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US job losses have more than doubled since China joined the WTO

WASHINGTON, DC - 01/12/05 - A new study has found that the country's growing trade deficit with China has had an increasingly negative impact on the US economy, causing job losses that affect every state and reach into the most technologically advanced industries in the manufacturing sector.

The study - "US-China Trade, 1989-2003: Impact on Jobs and Industries, Nationally and State-by-State" - was commissioned by the US-China Economic and Security Review Commission (USCC) and prepared by Dr. Robert Scott of the Economic Policy Institute (EPI).

Using a methodology that determines the number of jobs needed to produce exports and imports, the EPI study found that 1.5 million jobs were lost to lower-wage Chinese competition in the 14-year period between 1989 and 2003. 

During that time, the report said, the US trade deficit with China rose twenty-fold, from $6.2 billion to $124 billion.  It is expected to increase another 20% in 2004, to $150 billion.

The US trade deficit in Advanced Technology Products (ATP) with China is now $32 billion, an amount equal to the total US ATP deficit, it added.
 
The report also noted that the pace of job loss has more than doubled since China entered the World Trade Organization (WTO) in 2001, and that China's exports to the US of sophisticated electronics and communications equipment requiring skilled labor are growing much more quickly than its exports of low-value, labor-intensive products.

China's exports to the US of electronics, computers, and communications equipment, along with other products that use more highly skilled labor and advanced technologies, it said, "are growing much faster than its exports of low-value, labor-intensive items such as apparel, shoes and plastic products," and that China is also "rapidly gaining advantage in more advanced industries" such as autos and aerospace products.
 
"The assumptions we built our trade relationship with China on have proven to be a house of cards," said Scott. "Everyone knew we would lose jobs in labor-intensive industries like textiles and apparel, but we thought we could hold our own in the capital-intensive, high-tech arena."

The report's conclusions, he said, "put the lie to that hope."
 
Scott's research found that the 1.5 million lost job opportunities over the course of 14 years were distributed throughout all 50 states and the District of Columbia, with employment losses of roughly 1.5% to 2.5% in the hardest-hit states.

The 1.5 million job opportunities lost nationwide are distributed among all 50 states and the District of Columbia.

California took the heaviest hit, losing 211,045 jobs - or some 1.46% of the state's total workforce - during the period covered by the report, followed by Texas (106,262); New York (87,037); Illinois (74,070); Pennsylvania (73,612); Florida (65,733); North Carolina (65,279); Ohio (61,914); Michigan (54,313); and Georgia (49,589).

The Economic Policy Institute is a non-profit, non-governmental research organization based in Washington, DC that focuses on the economic conditions of lower and middle-income American workers.

The US-China Economic and Security Review Commission was created in 2000 to monitor, investigate, and submit an annual report on the national security implications of the bilateral trade and economic relationship between the US and the People's Republic of China to Congress, and to provide recommendations, where appropriate, for legislative and administrative action.

The full EPI report can be downloaded from the USCC website at www.uscc.gov/

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