nakedcapitalism | A newly released study by the Economic Policy Institute reaches a
devastating but not surprising conclusion: globalization has screwed
American workers. However, putting numbers on how much sustained trade
deficits with China translate into lost American jobs, and those numbers
turning out to be large, gives free trade cheerleaders a lot less
wriggle room.
EPI estimates that American sacrificed 3.7 million jobs as a result
of US-China trade deficits since China joined the WTO in 2001, with 3/4
of the losses taking place in manufacturing positions. They also point
out that job losses to China have increased since Trump took office.
The EPI estimates are consistent with earlier studies. From a 2017 Wall Street Journal article, How the China Shock, Deep and Swift, Spurred the Rise of Trump:
What happened with Chinese imports is an example of how much of the conventional wisdom about economics that held sway in the late 1990s, including the role of trade, technology and central banking, has since slowly unraveled….
Both presidential candidates aimed much of their criticism at 1994’s North American Free Trade Agreement, which boosted imports from Mexico. Even then, though, the real culprit was China, economists now say.
Many U.S. factories that moved to Mexico did so to match prices from China. Some of the new Mexican factories helped support U.S. jobs. For example, fabrics made in the U.S. are turned into clothing in Mexico for sale globally by U.S. companies….
A group of economists that includes Messrs. Hanson and Autor estimates that Chinese competition was responsible for 2.4 million jobs lost in the U.S. between 1999 and 2011. Total U.S. employment rose 2.1 million to 132.9 million in the same period.
Recall that the much-touted NAFTA was supposed to deliver one million
American jobs, but instead resulted in job destruction, with studies
estimating anywhere from nearly 800,000 jobs to over a million.
U.S. jobs lost are spread throughout the country but are
concentrated in manufacturing, including in industries in which the
United States has traditionally held a competitive advantage.
