2.4 millions jobs lost to China, according to report

[c1ue]

I don't agree with the conclusion which Mr. Oak arrives at, but the data is still very interesting...

http://www.economicpopulist.org/cont...hina-2001-2008

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.

Click on Map to Go to Website and Interactive Map

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.

[cmalbatros]

Re: 2.4 millions jobs lost to China, according to report

This was predicted well before, watch this - http://www.youtube.com/watch?v=4PQrz8F0dBI&feature=PlayList&p=D255EEFDD0D9F07E&index=0

The old saying - "Give a man a fish, you feed him for a day. Teach him to fish & he'll end up stealing all your fish" , holds true for tech stuff, manufacturing etc.

[Rajiv]

Re: 2.4 millions jobs lost to China, according to report

IMO, this has nothing to do with teaching a man how to fish. But much more, these are artifacts brought about by exchange rates that are determined purely by international trade and the printing press!

These problems would not have occurred had the gold standard in international trade not broken down. The gold and silver standard (yes! there was a silver standard until 1964) along with declining oil reserves were proving to be an impediment to the US ability to wage the Vietnam war. Therefore, first the silver standard went in 1964, and then the US default on its gold obligations in 1972 (the standard had already been decimated by the US printing presses -- this was only an acknowledgement and formalization of that fact!)

[bcassill]

Re: 2.4 millions jobs lost to China, according to report

No, this is just the free market working! These workers were overpaid. They should quit whining and get a job at Walmart! NMP (not my problem).:rolleyes:

I just wonder when the conservative end of the spectrum will wake up to the fact that this is just another raping of the middle class and a huge transfer of wealth to the bondholders via wage destruction. But, wait a minute, things must be picking up. Last year was a bust out bonus year for Wall Street!

[ThePythonicCow]

Re: 2.4 millions jobs lost to China, according to report

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.

I would not blame the Chinese for that. Other countries (and other areas of the United States) were "stealing" manufacturing jobs from Silicon Valley long before China's latest boom.

It was not just (bcassill) that the manufacturing workers in Silicon Valley were "overpaid" The entire cost of doing business in Silicon Valley was way too expensive to support much serious manufacturing, except a bit of final assembly or a few bleeding edge plants that benefited from being close to the development engineers.

I was there throughout the last twenty years. My employer moved manufacturing to other parts of the United States and around the Pacific basin during that period, to reduce expenses. The manufacturing floors which I could walk to, where I could talk to those assembling the stuff I had helped design, were long gone by the time I retired.

California leads the nation, as usual :eek:.

[bcassill]

Re: 2.4 millions jobs lost to China, according to report

I would not blame the Chinese for that. Other countries (and other areas of the United States) were "stealing" manufacturing jobs from Silicon Valley long before China's latest boom.

It was not just (bcassill) that the manufacturing workers in Silicon Valley were "overpaid" The entire cost of doing business in Silicon Valley was way too expensive to support much serious manufacturing, except a bit of final assembly or a few bleeding edge plants that benefited from being close to the development engineers.

I was there throughout the last twenty years. My employer moved manufacturing to other parts of the United States and around the Pacific basin during that period, to reduce expenses. The manufacturing floors which I could walk to, where I could talk to those assembling the stuff I had helped design, were long gone by the time I retired.

California leads the nation, as usual :eek:.

I was injecting a little sarcasm about the whole overpaid part. The problem is that our whole trade policy has been out of whack with the rest of the world. But it makes a lot of sense if you are a large multi-national corporation for whom it seems the nation's borders have all but disappeared. My fear (and the reality is likely to be) is that those pesky national borders will come back with a vengeance as the nations that still have functioning governments start to fight over the scraps of what remains of the world's resources.

[ThePythonicCow]

Re: 2.4 millions jobs lost to China, according to report

My fear (and the reality is likely to be) is that those pesky national borders will come back with a vengeance as the nations that still have functioning governments start to fight over the scraps of what remains of the world's resources.

Oh yes, I agree.

Just as happened a century ago at the previous peak of international trade, affairs will devolve into protectionism and (likely) war.

Now might be a good time to get in the business of retro-fitting tankers and container ships for military use.

[touchring]

Re: 2.4 millions jobs lost to China, according to report

I was there throughout the last twenty years. My employer moved manufacturing to other parts of the United States and around the Pacific basin during that period, to reduce expenses. The manufacturing floors which I could walk to, where I could talk to those assembling the stuff I had helped design, were long gone by the time I retired.

California leads the nation, as usual :eek:.

Pacific basin, you are talking about Japan, Korea, Taiwan, Hong Kong, Singapore and probably also Malaysia? These countries have got about 240 million people.

High income Western Europe and the USA has about 600 million people. It is perfectly possible for 600 million people to outsource to 240 million people.

Now, China has got 1.4 billion people, India 1.2 billion, a total of 2.6 billion people. It is numerically impossible for 650 million people to outsource to 2.6 billion people. Resource wise it is also not possible as there aren't enough natural resources to support even another 1 billion people living the American way of life.

So the correct word should be replacement rather than outsourcing. Jobs will be transferred to China and India. American and European living standards fall, while living standards in India and China rise.

[marvenger]

Re: 2.4 millions jobs lost to China, according to report

I just posted a thread in education and resources asking what people thought of one of the main 'insights' in Karl Polanyi's work. Polanyi basically was trying tounderstand why the hell the world disintergrated in the first half of the 20th century and he basically said what you are saying. However, he says these episodes are inevitable in free markets because societies and human relations cannot tolerate the uncertainty of free markets and there is an inevitable rise in protectionism but this then interfers with the self regulating material reproduction of social life futher adding to the problems and therefore the whole situation is pretty much unworkable.

[ThePythonicCow]

Re: 2.4 millions jobs lost to China, according to report

Pacific basin, you are talking about Japan, Korea, Taiwan, Hong Kong, Singapore and probably also Malaysia? These countries have got about 240 million people.

I was including China as well in my thinking (and would have added India if I'd thought of it.)

You might be drawing a distinction between outsourcing and replacement which I did not intend to draw.

I don't expect those jobs back, at least not until and unless Americans are willing and able to perform comparable work for comparable wages, or until a wave of protectionism scales back the forces of globalization dramatically.

I see no quick or easy path from here to any place that most Americans would recognize or desire.

[touchring]

Re: 2.4 millions jobs lost to China, according to report

I don't expect those jobs back, at least not until and unless Americans are willing and able to perform comparable work for comparable wages, or until a wave of protectionism scales back the forces of globalization dramatically.

I think it is more than just wages.

Many Pacific basin economies are designed to subsidize production. Tax free period for first few years, free land if you build a hi-tech factory (in some cases maybe even the building is free), subsidized utilities for factories, free college educated labor (i'm not joking), zero or very low income tax for top executives for the first few years.

Since local governments can't tax so how do they finance the subsidies? Subsidies are often financed by government land sales, hence the real estate bubble. With high real estate prices, and mortgage taking 60%-70% of net income, there is little disposable income left so the bulk of products manufactured will have to be exported - the vicious cycle continues.