West Coast states hardest hit
Trade deficit with China costs over 2 million U.S. jobs
WASHINGTON, D.C. — The dramatic
rise in the U.S. trade deficit with China over
the last decade has cost the United States
more than 2 million jobs, according to a new
report by the Economic Policy Institute
(EPI).
Every state has been impact, but none
harder than the West Coast, led by California
with an estimated 269.300 lost jobs. Accord-
ing to the EPI report, 25,700 jobs were lost in
Oregon and 27,000 jobs were lost in Wash-
ington.
In the report, “Costly Trade With China,”
EPI economist Robert Scott says the trade
deficit with China — now at $235 billion —
has displaced production that supported
2,166,000 U.S. jobs.
To make matters worse, this year’s first-
quarter $46.4 billion deficit is twice as large
as in the same period last year.
Scott says the vast bulk of the job dis-
placement (1.8 million) has come since
China entered the World Trade Organization
in 2001.
“China’s entry into the WTO was sup-
posed to require that it open its markets to
imports from the United States and other na-
tions,” Scott said. “Instead, it has further tilted the
international economic playing field against do-
mestic workers and firms, and in favor of multina-
tionals.”
Scott said this has accelerated “the global race
to the bottom” in wages and environmental quality
and has caused the closing of thousands of U.S.
factories.
The manufacturing sector has been hardest hit,
Scott reported. He said that more than one-third of
workers displaced from manufacturing drop out of
the labor force. Those who do find re-employment
saw their wages drop by 11 to 13 percent.
Specifically: between 1997 and 2001, growing
trade deficits displaced an average of 101,000 jobs
per year, or slightly more than the total employ-
ment in Manchester, New Hampshire.
Since China entered the WTO in 2001, job
losses increased to an average of 441,000 per year
— more than the total employment in greater Day-
ton Ohio. Between 2001 and 2006, jobs were dis-
placed in every state and the District of Columbia.
Nearly three-quarters of the jobs displaced were in
manufacturing industries.
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“But you wouldn’t know anything is wrong if
you listened to the Bush Administration,” writes
Tula Connell of the national AFL-CIO.
Siting a May 3, USA Today report, Connell said
U.S. Treasury Secretary Henry Paulson insists that
Bush Administration initiatives are spurring China
to quicken its economic reforms.
“We’ve made a lot of progress,” he told the
newspaper.
Responds Connell, “Paulson has traveled to
China multiple times since he became treasury sec-
retary last year, but so far, all his nice talk with Chi-
nese officials has failed to con-
vince China to lower its trade
barriers and bring its laws and
regulations into compliance
with international standards.”
As economist Thomas Pal-
ley noted: “In retrospect, the
2000 U.S. decision to perma-
nently open its markets to
Ray Thomas
Kimberly Tucker
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NORTHWEST LABOR PRESS
China seems poorly conceived. That deci-
sion was driven by manic optimism about
globalization that pushed a biased benefit —
cost calculus that ignored economic and po-
litical reality.
“Opponents claim that the trade deficit
stems from lack of U.S. saving, not ex-
change rates. This argument misunderstands
market economics. Reducing the trade
deficit requires increasing exports and de-
creasing imports. That requires inducing for-
eigners to buy more U.S. made goods, and
inducing Americans to ‘switch’ their spend-
ing from imports to domestic made goods.
Market economies accomplish this through
changed relative prices. That calls for ex-
change rate adjustment that makes foreign
goods more expensive for U.S. consumers
and U.S. goods cheaper for foreign con-
sumers.”
At the International Economic Summit in
Butte, Montana two weeks ago, political
writer and journalist David Sirota noted how
easily the business-backed participants —
such as Federal Reserve Chairman Ben
Bernanke and Harold McGraw, head of Mc-
Graw-Hill Cos. — were selling out Amer-
ica’s middle class. “They are attacking as ‘isola-
tionists’ those who want our trade policies
reformed and are demanding Congress continue
passing lobbyist-written trade policies that crush
ordinary Americans,” he wrote.
In the American Prospect, former Labor Secre-
tary Robert Reich described how America’s largest
corporations have “decoupled from the United
States.”
“Their overseas subsidiaries are booming even
as their American operations stagnate. General
Electric expects more than half its revenue this year
to come from outside the United States for the first
time. More than half of Boeing’s new orders are
from overseas. Ford is struggling in America but
doing well in Europe.
“In other words, the president’s supply-side tax
cuts are great for America’s global investors, who
have been investing their extra money around the
world — either in foreign companies or in global
American-based ones.”
GE Workers Say: ‘Screw
That (Made in China) Bulb’
How many U.S. workers does it take
to make a light bulb? If General Elec-
tric has its way, the answer is none.
GE, the company that was built on
Thomas Edison’s light bulbs, is putting
workers and consumers in a position of
having to choose whether they want to
save the environment or save U.S. jobs.
GE is promoting new, energy-sav-
ing bulbs known as compact fluores-
cents, or CFLs, which are made in
China. These bulbs last longer and use
less energy than the typical incandes-
cent bulbs found in most U.S. homes
— but they can cost up to 10 times as
much.
If GE has its way, it will no longer
manufacture light bulbs in the United
States. Since 1980, employment in GE
lighting plants in this country has
dropped by 68 percent. If everyone
switched to the Chinese-made CFL
bulbs, all U.S. plants would close.
Instead of letting GE make all the
profits and send jobs to China, GE’s
workers, who are represented by 13
unions, have launched a “Screw That
Bulb” campaign. They are mobilizing
to save the environment and their jobs.
Environmentally sustainable tech-
nology was supposed to stimulate our
economy, not lead to more jobs in
China, they say. But GE is refusing to
invest in the advanced technology
needed to produce the bulbs here so
U.S. workers can have a future.
You can take action and help save
U.S. jobs and the environment. Go to
www.ScrewThatBulb.org and sign the
petition asking GE to manufacture
green bulbs in U.S. plants. Workers and
consumers shouldn’t have to choose
between a green environment or a pink
slip for America’s workers.
MAY 18. 2007