2.8 Million Jobs Lost to China

Posted by Brianna Panzica - Friday, September 30th, 2011

The heavy job loss and unemployment rates in the U.S. have long been blamed on the recession and the nation’s domestic problems.

But a recent report released by the Economic Policy Institute shows that this may not be entirely the case.

According to the report, trade deficit with China has actually caused the evaporation or displacement of a total of 2.8 million jobs over the last ten years.

As trade with China rose, so did the increase in cheaply manufactured goods, something that led to a hike in imports from China and increased consumer spending on Chinese-made goods.

It really started, the report states, in 2001, when China entered into the World Trade Organization.

“Proponents of China’s entry into the WTO frequently claimed that it would create jobs in the United States, increase U.S. exports, and improve the trade deficit with China[…]However, as a result of China’s currency manipulation and other trade distorting practices[...]the envisioned flow of U.S. exports to China did not occur.”

When China entered the WTO in 2001, the report says, trade deficit was $84 billion. In 2010, it had risen to $278 billion.

The sector hit the hardest was the manufacturing sector, where 1.9 million of the 2.8 million jobs were lost.

Chinese manufacturing workers make significantly less than American workers, which allows for the goods to be produced and sold cheaply.

Within the manufacturing sector, 909,400 jobs were from the computer and electronic parts industry, or 32.6% of the total jobs lost.

And though all states were affected, some felt the blow more than others. Below are the top 10 states affected and the net job loss over the 10-year period:

• California – 454,600
• Texas – 232,800
• New York – 161,400
• Illinois – 118,200
• Florida – 114,400
• North Carolina – 107,800
• Pennsylvania – 106,900
• Ohio – 103,500
• Massachusetts – 88,600
• Georgia – 87,700

According to the report, around 1/3 of the people who lost manufacturing jobs have not found new jobs, and those who did saw an average wage cut of 10% or more.