Imagine the entire population of the Memphis, Little Rock, Baton Rouge, and Jackson, Miss., metropolitan areas gone. Vanished. Kaput.
That roughly equates to the 2.4 million U.S. jobs lost or displaced between the time China entered the World Trade Organization in 2001 and 2008.
In Tennessee, 51,400 jobs gone; in Mississippi, 19,400; in Arkansas, 19,800, and in Louisiana, 17,400. Those are the equivalents of small cities or, in some instances, the population of an entire county.
While U.S. agriculture/forestry/fisheries is one of a handful of sectors that has a positive trade balance with China, with 27,274 jobs added during the 2001-1008 period, ag-related industries took it on the chin, losing hundreds of thousands of jobs.
Nearly 90,000 textile and textile products jobs gone; 150,000-plus apparel/accessories jobs; almost 55,000 in leather and products; nearly 45,000 in wood products/paper; and nearly 85,000 in furniture.
The U.S. is hemorrhaging millions of jobs as a result of the nation’s growing trade deficit, largely with China, notes a just-released report from the Economic Policy Institute. The report is the first to break down job losses at the congressional district level. Using the EPI data, the Alliance for American Manufacturing has created an interactive map that shows the losses by district (The China Job Drain).
The report cites China’s currency manipulation as a major cause of the burgeoning U.S. trade deficit, noting that China has tightly pegged its currency to the U.S. dollar “at a rate that encourages a large bilateral surplus with the U.S.”
Other contributors to the deficit include “massive industrial subsidies in China, lax labor and environmental law enforcement, intellectual property theft/piracy, and Chinese policies that block market access to U.S. firms.”
All this makes China’s yuan “artificially cheap, providing an effective subsidy for Chinese exports,” says Robert Scott, EPI’s director of international programs and author of the report. “Unless China raises the real value of the yuan by at least 40 percent and eliminates other trade distortions, the U.S. trade deficit and job losses will continue to grow rapidly.”
Despite ongoing pressures by the U.S. government, China has steadfastly refused to revalue its currency. It is estimated by the International Monetary Fund that China adds more than $30 billion each month to reserves already near $2.5 trillion. The IMF projects that China’s surplus for 2010 alone will top $450 billion — that’s more than 10 times the amount in 2003.
“China’s cheating is causing America to lose more than just the capacity to make widgets in the one-sided trade arrangements,” says Scott Paul, AAM executive director. “Sophisticated electronics and high tech products that once were made in the U.S. are increasingly being made in China; we are losing more and more of these good jobs.”
Adding insult to injury, the competition from China and other low wage countries has driven down wages for the U.S. manufacturing sector.