The US-China trade deficit costs the U.S. 3.4 million jobs

The growing trade deficit with China has cost the U.S. 3.4 million jobs since 2001, according to a new port by Economic Policy Institute (EPI)’s Robert Scott and Zane Mokhiber. Job losses have occurred throughout the country and in every industry, but 2.5 million jobs—nearly three-fourths of the total jobs lost—were in manufacturing.

Trade with China and other low-wage countries also lowers wages by about $2,000 per year for the roughly 100 million workers in the United States who do not have a college degree.  The growth of the U.S. trade deficit with China, which has increased by more than $100 billion since the beginning of the Great Recession, almost entirely explains why manufacturing employment has not fully recovered along with the rest of the economy.

And the growing trade deficit with China isn’t just a post-recession phenomenon hitting manufacturing: it has cost the U.S. millions of jobs throughout the economy since China entered the World Trade Organization (WTO) in 2001, a finding validated by numerous studies.

This report underscores the ongoing trade and jobs crisis by updating EPI’s research series on the jobs impact of the U.S.–China trade deficit. The most recent of these reports (Scott 2012; Kimball and Scott 2014; Scott 2017a) look at the effect of the U.S. trade deficit with China since China entered the WTO in 2001. It’s model examines the job impacts of trade by subtracting the job opportunities lost to imports from those gained through exports.

As with it’s previous analyses, EPI find that because imports from China have soared while exports to China have increased much less, the United States is both losing jobs in manufacturing (in electronics and high tech, apparel, textiles, and a range of heavier durable goods industries) and missing opportunities to add jobs in manufacturing (in exporting industries such as transportation equipment, agricultural products, computer and electronic parts, chemicals, machinery, and food and beverages).

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. The growth of the U.S. trade deficit with China between 2001 and 2017 was responsible for the loss of 3.4 million U.S. jobs, including 1.3 million jobs lost since 2008 (the first full year of the Great Recession, which technically began at the end of 2007). Nearly three-fourths (74.4 percent) of the jobs lost between 2001 and 2017 were in manufacturing (2.5 million manufacturing jobs lost).

 

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