FAQ: Do imports put U.S. jobs at risk?

Talking Points:

International trade sometimes does cause employment to increase in one sector and decrease in another. But so do many other factors. Exaggerated fears of massive job losses due to imports are misplaced. Contrary to some claims, only a very small percentage of American jobs are ever put at risk from imports. And surprising to many, U.S. employment has been strong during periods of elevated imports.

Stated by the Progressive Policy Institute in June 2005, “What role do trade and the global economy play in job loss? Perhaps less than many people assume. Definitions of ‘trade-related’ job loss are unclear, reliable statistics are scarce, and the statistics which do emerge are rarely put in the context of total layoffs. But research seems to show that at most they account for about 5 percent of layoffs, and more likely between 2 percent and 3 percent.”

According to the Bureau of Labor Statistics payroll data, which does not include farm workers and some self-employed workers, in June 2005 goods-producing industries (manufacturing, mining, logging and construction) accounted for 22 million workers; service-providing industries accounted for the remaining 111 million workers. The workers not in the manufacturing sector are in industries that by their nature do not produce tradable goods or services, or where imports account for a very small to nonexistent share of domestic supply, according to Daniel Griswold, director of the CATO Institute’s Center for Trade Policy Studies. And in the manufacturing sector, only a small number of workers are in industries considered import-sensitive.

In 2004, agricultural workers numbered 2.2 million and represented approximately 1.6 percent of total U.S. employment, as reported by the U.S. Department of Labor. According to Griswold, some agricultural sectors (such as dairy products, sugar and peanuts) are more vulnerable than others (the larger export-oriented sectors such as wheat, corn and soybeans). “Even in farm sectors most vulnerable to import competition,” said Griswold, “the potential job losses are minuscule in relation to the overall U.S. labor force.”

FAQ: What is the impact of imports on consumers?

Talking Points:

Contrary to some claims, imports are good for the economy and consumers. Imports offer American consumers greater choices, a wider range of quality and access to lower-cost goods and services. They create competition, forcing domestic producers to improve value by increasing quality and/or by reducing costs. And since imports allow the American family to purchase more goods for less money—stretching the dollar—more disposable income is available for education, health care, mortgages, vacations, etc. Imports also help keep inflation down, which is one of the most important factors in raising our standard of living.

“Three out of four families living below the poverty line in America today own a washing machine and at least one car,” observe John Micklethwait and Adrian Wooldridge, authors of A Future Perfect. “Ninety-seven percent own a television; three out of four have a VCR. Thanks to all that terrible competition, many gadgets are much more affordable, particularly in terms of the number of work hours needed to acquire them.”

FAQ: Do imports hurt U.S. manufacturers?

Talking Points:

Imports not only afford American families a higher standard of living—a primary economic goal—but through the availability of lower-cost imported components and materials, U.S. producers are more competitive, which result in enormous benefits.

In 2004, more than half the $1.47 trillion in goods Americans imported were capital goods ($344 billion) and industrial supplies and materials ($412 billion). As stated by Daniel Griswold: “Such imports as petroleum, raw materials, steel and semiconductors are used directly by American producers to lower the cost of their final products. The lower costs in turn lead to increased sales at home and abroad, and in many cases, higher employment within the industry.”

According to the WTO, “Imports expand the range of final products and services that are made by domestic producers by increasing the range of technologies they can use. When mobile telephone equipment became available, services sprang up even in the countries that did not make the equipment. Additionally, because imports offer unique capabilities at attractive prices, they are proven to enhance worker productivity. And higher productivity leads to a host of benefits.”

This section appeared in Part III: Frequently Asked Questions and Talking Points of the book Grasping Globalization: Its Impact and Your Corporate Response, 2005.

John Manzella
About The Author John Manzella [Full Bio]
John Manzella, founder of the ManzellaReport.com, is a world-recognized speaker, author and nationally syndicated columnist on global business, trade policy, labor, and economic trends. His latest book is Global America: Understanding Global and Economic Trends and How To Ensure Competitiveness.

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