CLEAN-UP IN AISLE USA
Thanks to negotiations by Clinton, on December 11, 2001, China entered the World Trade Organization (“WTO”). Clinton promised that it would mean great things for American workers, consumers, and investors... In actuality, entry into the WTO meant great things for China. In 2001, China’s economy was smaller than that of France. Now, 20 years later, China is the world’s second-largest economy and a major trading power. We need government policy that encourages our companies to be successful while simultaneously advocating for the labor source we have here at home. Americans’ consumption of cheap goods exported by China (that came thanks to membership in the WTO) resulted in massive growth for China while adversely impacting jobs and wages in the U.S. MIT economists David Autor, David Dorn, and Gordan Hanson wrote in a poignant 2017 study that cited 986,000 manufacturing jobs in the U.S., or 20% of total job losses in the manufacturing sector between 1999 and 2011 came as a result of the increased competition from China. “The advance of China,” they wrote, “has toppled much of the received empirical wisdom about the impact of trade on labor markets. Other studies point to the eight-year period between 2001 and 2009 to illustrate that during that time the U.S. lost 42,400 factories. Think about that: 42,400 factories closed down.
These closures resulted in a 32% loss of all manufacturing jobs during that eight-year time frame. Manufacturing jobs dropped to 11.7 million people in the sector... For the first time since 1941, the U.S. employed less than 12 million people in manufacturing. As jobs dwindled, the U.S. trade deficit with China grew significantly. According to the Economic Policy Institute, between 2001 and 2007, computer and electronic-part imports accounted for almost half of the $178 billion increase in the U.S. trade deficit with China – resulting in a loss of 2.3 million jobs. The current trajectory suggests that the Chinese economy will dominate the world by 2028. Meanwhile, what does that mean for American jobs? One of the reasons the labor-capital relationship is out of whack is because our labor is exploited overseas. If companies that are always seeking better profitability realize they can outsource their labor, then why wouldn’t they? Where does that ultimately leave America? Not everyone should need a PhD in engineering to provide for themselves and their family. We need government policy that encourages our companies to be successful while simultaneously advocating for the labor source we have here at home.
THE EFFECT OF CHEAP, UNDOCUMENTED LABOR
In addition to trade and outsourcing issues, the Biden administration would be wise to get back to its roots on the issue of immigration. In recent years, Democrats
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March 2021
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