Trade deficit with China cost nearly 2.8 million U.S. jobs since 2001
September 22, 2011 | 9:33 am
The growing trade deficit with China has eliminated or displaced nearly 2.8 million U.S. jobs since 2001 -– or about 2% of all domestic employment during that period, according to a briefing paper from the Economic Policy Institute.
California was the hardest hit, losing nearly 455,000 jobs from 2001 to 2010 due to trade with the Asian giant, according to Robert Scott, the institute’s director of trade and manufacturing policy research. Texas lost nearly 233,000 positions the same way.
The increase in imports from China is only part of the picture, according to Scott. Since the Chinese yuan is pegged to the U.S. dollar, the currency remained artificially low, making U.S.-made goods more expensive in China and pushing down exports.
And heavy competition and cheap labor from abroad has pushed down wages for U.S. workers and reduced their bargaining power -– especially among the 70% of the workforce without a four-year college degree. In 2006, for example, a full-time median-wage earner lost $1,400 due to globalization, according to the report.
Since China entered the World Trade Organization in 2001, the trade deficit has boomed to $278 billion in 2010 from $84 billion in 2001.
Over that period, nearly 70% of the U.S. jobs lost were in manufacturing. Factory positions working with computer and electronic parts were especially depleted, but other jobs in apparel, textile fabrics and motor vehicles and parts were also significantly affected.