Oregon Comes Out a Loser in Trade Balance with China

News Release
July 29, 2008 Download PDF

Since China’s entry into the World Trade Organization, a ballooning trade deficit with the Asian giant has caused massive job losses in the U.S., with Oregon workers among the hardest hit, according to a report released today by the Economic Policy Institute (EPI).

Download a copy of this news release:

Oregon Comes Out a Loser in Trade Balance with China (PDF)

Related materials:

Economic Policy Institute report The China Trade Toll: Widespread Wage Suppression, 2 Million Jobs Lost in the U.S.
July 29, 2008.

The Washington, D.C.-based think tank placed Oregon among the four states with the highest share of total state employment lost to China trade between 2001 and 2007. Oregon job losses during that period totaled nearly 37,000, the equivalent of 2.3 percent of all state employment, said the EPI report.

“We need to recognize that trade is not an unmitigated good, particularly when — as in China’s case — we allow our trading partners to shirk on labor and environmental standards and to subsidize heavily their domestic industries,” said Joy Margheim, a policy analyst with the Oregon Center for Public Policy who reviewed the report. “When it comes to China trade since 2001, Oregon comes out a loser.”

Indeed, the entire U.S. comes out a loser in EPI’s report The China Trade Toll: Widespread Wage Suppression, 2 Million Jobs Lost in the U.S. According to EPI, the U.S. trade deficit with China swelled from $84 billion in 2001 to $262 billion in 2007.

As its title indicates, the report estimated job losses nationwide at over 2 million since China’s entry into the WTO. EPI said that more than half of the lost jobs paid above-average wages.

Among the hardest-hit sectors has been the computer and electronics industry, where trade with China has resulted in a loss of 15,000 Oregon jobs, according to EPI.

To put the magnitude of Oregon’s job loss in the computer and electronics industry in perspective, it nearly equals the 15,500 Oregonians employed by Intel, Oregon’s largest private employer, according to information on the company’s website.

Workers across the country displaced by the Chinese trade deficit saw their wages drop by $8,146 on average last year, as they more likely settled for a lower-paying job, the report said. Overall, competition with workers in less-developed countries has put downward pressure on U.S. wages, lowering the pay in 2006 of a full-time median-wage production worker with less than a four-year college degree by about $1,400.

Calling for a fundamental change in the U.S.-China trade relationship, EPI said the first steps in restructuring are undoing China’s exchange rate policy that keeps its currency artificially low and improving China’s labor standards.

“Bad trade agreements like those with China have allowed the worst kind of corporate greed to go unchecked while working families pay the price," said Tom Chamberlain, president of the Oregon AFL-CIO, which represents more than 225,000 working men and women in Oregon. "The magnitude of Oregon's job losses as a result of trade with China demands that Congress reform bad trade deals to ensure fair labor and environmental standards abroad and an even playing field for American workers competing for jobs with workers around the world.”

According to Margheim, state lawmakers can also help protect Oregon workers by strengthening job retraining for emerging industries such as alternative energy, providing adequate unemployment insurance, and supporting collective bargaining rights to give workers the opportunity to secure adequate wages and benefits.

Margheim also underscored the need for investing in public structures — universal health care, affordable housing and high-quality public education — that provide a baseline of economic security for working Oregonians.

The Oregon Center for Public Policy is a non-partisan research institute that does in-depth research and analysis on budget, tax, and economic issues. The Center’s goal is to improve decision making and generate more opportunities for all Oregonians.