China trade has cost 2.3 mln U.S. jobs

The U.S. trade deficit with China cost 2.3 mln American jobs between 2001 and 2007, the Economic Policy Institute said 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, according to the report, funded in part by labour unions.
"This report shows the extent of damage caused by Chinese cheating," said Scott Paul, executive director of the Alliance for American Manufacturing.
"(We hope) it will help to focus the debate on trade to where it needs to be right now with respect to China," Paul said, noting that free trade is shaping up as a major issue in the November presidential election.
U.S. manufacturers, labour unions and many lawmakers have long accused China of manipulating its currency to give Chinese companies an unfair advantage in international trade, and are pressing China to continue to allow the yuan to rise against the U.S. dollar to help level the playing field.
China has said the United States should recognize how much its yuan currency has already risen against the U.S. dollar — it is about 20% higher since China revalued its currency in July 2005.
China has also said the fact that Americans save much less of their incomes than do the Chinese has fuelled the trade deficit. Chinese-made goods have been snapped up in recent years by U.S. consumers looking for low prices.
The EPI report showed more than two-thirds of the jobs displaced by China trade deficits were in manufacturing and more than half came from the top half of the U.S. wage distribution. U.S. factory jobs typically pay well and include health insurance coverage and retirement benefits.
The manufacturing sectors hit hardest included computers and electronics, apparel and fabricated metal products. Service sectors like administrative support and professional, scientific and technical services also saw large job displacement.
Contrary to popular belief, jobs lost to China were not necessarily low-skilled, the report showed. 31% of the jobs lost were among workers with college degrees.
"A dramatic example is the loss of 200,000 scientists and engineers within the manufacturing sector, a 10.7% drop," the non-partisan AAM said in a statement.
The issue of free trade has dominated campaign debate in parts of the United States, including industrial Rust Belt states like Ohio, Michigan and Pennsylvania — all of which are politically divided and will be closely contested by the presidential contenders.
Democratic candidate Barack Obama has promoted a message of more trade restrictions — of "fair trade not free trade" — while Republican John McCain has embraced free trade as a way for America to win new markets and stay competitive. (Reuters)