A report released by the Economic Policy Institute reveals just how damaging “free” trade with China has been for American workers. In fact, I believe the report even understates the damage.
The U.S. trade deficit with China cost 2.3 million American jobs between 2001 and 2007, the Economic Policy Institute said on Wednesday in a report likely to fuel debate about free trade ahead of November elections.
Even when they found new jobs, workers displaced by job loss to China saw their earnings decrease by an average of $8,146 each year because the new jobs paid less …
I believe the job losses are actually twice as high. Do the math. Our annual trade deficit with China is about $250 billion. Experts say that 2/3 of the cost of products is labor. That means that about $164 billion worth of jobs have been lost. If you assume each such job paid $40,000 per year, that’s a total of 4.2 million jobs, not 2.3 million. And that’s just trade with China. Trade with other overpopulated nations accounts for another $250 billion of the trade deficit. That’s yet another 4.2 million jobs. A total of 8.4 million high-paying manufacturing jobs lost to idiotic trade policies based on 18th century economic theories. That’s enough jobs to employ the entire work force of the state of New York.
It’s time for those theories to be tossed onto history’s scrap heap of failed theories. And it’s time to give their economist proponents the heave-ho as well. We need a new breed of economists willing to remove the rose-colored glasses and return to the basics of balancing our trade books.