Tuesday, October 1, 2013

It isn't the recession, stupid, it's China

China's unfair trade practices cost U.S. workers $37 billion in just one year, according to a new report by our friend Rob Scott at the Economic Policy Institute.

That comes out to an average of $13,505 for every U.S. worker who lost a job in manufacturing because of China's rapacity. Scott assumed (correctly, we think) that workers laid off after their factory moved to China ended up making far less money as fast-food cooks, rental counter clerks and call center workers.

Most news reports blamed "the recession" for the disappearance of good jobs. The Washington Post, for example, reported on a National Employment Law Project study in February:
Mid-wage occupations, paying between $13.83 and $21.13 per hour, made up about 60 percent of the job losses during the recession. But those mid-wage jobs have made up just 27 percent of the jobs gained during the recovery. 
By contrast, low-wage occupations paying less than $13.83 per hour have utterly dominated the recovery, with 58 percent of the job gains since 2010.
Scott, though, puts the blame where it belongs: on China. He examined the impact of the U.S. trade deficit with China after it entered the World Trade Organization in 2001. Here are some of his other findings:
  • The increase in the U.S. trade deficit with China between 2001 and 2011 eliminated 2.7 million U.S. jobs, over 2.1 million (76.9 percent) of which were in manufacturing.
  • Growing U.S. trade deficits with China between 2001 and 2011 displaced a disproportionately large number of good jobs for minority workers—958,800 good jobs with excellent benefits, 35.0 percent of total jobs displaced.
  • China trade cost U.S. workers 997,700 good jobs with excellent benefits for workers without any college education 
  • Workers with a bachelor’s degree or more education lost 1.057 million jobs
  • Rapidly growing China trade deficits cost nearly 1.1 million jobs in computer and electronic products between 2001 and 2011.
Read the whole thing here.

Any source

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