Beggaring Thy Neighbor Robbing Joe To Pay Chan

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employment ratio

 

 

household-income-month

Source: Dshort.com, nominal and inflation adjusted household income growth

 

Adjusting for inflation, Americans are much poorer than they were in 2000.

 

income percentilemybudget360.com

 

The U.S. began a continuous run of ever-expanding trade deficits in the mid-1970s (the decline in manufacturing’s share of US GDP dropped from 19.2 percent in 1988 to 14.1 percent in 2001, a decline of 27 percent) and it’s no coincidence that at the same time U.S. median income stopped growing.

“While the recovery of the labor market and the broader U.S. economy depend critically on job growth, equally important is the quality of those jobs.” Lila Shapiro, Trading Down, Huffington Post

PNTR

“Until recently first world capital and technology were confined to the first world, no area of which had a massive labor cost advantage that would convey an absolute advantage and suck in capital and technology from other first world areas. The Internet, changes in Asian receptivity to foreign investment, and the willingness of first world corporations to make high-tech investments in third world countries are new developments.

 

It is irresponsible to assume that the US will not be affected by these new developments or to assume without careful thought that the impact on the US will be beneficial.” Paul Craig Roberts, More On The Trade Wars

In 2001 the U.S. lost 1.5 million jobs in the manufacturing sector. It was the first full year U.S. policymakers had instituted Permanent Normal Trade Relations (PNTR) with China. They did so because they were promised unrestricted access to a booming domestic market for U.S. exports and an improvement in the communist regime’s human rights record.

 

Of course neither happened – human rights abuses worsened and the Chinese continued with nontariff import barriers.

 

What did happen was an invitation was printed - ‘come one come all our doors are wide open’ – it was a golden opportunity for U.S. multinational companies to shift their manufacturing facilities to China and they did.

 

Millions of American manufacturing jobs were lost in the search for cheaper production and enhanced profits.

"On average, 1,276 manufacturing jobs were lost every day for the past 12 years. A net of 66,486 manufacturing establishments closed, from 404,758 in 2000 down to 338,273 in 2011. In other words, on each day since the year 2000, America had, on average, 17 fewer manufacturing establishments than it had the previous day. In fact, in January 2012 there were more unemployed Americans (12.8 million) than there were Americans who worked in manufacturing (just under 12 million). In reality... U.S. manufacturing has been in a state of structural decline due to loss of U.S. competitiveness, not temporary decline based on the business cycle." Information Technology & Innovation Foundation (ITIF) report

 

 

“The rapid increase in U.S. imports of Chinese goods during the past two decades has had a substantial impact on employment and household incomes, benefits program enrollments, and transfer payments in local labor markets exposed to increased import competition. These effects extend far outside the manufacturing sector, and they imply substantial changes in worker and household welfare.” David Autor and colleagues, Massachusetts Institute of Technology, The China Syndrome: Local Labor Market Effects of Import Competition in the United States

 


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