ThinkProgress Logo

Economy

Study Finds Free Trade With China Lowered American Manufacturing By 29.6 Percent

By Jeff Spross on Jan 7, 2013 at 4:15 pm

AP Photo

Around 2001, the raw number of manufacturing jobs in the United States plummeted from just over 17 million to just over 14 million. After leveling off for a few years, it collapsed to around 11.5 million due to the Great Recession. It’s since seen a small rebound under President Obama’s tenure, but the continuing depression has put the long-term fate of manufacturing back on the national radar.

Yesterday, The Washington Post’s Dylan Matthews reported that, according to a new paper, the 2000 normalization of trade relations between China and the United States left domestic manufacturing employment 29.6 percent lower that it would have been without the free trade policy:

PNTR did not actually involve much in the way of new tariff reductions, but what it did offer was certainty. It suggested that previously eliminated tariffs on Chinese goods weren’t coming back anytime soon.

That reassurance, Pierce and Schott argue, mattered a great deal. All told, they argue that employment in the manufacturing sector in the United States was 29.6 percent lower than it otherwise would have been absent PNTR. That means that employment in that sector would have grown — by close to 10 percent, Pierce and Schott estimate — as opposed to shrinking considerably, as it actually did. It presumably would have grown even more in the absent of other, non-PNTR liberalizations, such as China’s admission to the World Trade Organization. The effect was four times as strong for production-line workers as for non-production workers, which is in line with the usual finding that the losers from trade tend to be low-skilled workers in rich countries.

Interestingly, much of the negative effect on manufacturing employment came not from actual job losses but from the absence of job growth that would have been expected without the agreement.

This dovetails with a report from the Economic Policy Institute that the U.S. has lost 2.8 million jobs to China since 2001.

As Matthews points out, most economists agree that freer trade, in the long-run, is a net economic gain. Most obviously, the movement of manufacturing jobs overseas gives millions of poor people around the world the chance to better their economic condition. In turn, rising middle classes in other countries can provide new markets for American exports, thus boosting jobs here at home. And cheap manufactured goods from abroad help low-income Americans by providing goods at lower cost. As Matthews says, “It could still remain the case, as free-trade advocates argue, that it helped productivity and growth in the United States overall.”

The flip side is that manufacturing jobs going overseas moves America towards an “hourglass economy,” in which there are lots of low-income jobs, a decent amount of high-income jobs, but not much in the middle. There’s evidence that America’s growing inequality itself is a drag on economic growth, as well as an argument that keeping manufacturing, research and development geographically close to one another provides a more robust exchange of ideas and feedback in a product’s supply chain.

Finally, more domestic manufacturing means more exports and fewer imports, which means a lower trade deficit. Along with monetary policy and private savings, the trade deficit is part of the macroeconomic mix that effects federal budget deficits.

Alyssa

The Sins Of Notre Dame, And Our Obsession With Football Teams That Win ‘The Right Way’

By Travis Waldron on Jan 7, 2013 at 4:13 pm

On August 31, 2010, Lizzy Seeberg, a 19-year-old freshman at St. Mary’s College in South Bend, Indiana, was allegedly sexually assaulted in the room of a football player at the school’s sister college, Notre Dame. On September 10, Lizzy Seeberg committed suicide.

Tonight, Notre Dame will take the field in the BCS National Championship game hoping to win its first national title since 1998. Old Notre Dame’s return to the top of college football has been the story of the season, and we’re sure to hear commentators waxing poetic about how football means so much to Notre Dame and how Notre Dame means so much to football. Head coach Brian Kelly and Rev. John Jenkins, the school’s chancellor, will be hailed for returning the Fighting Irish to the promised land, and for doing so “the right way.” This university has long lived off its mystique, off the idea that it is a more moral place because it could win even more football games if only it would compromise its academic values.

But as was the case at Penn State, site of the most damning scandal in the history of college football, the definition of “right way” falls short when it comes to sexual misconduct. And so tonight, we won’t hear the story of Lizzy Seeberg, the girl who was allegedly victimized by an athlete who was doing things the “right way” on the field and in the classroom and ignored by a program that was doing things the “right way” in its balance of athletics and academics. But when Seeberg’s life was ruined, our deference to and reverence for the “right way” mentality never wavered.

Seeberg’s story hasn’t been ignored by the national media; in fact, Notre Dame’s appearance in the title game has brought it back to life, if begrudgingly so. Still, the focus of the sports media has remained largely on Notre Dame’s improbable rise to back to the top of college football decades after its heightened academic standards supposedly rendered it irrelevant. Editorials and columns have praised Notre Dame for combining academics and athletics in a way few, if any, other schools do. The school stands as a beacon of hope that football programs can “do things the right way” and still win games.

You’d think we’d have learned what our reverence for and deference to supposed “right way” institutions has wrought. Penn State under Joe Paterno was an institution that won the right way, right up until it was revealed that the school went to impossible lengths to cover up the molestation of a dozen children by former coach Jerry Sandusky. From South Bend to State College to Steubenville, misplaced priorities and win-at-all-costs mentalities have left women and children vulnerable to sexual assault and, worse, have made victims feel that reporting those assaults will lead not to justice but to character assassination and harassment. But misplaced priorities aren’t only to blame. So to is blind reverence and deference to the “right way” mentality, the idea that certain institutions are above it all. As Seeberg’s case points out, focusing solely on the balance of academics and athletics is an incredibly shallow view of what constitutes the “right way” to build a winning football program at a top-tier academic institution.

Read more

LGBT

French Government Urges Catholic Schools To Stay Neutral On Same-Sex Marriage

By Zack Ford on Jan 7, 2013 at 4:04 pm

French Education Minister Vincent Peillon and President François Hollande

French Education Minister Vincent Peillon recently sent a letter to the nation’s 8,300 Catholic schools, urging them to remain neutral on the question of same-sex marriage as the government begins to advance equality legislation. Peillon noted that the Catholic school system, which serves about a fifth of France’s children, is state contracted, and that seizing an opportunity to preach the Church’s anti-gay beliefs could be very harmful to children:

It doesn’t seem appropriate to bring the debate over equal marriage rights into schools. I have the deepest respect for the Catholic school system. But, the institution, which is under contract with the state, must respect the principle that everyone has the right to a neutral and free thought… We must never forget that we are dealing with young people and that attempted suicides are five times higher among teenagers who realize they are homosexual than others.

Over the weekend, President François Hollande defended Peillon’s letter, pointing out that pupils in the nation’s Catholic schools are no less entitled to free thought:

HOLLANDE: Secularism is a Republican value. We have to make sure that all ways of thinking are respected and that all religions can be practiced. But, we also have to [respect] the fact that we all live in the same place, and that the state, as well as both private and public educational institutions, adheres to a principle called neutrality.

Peillon’s critics allege he’s creating different standards for public and private schools and defaming Catholic schools. Nevertheless, the Catholic leadership in France and even Pope Benedict himself have urged followers to oppose the marriage equality and same-sex adoption initiatives. A poll conducted last week found that 69 percent of French people would like the opportunity to vote on same-sex marriage, but a December poll showed that 62 percent support marriage equality.

Climate Progress

How U.S. Biofuel Policy Is Destroying Guatemala’s Food Supply

By Jeff Spross on Jan 7, 2013 at 4:04 pm

A new report in The New York Times highlights how biofuel policy in the United States and Europe has produced a rolling food catastrophe in Guatemala.

The country once enjoyed a nearly self-sufficient level of corn production, but domestic producers were undercut by American corn exports subsidized by U.S. agricultural policy. Guatemala’s domestic corn supplies dropped nearly 30 percent per capita between 1995 and 2005.

In 2007, the United States established its expanded biofuel standards, and began relying on corn to meet them. That drove up demand, and the flow of cheap corn into Guatemala dried up. Meanwhile, larger farms and industrial producers took up much of Guatemala’s available cropland and water supplies to produce sugar cane, vegetable oil, and other crops to meet increased global demand for biofuel, due to European as well as U.S. policies.

The result left subsistence farmers with less and less land to work, and the average Guatemalan — whose diet is heavily corn-based — with no where else to turn for affordable food:

In a country where most families must spend about two thirds of their income on food, “the average Guatemalan is now hungrier because of biofuel development,” said Katja Winkler, a researcher at Idear, a Guatemalan nonprofit organization that studies rural issues. Roughly 50 percent of the nation’s children are chronically malnourished, the fourth-highest rate in the world, according to the United Nations. […]

But many worry that Guatemala’s poor are already suffering from the diversion of food to fuel. “There are pros and cons to biofuel, but not here,” said Misael Gonzáles of C.U.C., a labor union for Guatemala’s farmers. “These people don’t have enough to eat. They need food. They need land. They can’t eat biofuel, and they don’t drive cars.”

In 2011, corn prices would have been 17 percent lower if the United States did not subsidize and give incentives for biofuel production with its renewable fuel policies, according to an analysis by Bruce A. Babcock, an agricultural economist at Iowa State University. The World Bank has suggested that biofuel mandates in the developed world should be adjusted when food is short or prices are inordinately high. […]

In part because [the United Nations World Food Program in Guatemala's] primary food supplement is a mix of corn and soy, it cannot afford to help all of the Guatemalan children in need, Mr. Gauvreau said; it is agency policy to buy corn locally, but there is no extra corn grown here anymore. And Guatemalans cannot go back to the land because so much of it is being devoted to growing crops for biofuel. (Almost no biofuel is used domestically.)

In short, Guatemala is a microcosm for the damage Western food-based biofuels are doing to food supplies for the global poor. The United States is currently on track to devote nearly 40 percent of its own corn crop, and 15 percent of the world’s corn supplies, to biofuels. By 2020, European standards will mandate that transportation fuels contain 10 percent biofuels. (Although the European Commission “recently proposed amending its policy so that only half of its 2020 target could be met by using biofuels made from food crops or those grown on land previously devoted to food crops,” according to the New York Times.)

Most assessments of the 2008 food crisis found that biofuels played a role. Agricultural production is able to keep up with the world’s growing demand for food; however, the growing demand for biofuels make it more difficult to match that demand in years when weather is poor. As global warming continues to raise the odds of extreme weather, less reliable rain, and less reliable growing seasons, the potential to meet that demand diminishes.

At the same time, most studies have determined that because of the carbon emissions involved in biofuels’ agricultural production, their net effect on greenhouse gases is either negligible or negative. More advanced biofuels, such as the ones based on microalgae, could provide a solution, but they have not been fully commercialized. For the moment, we’re causing severe damage to the world’s food supply with no real benefit to the global warming problem.

NEWS FLASH

California Man Cites Corporate Personhood To Protest Carpool Lane Violation | A California driver who snuck into a carpool lane that requires two or more passengers in a vehicle claims he should not have to pay his ticket because “he had corporate incorporation papers in his car at the time and, he says, the state vehicle code views corporations as persons—therefore he and his corporation constituted a two-person carpool.” This is obviously an absurd legal argument, but, sadly no less absurd than the argument the Supreme Court’s conservative justices embraced in Citizens United.

LGBT

Rhode Island Coalition Of Religious Leaders Endorses Marriage Equality

By Zack Ford on Jan 7, 2013 at 3:20 pm

Rev. Gene Dyszlewski, chair of the Rhode Island Religious Coalition for Marriage Equality.

Though Catholic leaders continue to attack same-sex marriage in Rhode Island, a group of over 100 religious leaders from 13 different denominations throughout the state has come together to support equality. The interfaith group outlines the following tenets in their endorsement of the freedom to marry:

  • The most fundamental human need is the supportive love of other human beings, and that love is demonstrated in many ways.
  • The arc of God’s universe is toward justice, and we are called from out of our faith to pursue civil rights and fairness for all people.
  • The Divine, known by many names, does not ever side with expressions of hate or acts of discrimination.
  • The misuse of sacred texts or traditions to deny justice is wrong.
  • The freedom of religious belief and practice is paramount for a solid and healthy society.
  • The individuals entrusted with civic authority should not impose their personal religious beliefs, or any one interpretation of religious beliefs, on society as a whole, nor use them to deny rights to peoples.

Indeed, the support for equality from people of faith highlights how fraudulent the “religious freedom” argument used by its opponents truly is. While the Catholic Church and others will be free not to solemnize same-sex marriages after a law passes, until then faiths that do celebrate those unions are not able to do so with any legal binding. If anything, a “religious freedom” argument benefits the pro-equality clergy, whose alliance is essential to achieving social justice for all same-sex couples.

Economy

Why Democrats Are Right To Push For More Revenue In The Next Budget Deal

By Pat Garofalo on Jan 7, 2013 at 3:05 pm

Fresh off the deal to avert the so-called “fiscal cliff,” Congressional Democrats are gearing up for the next round of budget negotiations. House Minority Leader Nancy Pelosi (D-CA) said yesterday that the fiscal cliff deal was “not enough on the revenue side,” with the caucus seeming to settle on $1 trillion as a goal for increased revenue this year:

Democrats say they want to raise as much as $1 trillion in new revenues through tax reform later this year to balance Republican demands to slash mandatory spending.

Democratic leaders have had little time to craft a new position for their party since passing a tax deal Tuesday that will raise $620 billion in revenue over the next ten years.

The emerging consensus, however, is that the next installment of deficit reduction should reach $2 trillion and about half of it should come from higher taxes.

Congressional Republicans, meanwhile, are trying to portray the fiscal cliff deal as the final word on taxes. “The tax issue is behind us,” Senate Minority Leader Mitch McConnell (R-KY) pronounced yesterday.

However, budget deals cut over the last year have already cut a substantial amount of spending. In fact, even with the revenue included in the fiscal cliff deal, there have been $2.50 in spending cuts for every $1 in revenue signed into law by President Obama. That ratio increases to 3 to 1 when reduced interest payments on the debt are included.

As Bob Greenstein of the Center on Budget and Policy Priorities noted, following the GOP’s all-cuts plan going forward would blow that ratio up to 5 to 1:

If this Republican view holds, then when all of the deficit reduction efforts are tallied together, spending cuts will outpace revenue increases by nearly 5 to 1 — hardly a balanced approach. If future deficit reduction comes through an even split of revenues and spending cuts, total spending cuts will still outpace revenue increases by nearly 2 to 1. (These ratio estimates do not include the effects of interest savings; if those savings are included, the share of savings that come from spending cuts rises further.)

On its current path, revenue will not get close to where it was the last time the federal budget was balanced.

Health

After Forcing Women To Drop Their Doctors, Texas Gives Them A Faulty List Of Replacements

By Annie-Rose Strasser on Jan 7, 2013 at 3:00 pm

When Texas intentionally dismantled its women’s health program by refusing to fund Planned Parenthood — the largest women’s health group in the country — the state was essentially telling poor women they would need to find new doctors. Thousands of Texan women are now searching for a new provider, but the state is doing a predictably terrible job of helping them find one.

In fact, the list of doctors provided by the state is so flawed that it may make it harder, not easier, for women to seek care. Texas officials launched a new website to help women find new providers, but the Waco Tribune-Herald “found many of the doctors aren’t actually participating or won’t take new patients through the program.” And that was only one of the many problems they uncovered with the state’s list:

For example, Waco Cardiology Associates is included on the list. But an official at the heart doctors’ office said they obviously are not participants in the program. The program’s key services include contraceptives, cervical cancer screenings and sexually transmitted disease screening and treatment, none of which are offered at Waco Cardiology Associates.

The list generated by the state’s website also includes a handful of emergency medicine physicians from Waco’s two hospitals.

Although such doctors theoretically could handle family planning needs, neither hospital wants to encourage women to seek that type of care in an expensive emergency setting.

The list also includes a few physicians who either no longer work in Waco or who have changed specialties. For example, one physician who used to practice family medicine is on the list, even though she now only does wound care work.

Linda Edwards Gockel, a spokeswoman for the Texas Health and Human Services Commission, said the state will work to correct errors on the list.

This follows Texas’ officials generally ignorant line of thinking regarding women’s health. As Gov. Rick Perry (R) has championed defunding Planned Parenthood clinics, he’s suggested that women seek care at crisis pregnancy centers, right-wing anti-abortion organizations that don’t actually provide health services.

Unfortunately, the fact that many doctors’ offices are already too full with patients to take on additional women in the program was a predicted outcome. With Planned Parenthood not an option, and other clinics forced to close thanks to budget cuts to family planning services, providers in the state have taken on an estimated five times the number of their regular patient load.

NEWS FLASH

Hagel Gets Key Endorsements After Nomination | Soon after President Obama announced this afternoon that he nominated former Republican senator Chuck Hagel as the next Secretary of Defense, former Defense Secretary Robert Gates and former Secretary of State Gen. Colin Powell, both Republicans themselves, offered support for he move. “The country and our men and women in uniform would be well-served by his swift confirmation,” Gates said. “Chuck displays his courage in many ways,” Powell said in a statement.”You can always count on him to analyze a difficult situation and take a position that reflects his best judgment.” Hagel also received the support from two top Senate Democrats, Dianne Feinstein and Carl Levin. “Senator Hagel is well qualified to serve as secretary of defense with his broad experience in national security affairs,” Levin said in a statement.

Update

The Washington Post has a run down of where some Senators stand on Hagel’s confirmation.

LGBT

Emory University’s Thoughtful Response About Having Chick-fil-A On Campus

By Zack Ford on Jan 7, 2013 at 2:03 pm

Students and alumni at Emory University have been actively campaigning against the presence of a Chick-fil-A in the campus’s food court, protesting the anti-gay positions of company president Dan Cathy and the anti-gay donations made by the company’s foundation. A student committee for action formed in August with messages like, “Make Chicken, Not Judgments,” and in December, the Student Government Association approved a resolution opposing Chick-fil-A’s continued relationship with the university. Before the holiday break, Ajay Nair, Emory’s senior vice president for campus life, issued a statement with the university’s reflections after months of consideration of student concerns:

For several months, senior University administrators and other members of the community have deliberated and wrestled with the ethical points and principles related to the presence of Chick-fil-A at Emory University. Our principles and conclusions are:

  • Emory University has a long history of creating access, inclusion, and equity for Emory’s gay, lesbian, bisexual, transgender, and queer students, faculty, staff, and alumni. Public positions taken by Dan Cathy, President of Chick-fil-A, do not reflect these values of access, inclusion, and equity.
  • Another value of Emory University, however, is open expression. Dan Cathy has the right to express his views freely.
  • Members of the Emory community hold a variety of personal viewpoints about Dan Cathy’s public positions.
  • Chick-fil-A has become a symbol of exclusion for some community members.
  • Emory University will not ask Sodexo to exclude or retain Chick-fil-A on the basis of Dan Cathy’s public positions.
  • Members of the community are free to express their opposition to Dan Cathy’s public positions in numerous ways, including not patronizing Chick-fil-A.
  • To the best of our knowledge, Chick-fi-A does not engage in discriminatory practices against its customers or employees.
  • Any decision by Sodexo to renew or not renew the contract with Chick-fil-A, or any other vendor, must be part of a dining vision to advance the purposes for which Emory has contracted with Sodexo.
  • Opposing views must be acknowledged, recognizing that some differences are truly irreconcilable.

Emory has made it clear that it is not going to use Cathy’s positions or Chick-fil-A’s anti-gay giving to determine whether to maintain its contract, and yet this response spells out to students exactly how they can ensure Chick-fil-A does not return to campus in the future:

Typical brand selection and replacement considerations include, but are not limited to, preferential surveys, strategic planning processes, campus master planning, sales trends, contract requirements, and brand re-imaging. Nielsen customer preference surveys, conducted in 2008 and updated in the spring of 2012, revealed that global cuisine and flavors, health conscious offerings, and competitive market pricing are three key attributes students look for in dining options on this campus… Any brand changes in Emory Dining, which would being in the fall of 2013, will be consistent with this vision and the principles articulated above.

In other words, the university cannot fairly kick out the franchise on principle alone, but students can still have an impact on Chick-fil-A’s fate. By continuing to express displeasure and boycott, the campus community can potentially impact Chick-fil-A’s sales and ostracize it out of the master plan of Emory Dining. This sensible resolution does not directly punish the company for its anti-gay positions, but empowers the students to abandon its support, leaving little reason for the franchise to remain. It’s an important opportunity for democracy and the free market to defend progressive, inclusive values.

Older

Newer

Switch to Mobile
ThinkProgress Signup Overlay Skip and Continue to ThinkProgress Skip and Continue to ThinkProgress

Sign Up