China’s Currency Manipulation “Sucks Wages Out Of Our Economy”
China’s currency manipulation and other illegal practices “suck wages out of our economy,” Rep. Tim Ryan (D-Ohio) said during a press call Thursday, citing the figure of a direct loss of $37 billion in reduced wages in 2011 alone.
It “becomes difficult to do economic development at a local level when our country’s trade policies put us at severe disadvantage and suck wages out of our communities,” Ryan said during the release of a new report from the Economic Policy Institute (EPI), titled “China Trade, Outsourcing and Jobs.”
EPI’s Rob Scott, who co-authored the report with Will Kimball, explained on the call that between 2001 and 2013 the massive growth of our country’s trade deficit with China has cost us 3.2 million U.S. jobs, 2.4 million (three-fourths) of which were in manufacturing. This trade deficit with China accounted for two-thirds of all manufacturing jobs lost in this period. We had 600,000 jobs gained from exports to China and 3.8 million lost to imports.
When we opened the door to this China trade deal, it was claimed that exports to China would increase. They did, but growing imports have increased 2.5 times as much as imports.
“If policymakers are serious about manufacturing jobs they must put an end to China’s unfair trade practices,” Scott said.
Currency manipulation, illegal subsidies, product dumping and suppression of wages and labor rights as some of the things Scott cited that China does to gain an unfair advantage in our trade relationship. This has resulted in massive growth of outsourcing by multinational corporations and a massive increase in imports here. Our trade deficit with China has quadrupled since 2001 and “currency manipulation is the single biggest contributor to that,” he said.
Speaking next, Ryan discussed how our trade policies are unfair, costing us 3.2 million U.S. jobs shipped to China. Ohio lost 106,000 jobs to this, he said. “This is inexcusable because we understand China has been ramping up competitiveness, and this report shows the major impact China and others have to drive down wages here in the U.S. We have suffered a direct loss of $37 billion in reduced wages in 2011 alone.
It becomes difficult to do economic development at a local level when our country’s trade policies put us at severe disadvantage and suck wages out of our communities. China’s productivity has soared and their currency should have adjusted but instead their currency remained low. We need to level the playing field.”
From the report:
● Most of the jobs lost or displaced by trade with China between 2001 and 2013 were in manufacturing industries (2.4 million jobs, or 75.7 percent).
● Within manufacturing, rapidly growing imports of computer and electronic parts (including computers, parts, semiconductors, and audio and video equipment) accounted for 56.0 percent of the $240.1 billion increase in the U.S. goods trade deficit with China between 2001 and 2013. …
● Global trade in advanced technology products—often discussed as a source of comparative advantage for the United States—is instead dominated by China. … In 2013, the United States had a $116.9 billion deficit in advanced technology products with China, and this deficit was responsible for 36.0 percent of the total U.S.-China goods trade deficit. In contrast, the United States had a $35.6 billion surplus in advanced technology products with the rest of the world in 2013.
● Other industrial sectors hit hard by the growing trade deficit with China between 2001 and 2013 include apparel (203,900 jobs); textile mills and textile product mills (106,800); fabricated metal products (141,200); electrical equipment, appliances, and components (96,700); furniture and related products (94,700); plastics and rubber products (72,800); motor vehicles and parts (34,800); and miscellaneous manufactured goods (107,600). Several service sectors were also hit hard, by indirect job losses, including administrative and support and waste management and remediation services (196,900) and professional, scientific, and technical services (169,900).
● The 3.2 million U.S. jobs lost or displaced by the goods trade deficit with China between 2001 and 2013 were distributed among all 50 states and the District of Columbia…
● In percentage terms, the jobs lost or displaced due to the growing goods trade deficit with China in the 10 hardest-hit states ranged from 2.44 percent to 3.67 percent of the total state employment…
For details on these points and much more, click through to the report.
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This has been reposted from the Campaign for America's Future.
