Business
21:36, 12-Apr-2018
5 Questions on Trade Ties: Who should be blamed for American job losses?
["china"]
Share
Copied
US President Donald Trump claims that China's trade with the US has left lots of Americans in the manufacturing sector without jobs that he wants to bring back. But some analysts say the United States has been bleeding jobs for years for a variety of reasons.
American employment stands at record high rates
Trump repeatedly claims that American jobs have been stolen by China despite the strong performance of America's job market. The unemployment rate in the US has been on a steady decline over the past several years.
Based on US Department of Labor figures, the jobless rate fell to a 17-year low of 4.1 percent last October and has remained there since then. Meanwhile, America's non-farm payroll has achieved gains for the past 90 consecutive months, the longest streak on record.
Some job losses are due to automation
Technology and automation also have eliminated millions of manual jobs in America. A Ball State University research report shows that the US lost 5.6 million manufacturing jobs from 2000 to 2010, 85 percent of them to technology development.
Meanwhile, analysts expect that an additional 73 million manufacturing jobs will disappear by 2030 due to automation.
American firms want low labor costs
China has been known as the "world's factory" for years, as much of the world's low-end production is completed here. A survey from the Boston Consulting Group shows that increasing labor costs in China has forced 24 percent of the American companies to relocate to lower-cost areas, such as Vietnam and Bangladesh, instead of returning to the US.
In terms of labor-intensive manufacturing, the US has no competitiveness, according to a current affairs commentator, Einar Tangen. He said that wage income in manufacturing is 15 US dollars per hour in the US, while that is a whole day's wage for a worker in China.
Trade with China helps fuel the US economy
Chinese companies are the winners, beating many American firms in manufacturing industries. But the American services sector, such as finance, insurance, shipping and product development, have benefited a lot from the economic relationship with China. That is the view of James Nolt, a senior fellow at the World Policy Institute.
And that part is not calculated into the deficit list by Trump’s administration, Nolt added. Besides, he mentioned that trade with China benefits farmers and exporters, contributing a lot to the US overall economy.
Professor Dennis Chookaszian of the Booth School of Business at the University of Chicago noted that it is the US “economy” that is pushing business into China.
Read more: