How does trade with China affect employment in the U.S.?
Kenneth Rapoza at Forbes is asking a tough question-- namely, has China single handedly destroyed the U.S. job market?
Rapoza says that despite a slowing U.S. economy, the trade deficit with China grew to $26.6 billion in June 2011, the highest monthly trade deficit with China registered this year. Year-to-date, the U.S. trade deficit with China is $133.4 billion. Rapoza observes that the "more America buys from China, the less it is buying from similar goods manufacturers in the U.S."
On the question of whether China is displacing U.S. jobs, Rapoza quotes Scott Paul, executive director at the Alliance for American Manufacturers (AAM):
"No question about it. A lot the job losses have come from innovative states like Massachusetts, North Carolina, Texas and California, where they do all the innovating, but China does all the manufacturing for them. The problem with that model is that manufacturing and production is where the middle class jobs are. China has had a huge impact on the U.S. economy."
Rapoza also cites an Economic Policy Institute (EPI) study that estimates "at least 2.4 million manufacturing jobs were lost between 2001 and 2008 because of China taking over the production of manufactured goods. That number represent 66.9% of all jobs displaced in that seven year period."
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