New Economic Policy Institute Report on Job Losses

Nearly 77 Percent of Total Job Losses Are in U.S Manufacturing Sector; High-Tech Manufacturing Hit Hardest; Every Congressional District Suffers Losses

Washington, D.C. –(ENEWSPF)–August 23, 2012.  More than 2.7 million American jobs—2.1 million of them in manufacturing—have been lost or eliminated since 2001, due to the United States’ mushrooming trade deficit with China since that country joined the World Trade Organization (WTO) a decade ago, according to a report released today by the Economic Policy Institute (EPI).

“The United States is piling up foreign debt and losing export capacity, and the growing trade deficit with China has been a prime contributor to the crisis in U.S. manufacturing employment,” said the report’s author, Robert E. Scott, EPI’s Director of Trade and Manufacturing Policy Research.

Between 2001 and 2011, the trade deficit with China eliminated or displaced more than half of all U.S. manufacturing jobs lost over that period. The growing trade deficit with China has cost jobs in every congressional district in all 50 states as well as in the District of Columbia and Puerto Rico.

The total losses include 662,100 jobs from 2008 to 2011 alone—even though imports from China and the rest of the world plunged in 2009 before recovering and surpassing the previous peak reached in 2008. The trade deficit in the computer and electronic parts industry grew the most, displacing more than 1 million jobs in high-tech industries. In fact, rapidly growing imports of computer and electronic parts, including computers, semiconductors and audio-video equipment, accounted for nearly 55 percent of the $217.5 billion increase in the U.S. trade deficit with China between 2001 and 2011.

“The EPI report offers convincing evidence that, unless China’s trade violations and currency manipulation are challenged forcefully, our growing trade deficit will continue to cripple the fledgling U.S. jobs recovery,” said Scott Paul, Executive Director of the Alliance for American Manufacturing (AAM), a non-profit, non-partisan partnership of some of the nation’s leading manufacturers and the United Steelworkers (USW).

While groups like the US-China Business Council have reported on the growth of U.S. exports to China from 2000-2011, this report gives a broader and more accurate viewpoint of what has occurred. Paul said that imports from China have in fact far outpaced exports in the same timeframe, and America’s annual trade deficit with China has more than tripled since 2000.

“Exports to China may have increased since 2000, but imports have soared dramatically in that time,” explained Paul. “This report helps to quantify the millions of U.S. jobs lost due to this widening gulf.”

The study found the hardest-hit congressional districts were in California, Texas, Oregon, and Massachusetts, and Minnesota. Some districts in North Carolina, Georgia, Colorado, and Alabama also were hit especially hard by job displacement in a variety of manufacturing industries, including computers and electronic parts, textiles and apparel, and furniture.

The jobs impact of the China trade deficit is not restricted to job loss and displacement. Competition with China also has driven down wages for workers in U.S. manufacturing and reduced the wages and bargaining power of similar, non-college-educated workers throughout the economy who comprise roughly 70 percent of the workforce, or about 100 million workers, the report found.

China is the most important source of downward wage pressure from trade because its products make up such a large portion of U.S. imports. Indeed, China was responsible for 55.3 percent of U.S. non-oil imports from less-developed countries in 2011.

Other industrial sectors hit hard by growing trade deficits with China between 2001 and 2011 include apparel and accessories (211,200 jobs), textile mills and textile product mills (106,200), fabricated metal products (120,600), furniture and fixtures (80,700), plastic and rubber products (57,600), motor vehicles and parts (19,800), and miscellaneous manufactured goods (111,800). Several service sectors also were hit hard by indirect job losses, including administrative, support, and waste management services (160,600), and professional, scientific, and technical services (145,000).

The states suffering the biggest net losses were California (474,700 jobs), Texas (239,600), New York (158,800), Illinois (113,700), North Carolina (110,300), Florida (106,100), Pennsylvania (101,200), Ohio (95,900), Massachusetts (92,700), and Georgia (87,300).

The report’s author, Scott, said the job displacement estimates in the study are conservative. They include only the direct and indirect jobs displaced by trade, and exclude jobs in domestic wholesale and retail trade or advertising, and re-spending employment. He noted that during the Great Recession of 2007–2009, and continuing through 2011, jobs displaced by China trade reduced wages and spending, which led to further job losses in the economy.

“This study makes clear that voter concerns about our lopsided trade balance with China are absolutely justified,” said AAM’s Paul. “The presidential candidates would be well-advised to consider prompt action to address the serious imbalances in our trade relationship with China, and to offer voters a clear vision of how to restore U.S. manufacturing competitiveness in the face of China’s ongoing mercantilism.”

Paul added, “Both Congress and the Administration have missed opportunities to reduce our trade deficit with China, and consequently stem the offshoring we still see. Stopping China’s currency manipulation and cheating on its trade obligations is key to making America more competitive, but we must also take concrete steps here to boost jobs: investing in training, infrastructure, and innovation and forming a manufacturing strategy are critical.”

A copy of the full report, “The China Toll: Growing U.S. trade deficit with China cost more than 2.7 million jobs between 2001 and 2011, with job losses in every state,” is available by Clicking Here.