Free Trade Agreement (CAFTA).

The radio ad cites no source or time frame for the 64,000 number, but Feingold senior campaign strategist John Kraus says it came from a database generated by Global Trade Watch, a project of the liberal consumer advocacy group Public Citizen.

Is that group independent, as the ad claims?

Public Citizen is a leading critical voice on trade deals, so it comes to the issue from that perspective. The group holds Feingold in high regard because his stance fits the group’s agenda. It has publicly praised Feingold for campaign finance reform and his trade votes, and even filed a legal brief with the U.S. Supreme Court against a challenge to the McCain-Feingold campaign finance reforms.

With that in mind, let’s look at the origin of the numbers.

The group’s job-loss database is based on U.S. Department of Labor data from a program that helps workers who have lost their jobs as a result of foreign trade. It’s called the Trade Adjustment Assistance program.

The U.S. Department of Labor does not use that data to measure job losses due to foreign trade, a spokesman said, because of undercounting (not every company or union applies to the voluntary program) and overcounting (some workers apply but aren’t ultimately laid off).

The department doesn’t specify the extent of either over- or under-counting.

But researchers, even pro-trade deal ones, say the Labor Department program serves only a fraction of those who lose their jobs in industries facing heavy  import competition. A 1999 study by the Peterson Institute for International Economics -- a group in favor of free trade -- found that only 10% of those workers showed up in the federal program.

Indeed, Gary Clyde Hufbauer, a Peterson Institute expert, said the data is commonly used by researchers as the best available for showing how trade can close factories.

The 64,000 figure cited by Feingold goes back to 1994, when NAFTA kicked in.

When PolitiFact Wisconsin downloaded company-by-company figures from the group’s database, it came up with the same figure.

But there’s a larger issue on claims of job loss.

Looking at one side of the coin, as Feingold does, provides a one-sided view. It does not take into account job gains made elsewhere in part by trade agreements.

Said Hufbauer: "It isn’t the whole story."

Hufbauer said trade deals had helped fuel big increases in trade, though in his view the business climate, monetary policy and spending policy are much bigger drivers for job losses and gains than trade pacts.

So, in presenting only one side of the coin, Feingold leaves out important context.

This leaves us with Feingold’s suggestion that the trade deals he opposed -- and Johnson supports -- were "unfair."

The characterization depends on your point of view.

In short, Feingold believes they are "unfair" to workers who lose their jobs. Johnson says they are fair because long-term they are the engine behind the wheels of capitalism.

Johnson says he would not support an "unfair"’ deal.

He has not addressed every trade deal specifically, but at a July WisPolitics luncheon, Johnson did say he would have supported NAFTA, favored-nation status for China and the pending Korea-U.S. trade pact. Feingold uses quotes from that luncheon in his ad, including this one:.

"Yeah, I think history has proven if you really take a look at the economic statistics, free trade works, so I’m definitely supportive."

Johnson emphasized "free and fair" trade, something omitted from the ad.

The ad also quotes Johnson as saying:

"In a free market capitalist system, there are always winners and losers. It’s creative destruction."

The ad leaves off the rest of the "creative destruction" quote: Johnson said the natural cycle of business births and deaths was unfortunate, "but let’s face it -- if it weren’t for that we’d still have buggy whip companies."

So where does this leave us?

Russ Feingold uses Ron Johnson’s own words to capture his rival’s support for several trade deals that Feingold asserts cost the state some 64,000 jobs. The source of the analysis is not independent, as Feingold claims, but it uses numbers both sides agree are the best available -- and ones that may vastly understate the number of jobs lost. Nevertheless, those numbers leave out the other side of the equation -- jobs created through the deals. As for defining the deals as "unfair," it is a characterization by Feingold that is disputed by Johnson.

We rate Feingold’s claim Half True.