Where the Jobs Went–And Why

Jan 04 2011 Published by under Uncategorized

If ever a picture were worth a thousand words, this is that picture. From the fourth quarter of 2007 through the third quarter of 2010, GDP and jobs are booming in the large cheap-labor countries of China and India, with Brazil thrown in for good measure, and decreased in the U.S. and elsewhere in the western industrialized world.

We know this story. Jobs have gone to China and India. The resulting unemployment in the U.S. has reduced demand among consumers, and it is this lack of demand that keeps companies from hiring and keeps unemployment high.  There is too much dead money stuffed away in perpetually laddering CDs and not enough circulating. Direct stimulus like unemployment insurance supports demand by giving money directly to those who will spend it on necessities.

But what else is going on here?

Three of the four gainers in the chart above, China, India, and Germany are all big net exporters, and they all have big trade surpluses with us. Those big gains in their GDP are coming in part from our consumer spending.

Let’s just look at China for a moment. At somewhere over $250 billion* for 2010, China’s surplus with the U.S. is really in its own size category. As recently as a decade ago, the trade deficit was under $100 billion annually. This is how our annual trade shortfall has grown over the last decade according to the U.S. Census Bureau:

ANNUAL TRADE DEFICIT WITH CHINA 2000-2010* (in billions)

This trade deficit is another way we as consumers give economic advantage to China and take it away from U.S. companies—and from ourselves.  Remember that the big stall in the economy is demand for U.S. goods.  This chart says that as consumers, we are choosing to act against our economic interests as employees by buying Chinese-made goods over U.S.-made goods. We are helping to kill our own economy.

And it’s not just Chinese imports.  The chart below shows our monthly trade imbalance around the world just during the recent recession. At a time when we should be spending to support jobs at home, we are spending $40 billion a month more on imports than the exports we ship out. And we overspent more in 2010 than in 2009.

Every one of us needs to decide to buy American whenever possible. We would not be importing so much if the demand were not here.  It is hard to find American-made goods sometimes. Start looking at clothing labels and you will see that most of it seems tocome from China, including brands like American Rag. But American products are outthere if you know where to look.  Here are a few sites to help you find American-made products.

http://www.madeinusa.org/ is a nonprofit searchable directory of all kinds of products that also includes information on why it’s important to the economy to buy American
http://www.howtobuyamerican.com/index.php also focuses on consumer education
http://www.americansworking.com/ also includes a directory to internet shopping and education
www.stillmadeinusa.com has the above plus a short list of companies that support specific states

Direct Purchase Sites
http://www.americanmadeproducts.com/ is an online retail company that sells over 9000 products 100% made in the USA. The site includes pictures and is sortable by category, price, manufacturer, etc.
http://www.usab2c.com/ over 6000 products

Directory of Other Directories: http://hubpages.com/hub/American-Made

It is absolutely true that our high unemployment is due in part to jobs being shipped overseas. Direct cash infusion to people with no money is not only taking care of our citizens, it is also stimulating demand in the economy and hence job creation. HOWEVER, the rest of the story is that we as consumers have to choose to support our own economy by buying made-in-America goods to complete the economic support circle.

*2010 trade deficit estimates based on recorded figures through October

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