Wal-Mart and the Loss of U.S. Jobs
'Report shows Wal-Mart has played a major role in creating a record trade deficit with China'
By S.M. Willhelm / The Rag Blog / September 11, 2008
Wal-Mart claims it creates jobs across America, but a new report shows a much different reality.
The giant retailer’s reliance on cheap goods made in China has cost this country nearly 200,000 jobs since 2001, says the report, The Wal-Mart Effect, by the nonprofit Economic Policy Institute (EPI).
The report shows Wal-Mart has played a major role in creating a record trade deficit with China that has eliminated some 1.8 million jobs, mainly in manufacturing. Wal-Mart’s China Imports Cost Nearly 200,000 U.S. Jobs
The Rag Blog
Wal-Mart claims it creates jobs across America, but a new report shows a much different reality.
The giant retailer’s reliance on cheap goods made in China has cost this country nearly 200,000 jobs since 2001, says the report, The Wal-Mart Effect, by the nonprofit Economic Policy Institute (EPI).
The report shows Wal-Mart has played a major role in creating a record trade deficit with China that has eliminated some 1.8 million jobs, mainly in manufacturing.
The U.S. trade deficit with China reached a whopping $233 billion last year, and imports for Wal-Mart alone accounted for $27 billion—11 percent of that total. This year’s first-quarter $46.4 billion total deficit is twice as large as in the same period last year.
The U.S. trade deficit with China between 1997 and 2006 has displaced production that could have supported about 2.2 million U.S. jobs, according to EPI. Most of these jobs (1.8 million) have been lost since China entered the World Trade Organization (WTO) in 2001.
Contrary to the predictions of its supporters, China’s entry into the WTO has failed to reduce its trade surplus with the United States or increase overall U.S. employment.
Says economist Robert Scott, author of the EPI report: Now we know the impact that imports from China to the world’s largest retailer has on our nation’s jobs. What’s good for Wal-Mart is not always good for U.S. workers.
The AFL-CIO, domestic manufacturers and many economic experts maintain that one key reason the U.S. trade deficit with China is so high is because China deliberately undervalues its currency, the yuan, to keep the value artificially low so it can boost exports and discourage imports—running up the U.S. trade deficit and costing good American jobs.
An AFL-CIO report shows China’s fixed currency rate artificially lowers the price of its goods by 40 percent, effectively subsidizing China’s exports and putting U.S. companies at a competitive disadvantage.
The bipartisan Fair Currency Act, introduced by Reps. Tim Ryan (D-Ohio) and Duncan Hunter (R-Calif.), would clarify that currency manipulation is an illegal subsidy under WTO rules. A similar bill was introduced in the Senate by Sens. Jim Bunning (R-Ky.), Evan Bayh (D-Ind.) and Debbie Stabenow (D-Mich.).
In 2004 and 2005, the Bush administration rejected petitions from the AFL-CIO and business and farm leaders that asked Bush to take action against China’s currency manipulation.
James Parks / Jun 27, 2007
Source / AFL/CIO NOW
