Growth in the U.S. goods trade deficit with China between 2001 and 2013 eliminated or displaced 106,000 jobs in Ohio, according to China Trade, Outsourcing and Jobs, a new study from the Economic Policy Institute. It found that trade with China has caused job loss in all 50 states and the District of Columbia, including all but one congressional district.
[by Zach Schiller | December 11, 2014 | Policy Matters Ohio]
Ohio’s job losses were eighth largest in total, behind California, Texas, New York, Illinois, Pennsylvania, North Carolina and Florida. The jobs lost in Ohio equate to 2.04 percent of total state employment, ranking 24th among states.
The report estimates job losses by congressional district (Download table listing Ohio districts). Among Ohio’s 16 congressional districts, the 14th District in the northeastern corner of the state and the 7th District, which covers all or part of 10 counties mostly in North Central and Northeast Ohio, each lost at least 8,400 jobs over the time period, or 2.6 percent as a share of employment.
Almost three out of four jobs lost in Ohio were in manufacturing. “If our leaders are serious about supporting Ohio manufacturing, they must work to reduce our trade deficit and put an end to China’s job-killing trade practices and labor policies that harm workers,” said Zach Schiller, research director of Policy Matters Ohio, which released the report in Ohio.
Supporters of China’s entry into the World Trade Organization in 2001 claimed that the move would create jobs and increase U.S. exports to China. However, China has continued to engage in unfair trade practices — such as currency manipulation, illegal industry subsidies, barriers to imports, dumping, and the suppression of wages and labor rights—which have limited the growth of U.S. exports. Meanwhile, growth in outsourcing by multinational companies created a flood of Chinese imports into the United States, leading to rapidly growing trade deficits and corresponding job loss. U.S. trade deficits with China have nearly quadrupled since 2001, reaching $324.2 billion in 2013.
“Currency manipulation by China is the single biggest contributor to growing U.S. trade deficits and the resulting job loss,” said Robert E. Scott, director of trade and manufacturing policy research for the Economic Policy Institute. “It’s time for Congress and the president to enact tough new policies to end currency manipulation by China and more than a dozen other nations that have adopted similar policies. Congress should pass pending legislation that would allow the Commerce Department to penalize currency manipulators, and the president should use existing authority to tax or offset currency manipulation by foreign governments.” Scott authored the paper with research assistant Will Kimball.
The impact of the trade deficit with China is not limited to direct job losses. Competition with low-wage countries has driven down wages and reduced bargaining power for millions of workers throughout the U.S. economy.