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September 10, 2008

China and jobs

A report was recently released saying that as a result of the increased trade with China since 2001, 2.3 million U.S. jobs have been lost or displaced. The toll for North Carolina is 80,000 jobs. If accurate, what do these numbers mean about increased world trade and its impact on North Carolina? Listen

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Well, first of all, it means that trade creates change, and that's the long-run result. When you change who does things in the world, who makes things, when you shift production from one country to another country, for example, that's going to create change. It's going to create some jobs, somewhere, but lose jobs elsewhere. Now, clearly North Carolina has seen this directly because we've lost many, many jobs in the textiles, apparel and furniture industries as a result of increased trade with China as China has expanded its production in those areas. So there's no question that we've lost some jobs, but on the other hand, this study doesn't point out there are some benefits to trade. First of all, U.S. exports to China have also increased, and that has created some jobs, not necessarily for the same people, unfortunately, who have lost their jobs, but it does create jobs. Secondly, we now have evidence that China's movement into the world economic arena has resulted in lower prices for many products. And so, for example, we're able to buy our clothes at a cheaper price. That also creates some consumer benefit. So trade and changes in trade area always going to create benefits and costs, but the thing to recognize is that some people are going to benefit, others are going to face the costs, as well as some regions and some states."

Posted by Dave at September 10, 2008 08:00 AM