Overseas trade has cost N.C. more than 100,000 jobs over past decade

U.S. trade with China has cost North Carolina nearly 108,000 jobs, primarily in manufacturing, since 2001, according to a national study released Tuesday.

That includes a combined 22,334 in the state's 5th and 6th congressional districts, the Economic Policy Institute reported. An estimated 2.8 million jobs were affected nationwide.

 

North Carolina had five congressional districts listed among the top 34 affected nationwide from 2001 to 2010. Some 2.61 percent of the state's workforce lost their jobs due in part to the trade deficit with China, making the state tie for fifth place in the United States in that statistic.

 

The 5th District, which includes parts of Winston-Salem and northwest North Carolina, was ranked No. 26 — down eight spots — at 3.25 percent, or 10,499 jobs. It lost 1,149 jobs in 2010.

 

The 6th District, which includes High Point and parts of Greensboro, was No. 17 — down four spots — at 3.6 percent, or 11,855 jobs. It lost 1,115 jobs in 2010.

Currency manipulation was the hot-button import issue, particularly in the furniture, sock and textile industries, before it was overshadowed by other economic crises.

 

Some critics say the Chinese yuan has been undervalued by as much as 40 percent for the past 10 years, giving its exports a major competitive advantage against products made in the U.S. and much of the world. Chinese exports to the U.S. in 2010, at $364 billion, were more than four times greater than U.S. exports to China, at $85.7 billion.

 

"The U.S.-China trade relationship needs a fundamental change," said Robert Scott, the report's author and an economist with the institute. "Addressing the exchange rate policies and labor standards in the Chinese economy are important first steps."

 

U.S. Sen. Kay Hagan, D-N.C., said she believes "it is critical that Congress seeks to rectify unfair trade policies and currency manipulation to ensure American manufacturers can compete in the 21st century global economy."

U.S. Rep. Howard Coble, R-6th, is one of nine N.C. representatives sponsoring House Bill 639 — the Currency Reform for Fair Trade Act.

 

"This bill will at least force China to compete on a level playing field with U.S. manufacturers," Coble said. Because U.S. environmental, labor and safety standards are more stringent than those in China, "it's difficult to compete against those kinds of economic disadvantages, much less the currency issue," Coble said.

 

Although U.S. Reps. Virginia Foxx, R-5th, and Mel Watt, D-13th, have not signed as sponsors, Foxx said she voted for the bill, which passed in the House but not the Senate.

 

"The key to reinvigorating job creation is fostering a competitive economic environment," Foxx said. "This involves keeping taxes low, eliminating job-killing regulations and fighting for equitable trade relations."

 

Although the bulk of the lost jobs in North Carolina in the past 10 years have been in the furniture and textiles industries, primarily from 2001 to 2007, the state also has experienced larger losses recently in computers and electronics in the Triangle.

 

For example, the 4th District in the Triangle is ranked No. 12 nationally — up three spots. It had the largest job losses by percentage of the workforce in North Carolina at 4 percent, or 15,452 jobs.

 

Perhaps the most recent local example of the negative impact of Chinese trade involves Furniture Transport Group, which was the country's largest specialty transporter of home furniture.

 

Officials there said Monday that they plan to liquidate its operations in High Point and Lenoir within 60 days after being unable to negotiate new financial terms with its senior lender.

 

The company expects most of its 400 drivers — nearly equally split between the two operations — will be able to find other jobs because of a national truck-driver shortage.

 

However, its 200 back-office and administrative personnel — also nearly equally split between the operations — will enter a bleak job market with unemployment rates higher than 10 percent.

 

"The company has been affected significantly by the loss of furniture manufacturing offshore, particularly to China," said Mark Roberts, who is serving as acting chief financial officer. "Even though we captured some of the transporting from furniture marketers and foreign manufacturers, the slowdown in the housing market exasperated our financial situation."

 

Scott said he's not convinced America's loss has been China's gain.

 

"China has become dependent on the U.S. consumer market for employment generation," Scott said. "It has suppressed the purchasing power of its own middle class with a weak currency and now holds over $3 trillion in hard currency reserves instead of investing them in public goods that could benefit Chinese households."