Giant Sucking Sound Actually Coming From Asia
By Michelle Krebs July 31, 2008By Bill Visnic
It's official, at least as quantified by a reputable new study: all the good American jobs have gone to China.
A study released this week by the Economic Policy Institute links the ever-ballooning trade deficit with China as costing 2.3 million U.S. jobs from 2001 to 2007. China entered the World Trade Organization in 2001.
The findings of the EPI report are certain to resonate in a Detroit reeling from plunging auto sales and market share, not to mention the wider U.S. manufacturing sectors, almost all of which have been touched -- if not virtually decimated -- by the nation's outsized reliance on China-sourced manufactured goods.
"Contrary to the stereotype and to some economic theories which hold that jobs lost are predominantly in low-skill, low-pay industries, the trade deficit with China has in fact forced workers from better-paying jobs to lower-paying sectors," says one damning passage from the EPI study. "More than half [55.6 percent] of the displaced jobs were in the top half of American wage earners," it continues. And nearly a third of those losing jobs because of the trade deficit with China were workers with college degrees, said the EPI.
The study said the trade deficit cost the nation some 366,000 jobs last year, with the dollar amount of wage reduction for each displaced worker averaging $8,146.
In a published report, Leo Gerard, president of the United Steelworkers union, is quoted as saying of the study, "It helps to debunk the absolutely dishonest myth that these rotten trade deals are actually good for the economy."
And EPI senior economist Robert Scott, who composed the report, added, "This new data is a wake-up call about the devastating effect of our unbalanced China trade on American jobs, wages and our economy."
Scott summarized, "The major causes of the skyrocketing trade deficit with China are no mystery," said Scott. "China's manipulation of its currency makes the yuan artificially cheap, effectively subsidizing exports. Beijing's suppression of labor rights lowers wages. China subsidizes some key industries and maintains barriers to some imports.
"We must demand a fundamental change in exchange rate policies and labor standards in the Chinese economy as a critical first step toward restoring a level playing field where American workers can compete fairly," he concludes in a release from the EPI.
It likely is no accident the report's findings are released in a presidential election year, one in which the eroding American economy is increasingly emerging as a perhaps the single most overarching issue. Earlier this year, another longstanding trade accord -- the North American Free Trade Agreement -- became a central issue in the primary campaigns of both major parties, as many now are scrutinizing NAFTA as another chief cause of displaced American jobs in the manufacturing sector.
It was in criticism of the proposed NAFTA in 1992 when industry captain and one-time presidential hopeful and former General Motors board member Ross Perot said there would be a "giant sucking sound" of jobs leaving the U.S. for Mexico.
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