Report: China trade deficit sucks jobs out of New Hampshire
Study says state has suffered biggest job loss due to massive imbalance
New Hampshire has 24,000 fewer jobs because of the massive trade deficit with China – 3.55 percent of the state workforce in 2017, a larger percentage than any other state in the nation, according to report released Tuesday by the Economic Policy Institute, a liberal think tank.
The report blames a $375 billion deficit with China for the loss of 3.4 million jobs in the U.S. manufacturing and high-tech sectors since 2001, when China joined the World Trade Organization. The total includes actual job loss and “job opportunity” loss.
While New Hampshire only accounts for a tiny percentage of job loss, the deficit with China has a bigger impact on the state because of our small workforce. California lost the most jobs overall, over a half a million, but that accounts for 3.34 percent of the state workforce, putting it at NO 3 overall., Massachusetts is seventh (2.75 percent), Vermont eighth (2.74) Maine 31st(1.91 percent). Wyoming and Washington, D.C. are at the bottom 0.72 percent and .029 percent, respectively.
That’s partly because the Granite State has a relatively strong manufacturing base, particularly in the tech sector. The state ranks 15thin manufacturing as a total share of employment, said Robert Scott, co-author of the report and senior economist and director of trade and manufacturing policy research at the institute.
How do the numbers square with New Hampshire having one of the lowest unemployment rates in the country and employers have trouble finding workers to fill existing jobs?
one, Scott said, the trade deficit shifts the makeup of the workforce, so that there are fewer manufacturing jobs and more in the service sector.
“We have jobs, but there are more bad jobs and fewer good jobs,” he said.
Second, states that were hit hard during the recession, suffered employment migration. “People moved to where the jobs were, so part of the workforce is gone.”
If the trade deficit with China hurts the nation and state, wouldn’t a trade war with China help both?
“Just because there’s less trade, doesn’t mean the trade imbalance is going to improve,” said Scott, who said that it will probably get worse.
Retaliation by China will offset some of the tariffs imposed by the United States, but China devaluating its currency will more than offset it.
While the Trump administration might want to negotiate a better deal with China, and eventually lower the trade deficit, “the strategy is completely flawed” Scott said, and is more an attempt to send a political message that he is being tough on trade than actually improve things.
“It is more punishment-based than policy-based,” he said. Lowering the value of the dollar by more than a third compared to China’s renminbi would be more effective than increasing tariffs, Scott said.