It is old but still revelant
Effect of rising trade deficit shouldnt be ignored
By Josh Bivens
Many economic observers have recently exonerated international trade flows for the hemorrhaging job losses in the manufacturing sector of the United States, generally claiming that either changing demand patterns or rapid productivity growth are the cause of manufacturings decline. But the evidence shows that trade imbalances in manufacturing have accounted for 59% of the decline in manufacturing employment since 1998. A close examination of net imports, demand for manufactured goods, and productivity growth reveals that these three factors influence the U.S. manufacturing industry in the following ways:
U.S. consumers and businesses have not shifted their purchasing away from manufactured goods. In fact, demand for manufactured goods as a share of total demand in the United States has actually grown over the past 10 years.
The rising trade deficit has led to an unprecedented divergence between domestic manufacturing output and demand. Domestic output is now just 76.5% of domestic demand, nearly 14% less than the 1987 to 1997 average. Raising output closer to this previous relationship with demand (around 90%) would generate millions of jobs in manufacturing.
The rising trade deficit in manufactured goods accounts for about 58% of the decline in manufacturing employment between 1998 and 2003 and 34% of the decline from 2000 to 2003. This translates into about 1.78 million jobs since 1998 and 935,000 jobs since 2000 that have been lost due to rising net manufactured imports.
The manufacturing sector lost more than three million jobs between 1998 and 2003, with 2.7 million lost since the immediate pre-recession year of 2000. Roughly coinciding with this manufacturing employment loss, the trade deficit in manufactured goods increased by over $230 billion. The synchronicity of large-scale manufacturing job loss and growing trade deficits has led to a debate about whether international trade flows have contributed to the loss of manufacturing jobs.
Shifting blame for manufacturing job loss: Effect of rising trade deficit shouldn’t be ignored | Economic Policy Institute
Effect of rising trade deficit shouldnt be ignored
By Josh Bivens
Many economic observers have recently exonerated international trade flows for the hemorrhaging job losses in the manufacturing sector of the United States, generally claiming that either changing demand patterns or rapid productivity growth are the cause of manufacturings decline. But the evidence shows that trade imbalances in manufacturing have accounted for 59% of the decline in manufacturing employment since 1998. A close examination of net imports, demand for manufactured goods, and productivity growth reveals that these three factors influence the U.S. manufacturing industry in the following ways:
U.S. consumers and businesses have not shifted their purchasing away from manufactured goods. In fact, demand for manufactured goods as a share of total demand in the United States has actually grown over the past 10 years.
The rising trade deficit has led to an unprecedented divergence between domestic manufacturing output and demand. Domestic output is now just 76.5% of domestic demand, nearly 14% less than the 1987 to 1997 average. Raising output closer to this previous relationship with demand (around 90%) would generate millions of jobs in manufacturing.
The rising trade deficit in manufactured goods accounts for about 58% of the decline in manufacturing employment between 1998 and 2003 and 34% of the decline from 2000 to 2003. This translates into about 1.78 million jobs since 1998 and 935,000 jobs since 2000 that have been lost due to rising net manufactured imports.
The manufacturing sector lost more than three million jobs between 1998 and 2003, with 2.7 million lost since the immediate pre-recession year of 2000. Roughly coinciding with this manufacturing employment loss, the trade deficit in manufactured goods increased by over $230 billion. The synchronicity of large-scale manufacturing job loss and growing trade deficits has led to a debate about whether international trade flows have contributed to the loss of manufacturing jobs.
Shifting blame for manufacturing job loss: Effect of rising trade deficit shouldn’t be ignored | Economic Policy Institute