9 Things You Didn’t Know About Our Trade Deficit with China

Photo courtesy bitzcelt

In 2001, China joined the World Trade Organization (WTO). America’s workers have felt the consequences ever since.

A new report from the Economic Policy Institute examines the primary result in the United States of China’s entry into the WTO, a massive increase in the trade deficit between the two countries, favoring China. The report’s author, Robert E. Scott, concludes that the trade deficit with China drives down wages and benefits in the United States and eliminates good jobs for U.S. workers.

Here are nine facts from the study you might not know about.

1. The increasing U.S. trade deficit with China over the past decade has eliminated 2.7 million jobs in the United States, the vast majority of them in the manufacturing sector.

2. Workers displaced by trade with China lost $37 billion in wages in 2011. And, until the expansion of the Trade Adjustment Assistance program in 2009, workers who lost their jobs due to trade with China weren’t even eligible to receive the additional training eligible to trade-affected workers to help minimize the disruption to their lives and incomes.

3. Manufacturing jobs pay 16% higher wages than jobs that don’t involve trade. The United States isn’t just losing jobs to China, it’s losing good-paying jobs, and as we lose manufacturing jobs to China, average wages in the United States fall.

4. The percentage of manufacturing jobs that offer health care to their employees is 15.5% higher than nontrade-related jobs. The jobs lost to China also are more likely than other jobs to provide good benefits, so fewer workers overall can rely on employer-provided health insurance.

5. People of color made up 35% of the displaced workers, to the tune of $10.1 billion in lost wages per year.

6. The jobs lost by people of color because of trade with China paid, on average, 25.5% more than the jobs those workers were otherwise able to find.

7. More than 1 million of the displaced jobs were good jobs in the computer and electronics industries.

8. Because we mostly export low-wage products to China (like agricultural products), workers in jobs supported by exports to China make, on average, 17% less than workers who lost their jobs due to the U.S. trade deficit with China.

9. The trade gap with China accounts for one-third of the increase of income inequality in the United States since 1979.

Scott concludes:

The U.S.-China trade relationship must be fundamentally changed. Addressing the exchange rate policies and labor standards issues in the Chinese economy are important first steps. It is time for the administration to respond to the growing chorus of calls from economists, workers, businesses and Congress and take action to stop illegal currency manipulation and labor rights violations by China.

Read the full report for more details.

Kenneth Quinnell writes for the AFL-CIO Now blog where this post first appeared.

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One Response

  1. […] 9 Things You Didn’t Know About Our Trade Deficit with China (talkingunion.wordpress.com) […]

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