Suspicions confirmed: China’s cheap manufacturing causing hard-core unemployment in US
David Autor, and economics professor at MIT, is co-author of a report that confirms the suspicions of many that the low-cost labor in Asia is costing jobs in the US and damaging whole communities effected by lost manufacturing.
People drop out of the labor force, and the data strongly suggest that it takes some people a long time to get back on their feet, if they do at all.” Moreover, Autor notes, when a large manufacturer closes its doors, “it does not simply affect an industry, but affects a whole locality.”
The study looked at offshoring impact between 1990 and 2007. The finding:
At the start of that period, low-income countries accounted for only about 3 percent of U.S. manufacturing imports; by 2007, that figure had increased to about 12 percent, with China representing 91 percent of the increase. […] All told, as American imports from China grew more than tenfold between 1991 and 2007, roughly a million U.S. workers lost jobs due to increased low-wage competition from China — about a quarter of all U.S. job losses in manufacturing during the time period.
“People like to think that workers flow freely across sectors, but in reality, they don’t,” Autor says.
Laissez-faire capitalists, supercilious CEOs, and technology engineers cavalierly wave off employment problems caused by offshoring and automation. They just say people have been finding new things to do since the beginning of the industrial revolution. So it’s great to see a top-ranked school like MIT provide hard data to dispel superficial myths.