That's right. 2.4 million jobs lost in 8 years can be directed attributed to China.
Since China joined the World Trade Organization (WTO) in 2001, 2.4 million jobs have been lost or displaced in the United States as a result of the burgeoning trade deficit with that nation
Dr. Robert Scott, International Economist for the Economic Policy Institute, has a new paper, Unfair China Trade Costs Local Jobs and it's well researched, damning. The AAM has published the report in an easy scrolling presentation on the AAM website.
The research paper's bullet points are reprinted below:
- The 2.4 million jobs lost/workers displaced nationwide since 2001 are distributed among all 50 states, the District of Columbia, and Puerto Rico, with the biggest losers, in numeric terms: California (370,000 jobs), Texas (193,700), New York (140,500), Illinois (105,500), Florida (101,600), Pennsylvania (95,700), North Carolina (95,100), Ohio (91,800), Georgia (78,100), and Massachusetts (72,800).
- The hardest-hit states, as a share of total state employment, are New Hampshire (16,300, 2.35%), North Carolina (95,100, 2.30%), Massachusetts (72,800, 2.25%), California (370,000, 2.23%), Oregon (38,600, 2.19%), Minnesota (58,800, 2.17%), Rhode Island (10,600, 2.01%), Alabama (39,300, 1.97%), Idaho (13,500, 1.97%), and South Carolina (38,400, 1.97%).
- Rapidly growing imports of computer and electronic parts (including computers, parts, semiconductors, and audio-video equipment) accounted for more than 40% of the $186 billion increase in the U.S. trade deficit with China between 2001 and 2008. The $73 billion deficit in advanced technology products with China in 2008 was responsible for 27% of the total U.S.-China trade deficit. The growth of this deficit contributed to the elimination of 627,700 U.S. jobs in computer and electronic products in this period. Other hard-hit industrial sectors include apparel and accessories (150,200 jobs), miscellaneous manufactured goods (136,900), and fabricated metal products (108,700); several service sectors were also hard hit by indirect job losses, including administrative support services (153,300) and professional, scientific, and technical services (139,000).
- The hardest-hit Congressional districts had large numbers of workers displaced by manufacturing trade, especially in computer and electronic parts, apparel, and durable goods manufacturing. The three hardest hit Congressional districts were all located in Silicon Valley in California, including the 15th (Santa Clara county, 26,900 jobs, 8.3% of all jobs in the district), the 14th (Palo Alto and nearby cities, 20,300 jobs, 6.3%), and the 16th (San Jose and other parts of Santa Clara county, 18,200 jobs, 6.0%).
- The hardest hit Congressional districts were concentrated in states that were heavily exposed to growing China trade deficits in computer and electronic products and other industries such as furniture, textiles, and apparel. Of the top 20 hardest hit districts (see Table 5, below), eight were in California (in rank order, the 15th, 14th, 16th, 13th, 31st, 34th, 50th, and 47th), four were in North Carolina (10th, 6th, 4th and 5th), three were in Texas (31st, 10th and 3rd), two were in Massachusetts (5th and 3rd), and one each in Oregon (1st), Georgia (9th), and Alabama (5th). Each of these districts lost more than 8,600 jobs (2.8% of total jobs in the district).
What is astounding in this report are the areas with the number one job losses from trade with China, the heart of those jobs of tomorrow we heard touted by politicians, is Silicon valley. Get that? It's not just India stealing the U.S. tech sector, it's China.
Growing trade deficits cost jobs in every state and congressional district (CD), the report found, including the District of Columbia and Puerto Rico. The computer, electronic equipment and parts industries experienced the largest growth in trade deficits with China, resulting in 628,000 job losses—26 percent of all jobs displaced by trade between 2001 and 2008.
26% of all trade job losses are high tech/high tech manufacturing jobs! While global trade did collapse this recession, note the China PNTR (trade treaty) wasn't even signed until 2000, kicked in about 2002 and this study does not even cover this recession data.
The Alliance for American Manufacturing has created a data map, where you can drill down into China trade loss data by Congressional district.
A bi-partisan coalition of Senators, spearheaded by Chuck Schumer and Lindsey Graham, have introduced a new bill, S.3134: The Currency Exchange Rate Oversight Reform Act of 2010. The bill is to legislatively get some real action on the grossly undervalued Chinese currency, which gives China an unfair trade advantage.
Legislation is critical for as one can see, the United States is hemorrhaging jobs and for any other body to act, well, it might be too late for the U.S. worker.
Scott, in his study, reports currency misalignment (a better political term to avoid motivations as to why the RMB is so undervalued), is a major reason we have lost 2.4 million jobs:
A major cause of the rapidly growing U.S. trade deficit with China is currency manipulation. Unlike other currencies, the Chinese yuan does not fluctuate freely against the dollar. While the value of its currency should have increased as China exported more and more goods, it has instead remained artificially low, and China has aggressively acquired dollars to further depress the value of its own currency. China has tightly pegged its currency to the U.S. dollar at a rate that encourages a large bilateral surplus with the United States. China had to purchase $453 billion in U.S. treasury bills and other securities between December 2008 and December 2009, alone, to maintain this peg.1 China has acquired a total of $2.4 trillion in foreign exchange reserves as of December 2009 (Chinability 2010). About 70% of these reserves are held in U.S. dollars. This intervention makes the yuan artificially cheap relative to the dollar, effectively subsidizing Chinese exports. The best estimates place this effective subsidy at roughly 40% of the U.S. dollar, even after recent appreciation in the yuan (Cline and Williamson 2010).2 Currency intervention also artificially raises the cost of U.S. exports to China by a similar amount, making U.S. goods less competitive in that country.
It appears finally confronting China on it's grossly undervalued pegged currency actually has a chance of passing in Congress. If one notices on the co-sponsor list, one sees this action item is endorsed by all flavors of the political spectrum.
The Manufacture This blog is putting up all sorts of goodies related to this report and bill. I'll embed an CNBC interview with AAM Executive Directory Scott Paul (sorry it's CNBC, but hey).