Debate over how many jobs the United States loses to China has gone on for years. Today, China is one of the two largest manufacturing economies in the world. The other is the United States. Many labor groups and politicians are trying to tip factory activity back to the U.S. — a difficult task to accomplish when companies send work to China to bring labor costs down. So, in many cases, China cannot be blamed for the shift in workers.
24/7 Wall St.: America's disappearing jobs
In a recent study, the Economic Policy Institute analyzed American jobs lost to China between 2001 and 2011. During that time, “the trade deficit with China eliminated or displaced more than 2.7 million U.S. jobs, over 2.1 million of which were in manufacturing,” according to the report. Based on the study, 24/7 Wall St. identified the 10 states that experienced the most job loss as a result of the deficit between 2001 and 2011.
Some industries were affected more than others. Between 2001 and 2011, the U.S. trade deficit with China grew $217.5 billion, with U.S. imports of computer and electronic parts, including computer, semiconductors and audio-video equipment, making up 55 percent of the total. Of the 2.1 million manufacturing jobs lost, more than 1 million were in the computer and electronic products category.
As a result, many of the states that lost the most jobs have congressional districts with high concentrations of technology jobs. According to the report, states like California and Texas have congressional districts with heavy focus on tech. Four of the five congressional districts with the highest proportional decline — California’s 13th, 14th, 15th and 16th — are in the tech-heavy San Francisco Bay Area. The other is Texas’ 31st district, which forms part of Austin, also home to many of the nation’s largest technology companies.
Districts in some states, including Georgia and Alabama, “were especially hard-hit by job displacement in a variety of manufacturing industries, including computers and electronic products, textiles and apparel, and furniture,” according to the institute. Out of the country’s 435 congressional districts, Georgia’s 9th District is among the top 25 for job loss. The district includes the city of Dalton, which is home to manufacturers, including many prominent upholstery corporations.
Despite the talk of a manufacturing resurgence, Robert Scott, the author of the institute's study, calls this “hot air.” He notes that 50,000 manufacturing facilities have been closed since 2001 with very few coming back anytime soon. He suggests the only way to get a manufacturing resurgence off the ground is for the federal government to crack down on China’s currency manipulation and to get American companies to truly invest in manufacturing. “There is a lack of willingness to put that in place,” Scott said. “Standing by and hoping manufacturing is going to get better isn’t going to work.”
24/7 Wall St. identified the states losing the most jobs to China based on the Economic Policy Institute report, “The China Toll.” To reflect how much the trade deficit has affected state and local economies, we considered states that lost the most jobs relative to the population. On this basis, small states like New Hampshire and Vermont have been just as hurt when worker migration is compared to total jobs in each state. 24/7 Wall St. also reviewed the level of export activity and job losses in the 50 states and 435 congressional districts relative to the number of people employed by state. The relative growth rate of gross domestic product for each state for 2011 and between 2008 and 2011 is based on data from the institute's report. The July 2012 unemployment rate by state is from the Bureau of Labor Statistics.
24/7 Wall St.: America's most hated industries
What emerges from these figures is that the shift of jobs to China does not spare any state based on its unemployment rate or GDP growth. Nor does it spare any single industry or sector, from technology to shoe making. China’s ability to take jobs from the U.S. stretches across nearly every aspect of the American economy.
These are the 10 states losing the most jobs to China.
1. New Hampshire
- Percent jobs lost: 2.94 percent
- Unemployment rate: 5.4 percent (seventh lowest)
- GDP growth: 1.5 percent (18th highest)
Growth in New Hampshire exports to China has grown at a whopping rate of 1,032 percent between 2000 and 2011, according to the U.S.-China Business Council. During the same time frame, exports to the rest of the world have grown by just 69 percent. Seems that some companies in New Hampshire have decided that making products in China would be more efficient than exporting — almost 3 percent of the state’s jobs between 2001 and 2011 have been moved there. Fortunately, New Hampshire’s economy was stronger than most state economies. The unemployment rate of 5.4 percent, the seventh lowest in the United States, was almost three percentage points lower than the national rate. Between 2008 and 2011, GDP has grown by 3.89 percent, which places New Hampshire in the top 10 states in terms of GDP growth.
2. California
- Percent jobs lost: 2.87 percent
- Unemployment rate: 10.7 percent (third highest)
- GDP growth: 2 percent (11th highest)
Four of the five congressional districts (of the 435 examined) with the most jobs lost are based in the Bay Area of California, home to many of America’s largest technology corporations. According to the San Francisco Chronicle, executives of California companies point to “strict environmental regulations and high taxes and labor costs” as barriers for bringing jobs back to the U.S. This comes at a time when the economy of America’s most populous state is struggling — the 10.7 percent unemployment rate in California was the third highest in the country in July. Between 2008 and 2011, California’s GDP has declined by $20.75 billion, far larger than any other state.
24/7 Wall St.: American cities adding the most jobs
3. Massachusetts
- Percent jobs lost: 2.86 percent
- Unemployment rate: 6.1 percent (12th lowest)
- GDP growth: 2.2 percent (seventh highest)
President Obama and his campaign surrogates have claimed that Mitt Romney was heavily responsible for jobs being shipped overseas while the GOP candidate was governor of Massachusetts between 2003 and 2007. Factcheck.org notes that jobs did in fact go overseas during Romney’s time in office; however, the rate of job loss during that time actually was less compared to the four years before and after he was in office.
Two congressional districts in Massachusetts were in the top 10 in the country for jobs lost. Massachusetts 5th Congressional District shipped 17,200 jobs to China between 2001 and 2011, which amounts to 5.42 percent of the district’s current employment of 317,400. The largest city in the district is Lowell, known for its manufacturing base. Massachusetts 3rd District, which contains the state’s second-largest city of Worcester, has shipped 15,500 jobs overseas, which amounts to 4.8 percent of the current employment of 322,800 in the district.
4. Oregon
- Percent jobs lost: 2.85 percent
- Unemployment rate: 8.7 percent (13th highest)
- GDP growth: 4.7 percent (second highest)
Oregon’s 1st Congressional District was hit the hardest by jobs moving to China. In 10 years, 21,100 jobs have been sent to China, which is 5.44 percent of the 388,100 people currently employed in the district. The district includes Beaverton, home to Nike Inc.’s headquarters. Nike has received substantial criticism over its outsourcing to China and its human rights record abroad. The good news for Oregon is that the economy is looking like it is making a turnaround. While the state’s unemployment was higher than the national rate, its GDP growth rate of 4.7 percent in 2011 was the second highest in the country that year. Between 2008 and 2011, GDP grew by 9.43 percent, which was higher than all but two states in the U.S.
5. North Carolina
- Percent jobs lost: 2.67 percent
- Unemployment rate: 9.6 percent (fifth highest)
- GDP growth: 1.8 percent (15th highest)
The congressional district hit the hardest in North Carolina was the 4th, where North Carolina’s Research Triangle is located. The Research Triangle has been an East Coast version of Silicon Valley, with many large technology employers having a major presence in the region. Another sizable business where jobs have moved from the United States to China was furniture manufacturing. According to research from Duke University, High Point, N.C., is the “Furniture Capital of the World,” but has been losing jobs to China since the 1990s.
Click here to read the rest of 24/7 Wall St.'s States losing the most jobs to China