American Shipper

Wal-Mart’s Chinese imports cost 300,000 U.S. jobs in 2006

Wal-Mart’s Chinese imports cost 300,000 U.S. jobs in 2006

Retail giant Wal-Mart’s reliance on China as a source of cheap imports cost the United States more than 300,000 jobs last year, according to an economic think tank analysis released Tuesday.

   The retailer’s dependence on these imports is reflected in the $151 billion U.S. trade imbalance with China, according to the Economic Policy Institute analysis, The Wal-Mart Effect. Washington, D.C.-based EPI describes itself as an independent, nonprofit, nonpartisan think tank that researches the impact of economic trends and policies on working people.

   According to the analysis, Bentonville, Ark.-based Wal-Mart imported $26.7 billion worth of Chinese goods into the United States last year, representing 9.3 percent of the total $287.1 billion in U.S. imports from China. In 2001, Wal-Mart imported $9.5 billion worth of Chinese goods, or 9.2 percent of all imported Chinese goods. This share has grown at the same pace as the U.S./China trade imbalance over the past five years, both up 181 percent.

   “As they are a retailer and not a manufacturer,” the group said, “Wal-Mart exports only a negligible amount to China, accounting for at most 0.2 percent of total U.S. exports to China.”

   U.S. exports to China in 2001, the analysis details, supported 189,000 jobs. However, U.S. imports displaced production that would have supported nearly 1.2 million jobs.

   “Therefore, the $84.1 billion trade deficit in 2001 displaced 1 million jobs in that year,” said the analysis. “And, job displacement rose to 2,763,000 in 2006.”

   Growth in trade deficits with China, the analysis found, has reduced demand for goods produced in every region of the United States and has led to job displacement in all 50 states and the District of Columbia.

   The Wal-Mart-created portion of the trade imbalance, according to the analysis, displaced 308,100 jobs in 2006, or 11.2 percent of all jobs lost to the U.S./China trade imbalance. On average, the analysis found, each of the 4,022 stores Wal-Mart operates in the United States was responsible for the loss of about 77 jobs due to Wal-Mart’s portion of the trade deficit with China in 2006.

   “Now we know the impact that imports from China to the world’s largest retailer has on our nation’s jobs,” said Robert Scott, EPI economist and analysis author. “What’s good for Wal-Mart is not always good for U.S. workers.”

   The analysis also found that job losses in the manufacturing sector account for 68 percent of total jobs displaced due to the growing trade U.S./China trade deficit from 2001 to 2006. More than one-third of manufacturing workers displaced by trade dropped out of the labor market, the analysis found, and the average wages of those who found new jobs fell by 11 percent to 13 percent.