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How Has Trade Affected U.S. Manufacturing Jobs?

Thursday, December 6, 2018

Recent U.S. manufacturing job losses attributed to Chinese imports seem small compared with monthly turnover of the entire U.S. labor market, and the share of recent losses also seems small when looking at long-term declines in manufacturing employment.

That's according to B. Ravikumar, St. Louis Fed senior vice president and deputy director of research, at a recent Dialogue with the Fed lecture on the economics of trade. For perspective, Ravikumar looked at recent estimates of lost U.S. manufacturing employment due to imports from China over a 12-year period. One study showed, on average, 200,000 workers lost their jobs per year since China’s entry into the World Trade Organization.

Is this a big or small number? Looking at monthly data of hires and separations in the overall U.S. labor market (going back to 2001), Ravikumar remarked on the “huge amount of churning” as compared to manufacturing job losses attributed to trade.

Meanwhile, he said that although there have been declines in U.S. manufacturing as a share of employment since China's entry into the WTO, manufacturing’s share has been declining for decades. "This is not something that happened 10 or 20 years ago; this has been going on for a long time."

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