China Cheats, Pennsylvania Workers Lose
Posted by SCapozzola on March 25th, 200815,640 Pennsylvania jobs lost per year as a result of China’s illegal trade practices
WASHINGTON, DC, MARCH 25, 2008—A new analysis by the Alliance for American Manufacturing (AAM) found that the U.S. trade deficit with China has taken a surprising toll on Pennsylvania workers. Annual job losses in Pennsylvania due to trade with China average three times higher than losses discussed by some of the presidential candidates and attributed to NAFTA.
“In just a few short years, tens of thousands of Pennsylvania jobs have been shipped to China,” said AAM Director Scott Paul. “The presidential candidates are rightly concerned about the potentially damaging effects of unfair trade and they need to focus more attention on our record trade deficits with China, which have cost us more than 1.8 million jobs since 2001. Vigorous enforcement of our trade laws will ensure American workers and companies have the chance to compete in a fair global market. We call on the presidential candidates to make this commitment to the voters of Pennsylvania.”
AAM’s analysis of Economic Policy Institute data found that Pennsylvania lost 78,200 jobs from 2001-2006 (all sectors) as a result of the U.S. trade deficit with China [source: EPI, ‘Costly Trade with China’]. That works out to an average of 15,640 lost jobs per year. Using an identical analysis, AAM found that Pennsylvania lost 44,173 jobs from 1993-2004 (all sectors) as a result of NAFTA, for an average of 4,016 jobs lost per year [source: EPI, ‘Revisiting NAFTA’].
PENNSYLVANIA JOB LOSS
Due to CHINA 78,200 2001-2006
Due to NAFTA 44,173 1993-2004
“China cheats and Pennsylvania loses,” said Paul, noting that the U.S. racked up record annual trade deficits in 2007 with both China ($256 billion) and its NAFTA partners ($138 billion). “If the presidential candidates want to save Pennsylvania jobs, they should commit to fighting China’s illegal trade practices such as dumping, subsidies, and currency manipulation.”
AAM advocates strong enforcement of existing U.S. trade law in order to address predatory foreign practices like China’s dumping, subsidies, and illegal currency manipulation. An AAM study in 2007 found that when U.S. trade laws are actually enforced, the net contribution to the U.S. economy is 50 times greater than any consumer benefits derived from dumped or subsidized imports [source: ‘Enforcing the Rules’].
A state-by-state breakout of U.S. jobs lost to China is available here.
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March 25th, 2008 at 10:46 pm
Seems the grim news never ends and yet, the President and his merry men refuse to admit there are real economic issues caused by their policies. They continue to ignore business and the working class citizen. There is no logical explanation for the President’s statement about the economy being “fundamentally strong”. It is just more political babble and doubletalk.
Have been in business for 35 years as service / support for U.S. manufacturers that use CNC equipment I mistakenly thought I had a secure customer base and mix of customers. I also felt that these companies were large enough and would not fail however I was sadly mistaken. The U.S.A. has lost a substantial number of major manufacturers and the general feedback from what is left is that the good ship U.S.A. should be renamed TITANIC as it is sinking fast and there are NO LIFEBOATS.
These facts indicate a deep Recession, or worse, a Depression is on the horizon.
Your statistics along with that of USBIC, Lou Dobbs, and a number of others continue to be ignored by this administration. They continue to push the FREE TRADE agenda as a good thing for the country. Seems its a good thing for only a few top ranking ELITE. Giving away our manufacturing technology and defense secrets surely will come back to kill many americans. Obviously our Political Elite ONLY CARE about themselves.
The auction notices I receive daily from once vibrant U.S. based companies are on a magnatude not seen since the Great Depression. With each business closure our country loses badly needed jobs, more tax dollars, and our dependence and debt grows. Yet George Bush and all of his cronies in Washington push for more FREE TRADE.
Another irritation is his statement that “Americans need to be retrained”. The big question is WHAT we will retrain for?
If the outsource trend continues much longer the starving middle class masses will revolt and our 545 so called representatives will hang from the trees like Christmas ornaments. This may sound extreme however history is filled with revolts caused by desperate times. It appears we are on that path. God Help America….
March 27th, 2008 at 3:36 pm
Actually, there’s nothing surprising about these job losses at all. When expressed in per capita terms (divided by the population of China), our trade deficit in manufactured goods with China is rather unremarkable. In 2006, our per capita trade deficit with eighteen other countries was worse, including nations such as Japan, Germany, Mexico, Korea and others. In fact, our worst per capita trade deficit in manufactured goods was with Ireland - it was 25 times worse than our deficit with China.
I’m not saying that our deficit with China isn’t a huge problem. It is. My point is that our trade policy was already a proven failure around the world. What did we expect when we suddenly applied it to a nation with one sixth of the world’s population? China gets all of the attention because of its sheer magnitude, but the same thing is happening with many other over-crowded nations.
It’s time to recognize that Ricardo’s principle of comparative advantage, dating back to 1815, the theory upon which free trade is based, is fatally flawed. It is flawed because it does not factor in the role of population density and what happens when two nations, grossly disparate in density, attempt to trade freely. While free trade in natural resources and free trade in manufactured goods between nations of roughly equal population density is indeed beneficial, just as Ricardo predicts, it is a sure-fire loser when attempting to trade freely in manufactured goods with nations that are much more densely populated than our own, tantamount to economic suicide. Our economies combine. The work of manufacturing is spread evenly across the combined labor force. But, while the more densely populated nation gets free access to our healthy market, all we get in return is access to a market emaciated by over-crowding and low per capita consumption (if we get access at all).
Decades of trade experience have proven that we can try to enforce trade deals, improve quality and cut costs until we’re blue in the face. It hasn’t made one iota of difference in our trade equation because none of these change this popuation density relationship. Only a tariff structure on manufactured goods that is indexed to the population density of our trading partners can offer any hope of restoring a trade balance.
Pete Murphy
Author, Five Short Blasts
March 27th, 2008 at 6:05 pm
I had the opportunity to go see Bill Clinton speak recently at East High School in Erie, Pa. While I whole heartedly admit I’m not a big Clinton fan, although albeit try to keep political alliances aside, I was shocked to not hear anything about Hillary’s plan to increase manufacturing in NorthWest PA & the United States.
While I realize, former President Clinton was at a high school, & therefore tended to reflect about education, No Child Left Behind, etc. He did make several references to other key “campaign battles” (The War in Iraq, economy).
The above article clearly shows what Pennsylvania residents are grappling with at they choose there next leader on April 22nd. Jobs moving to China, Mexico & off of US soil. Something needs to be done, before a one proud manufacturing state turns into a series of rusty, dilapidated ghost towns.
May 16th, 2008 at 10:50 pm
Small Cnc Milling Machine…
I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you….