2.8 million U.S. jobs lost to China

American jobs flood out of the U.S. to Brazil, Mexico, China, India and more

An insane world

• Chinese Communists adopt Capitalism to create wealth and jobs
• American Capitalists adopt Socialism to export wealth and jobs

The growing trade deficit with China has eliminated or displaced nearly 2.8 million U.S. jobs since 2001 -– or about 2% of all domestic employment during that period, according to a briefing paper from the Economic Policy Institute.

California was the hardest hit, losing nearly 455,000 jobs from 2001 to 2010 due to trade with the Asian giant, according to Robert Scott, the institute’s director of trade and manufacturing policy research. Texas lost nearly 233,000 positions the same way, reports the Los Angeles Times.

The increase in imports from China is only part of the picture, according to Scott. Since the Chinese yuan is pegged to the U.S. dollar, the currency remained artificially low, making U.S.-made goods more expensive in China and pushing down exports.

And heavy competition and cheap labor from abroad has pushed down wages for U.S. workers and reduced their bargaining power -– especially among the 70% of the workforce without a four-year college degree. In 2006, for example, a full-time median-wage earner lost $1,400 due to globalization, according to the report.

Since China entered the World Trade Organization in 2001, the trade deficit has boomed to $278 billion in 2010 from $84 billion in 2001.

Over that period, nearly 70% of the U.S. jobs lost were in manufacturing. Factory positions working with computer and electronic parts were especially depleted, but other jobs in apparel, textile fabrics and motor vehicles and parts were also significantly affected.

COKE CEO:  Brazil and China are better for business than the U.S.

Imagine a place with low taxes, booming growth and centralized command over all foreign investment. 

That place is called China, and Coke CEO Muhtar Kent says it and Brazil represent far more attractive markets than the U.S.

Kent tells the Financial Times:

“It’s like a well-managed company, China. You have a one-stop shop in terms of the Chinese foreign investment agency and local governments are fighting for investment with each other.

“They’re learning very fast, these countries. In the west, we’re forgetting what really worked 20 years ago. In China and other markets around the world, you see the kind of attention to detail about how business works and how business creates employment.”

Coke recently announced huge investments in China and other emerging markets. Meanwhile it threatened to cancel an investment in France when the government proposed a new soda tax.

Kent argued that US states did not compete enough with each other to attract businesses while Chinese provinces were clamouring to draw investment from international companies. Meanwhile, he said, China’s budget discipline and rapid economic growth made it an appealing place to set up operations.

China now accounts for 7 per cent of Coke’s global sales volume and in the first half of this year it sold more than 1bn cases of its products in China, doubling the rate of its sales there five years ago. Although Coke does not report its profits by country, China represents about 6 per cent of Coke’s annual operating profits, according to analysts at Bernstein Research.

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