Post by unlawflcombatnt on Jun 27, 2007 20:17:39 GMT -6
Below are excerpts from a June 26, 2007 article from the Economic Policy Institute describing how Wal-Mart has cost Americans a huge mumber of jobs, due largely to Wal-Mart's reliance on cheap-labor produced goods from China. The title of the article is The Wal-Mart effect
by Robert E. Scott
"China’s entry into the World Trade Organization (WTO) was supposed to improve the U.S. trade deficit with China and create good jobs in the United States. But those promises have gone unfulfilled: the total U.S. trade deficit with China reached $235 billion in 2006. Between 2001 and 2006, this growing deficit eliminated 1.8 million U.S. jobs (Scott 2007). The world’s biggest retailer, U.S.-based Wal-Mart was responsible for $27 billion in U.S. imports from China in 2006 and 11% of the growth of the total U.S. trade deficit with China between 2001 and 2006. Wal-Mart’s trade deficit with China alone eliminated nearly 200,000 U.S. jobs in this period....
China has achieved its rapidly growing trade surpluses by purchasing more than $1 trillion in U.S. Treasury bills and other government securities over the past few years in order to artificially and illegally reduce the value of its currency and thereby lower the cost of its exports to the United States and other countries. It has also repressed the labor rights of its workers and suppressed their wages, making its products artificially cheap and further subsidizing its exports. Wal-Mart has aided China’s abuse of labor rights and its violations of internally recognized norms of fair trade behavior by providing a vast and growing conduit for the distribution of artificially cheap and subsidized Chinese exports to the United States....
Exports support jobs in the United States, and imports displace them. However, an increase in exports will not support the creation of new jobs if, for example, a domestic firm exports parts that used to be shipped to a domestic auto assembly plant, and those products are used to build cars that are then sent back to the United States.1 Thus, the net effect of trade flows on employment must be based on an analysis of the trade balance....
U.S. exports to China in 2001 supported 189,000 jobs, but U.S. imports displaced production that would have supported 1,190,000 jobs, as shown in the bottom half of Table 1. Therefore, the $84.1 billion trade deficit in 2001 displaced 1 million jobs in that year. Job displacement rose to 2,763,000 in 2006. Growth in trade deficits with China has reduced demand for goods produced in every region of the United States and has led to job displacement in all 50 states and the District of Columbia....
Wal-Mart’s role
Wal-Mart accounted for approximately 9.3% of total U.S. imports from China between 2001 and 2006. This estimate is based on widely reported statistics, including Wal-Mart’s own estimates of its imports from China.5 U.S. imports from China increased $185 billion between 2001 and 2006, as shown in the top half of Table 1, an increase of 181%. Wal-Mart’s share of U.S. imports from China was stable in this period. Its imports increased from $9.5 billion in 2001 to $26.7 billion in 2006, an increase of $17.2 billion (181%)....
The Wal-Mart trade deficit displaced 111,400 jobs in 2001 and 308,100 jobs in 2006. Thus, Wal-Mart was responsible for displacing at least 196,700 U.S. jobs in this period alone, as shown in the bottom half of Table 1 and in Figure A.....Wal-Mart was responsible....for 11.2% of the U.S. job losses due to growing trade deficits with China (Table 1)....
Workers displaced by trade from the manufacturing sector have been shown to have particular difficulty in securing comparable employment elsewhere in the economy. More than one-third of workers displaced from manufacturing dropped out of the labor force (Kletzer 2001, 101, Table D2). Average wages of those who secured re-employment fell 11-13%. Trade-related job displacement pushes many workers out of good jobs in manufacturing and other trade-related industries, often into lower-paying industries, and frequently out of the labor market altogether...."
—The author thanks Josh Bivens, Ross Eisenbrey, and Lawrence Mishel for comments.
The entire article can be found at
The Wal-Mart effect
A downloadable pdf version of the article can be found at:
www.epi.org/issuebriefs/235/ib235.pdf
by Robert E. Scott
"China’s entry into the World Trade Organization (WTO) was supposed to improve the U.S. trade deficit with China and create good jobs in the United States. But those promises have gone unfulfilled: the total U.S. trade deficit with China reached $235 billion in 2006. Between 2001 and 2006, this growing deficit eliminated 1.8 million U.S. jobs (Scott 2007). The world’s biggest retailer, U.S.-based Wal-Mart was responsible for $27 billion in U.S. imports from China in 2006 and 11% of the growth of the total U.S. trade deficit with China between 2001 and 2006. Wal-Mart’s trade deficit with China alone eliminated nearly 200,000 U.S. jobs in this period....
China has achieved its rapidly growing trade surpluses by purchasing more than $1 trillion in U.S. Treasury bills and other government securities over the past few years in order to artificially and illegally reduce the value of its currency and thereby lower the cost of its exports to the United States and other countries. It has also repressed the labor rights of its workers and suppressed their wages, making its products artificially cheap and further subsidizing its exports. Wal-Mart has aided China’s abuse of labor rights and its violations of internally recognized norms of fair trade behavior by providing a vast and growing conduit for the distribution of artificially cheap and subsidized Chinese exports to the United States....
Exports support jobs in the United States, and imports displace them. However, an increase in exports will not support the creation of new jobs if, for example, a domestic firm exports parts that used to be shipped to a domestic auto assembly plant, and those products are used to build cars that are then sent back to the United States.1 Thus, the net effect of trade flows on employment must be based on an analysis of the trade balance....
U.S. exports to China in 2001 supported 189,000 jobs, but U.S. imports displaced production that would have supported 1,190,000 jobs, as shown in the bottom half of Table 1. Therefore, the $84.1 billion trade deficit in 2001 displaced 1 million jobs in that year. Job displacement rose to 2,763,000 in 2006. Growth in trade deficits with China has reduced demand for goods produced in every region of the United States and has led to job displacement in all 50 states and the District of Columbia....
Wal-Mart’s role
Wal-Mart accounted for approximately 9.3% of total U.S. imports from China between 2001 and 2006. This estimate is based on widely reported statistics, including Wal-Mart’s own estimates of its imports from China.5 U.S. imports from China increased $185 billion between 2001 and 2006, as shown in the top half of Table 1, an increase of 181%. Wal-Mart’s share of U.S. imports from China was stable in this period. Its imports increased from $9.5 billion in 2001 to $26.7 billion in 2006, an increase of $17.2 billion (181%)....
The Wal-Mart trade deficit displaced 111,400 jobs in 2001 and 308,100 jobs in 2006. Thus, Wal-Mart was responsible for displacing at least 196,700 U.S. jobs in this period alone, as shown in the bottom half of Table 1 and in Figure A.....Wal-Mart was responsible....for 11.2% of the U.S. job losses due to growing trade deficits with China (Table 1)....
Workers displaced by trade from the manufacturing sector have been shown to have particular difficulty in securing comparable employment elsewhere in the economy. More than one-third of workers displaced from manufacturing dropped out of the labor force (Kletzer 2001, 101, Table D2). Average wages of those who secured re-employment fell 11-13%. Trade-related job displacement pushes many workers out of good jobs in manufacturing and other trade-related industries, often into lower-paying industries, and frequently out of the labor market altogether...."
—The author thanks Josh Bivens, Ross Eisenbrey, and Lawrence Mishel for comments.
The entire article can be found at
The Wal-Mart effect
A downloadable pdf version of the article can be found at:
www.epi.org/issuebriefs/235/ib235.pdf