The Hill says a report from the Economic Policy Institute institute says 2.4 million jobs were lost to China between 2001 and 2008. In other words, while the second George Bush was in office.
While the numbers as presented are credible enough, there are a few problems with any report that trades on the listeners credibility by presenting only a part of the picture. So let’s start with a bit of history.
Historically, the “rush to China” began just after Robert Rubin became Treasury Secretary in 1995, not in 2001. So any honest tally of jobs lost would begin when the first manufacturing plants left for China in early 1996. That is twelve years, not eight. And American manufacturing jobs left for “offshore” at a rate of a million a year between 1996 and the end of 2000, with a total of 5.5 million American manufacturing jobs gone “offshore” during that period.
By 2001, the major companies making the move had left, and were getting the advantages of 17 cent an hour labor and up to a 20% export subsidy. Most of the smaller companies who made the move between 2001 and 2008 missed the very low wages, since the minimum wage went as high as as the equivalent of 36 cents an hour. In addition, the export subsidy for newcomers was sharply reduced, to as low as 8 percent on most products.
The TOTAL number of American manufacturing jobs fleeing the United States for the low wage and export subsidized China is credibly pegged at 8 million jobs total. But that is only the start.
The economists rule of thumb is one new manufacturing job results in five new support jobs. So each job lost to China resulted in a total of six lost American manufacturing or support jobs. Six time eight is still forty eight – according to the calculator.
So the TOTAL job loss over the last fifteen years is a staggering 48 million jobs. Of course, the dot.com and housing bubbles created millions of new but temporary jobs, and small business has created many more. When all the offsets are taken into account, the United States has lost at least 24,000,000 manufacturing and support jobs to China.
The Chinese selectively sought out American companies that were sole source suppliers to the United States Military. For example, Magnequench Corp is a sole source supplier to the AEC, and a critical supplier for our nuclear power and weapons programs. Google Magnequench for more information about a typical “gone to China” company.
Like Magnequench’s employees, many of those workers thrown out of work were highly skilled employees earning as much as $75.00 an hour. And there is no chance that these workers will ever find a comparable job in the United States.
To add insult to injury, one of the excuses the then Vice President, Albert Gore, Jr., used to justify shipping jobs “offshore” was a reduction in pollution.
Here is a link to some of the prize winning work of Lu Guang from the People’s Republic of China that documents the “pollution reduction” that resulted from outsourcing our industry to a country without pollution controls.
Look at the pictures Chinese authorities consider fit for Western eyes to view – and reflect on what those too gross for even the Chinese must look like.