Even its strongest critics admit that globalization has led to a variety of inexpensive goods being available for American consumers over the past few decades. However, the “benefits” politicians promised to U.S. workers from globalization, in particular, during the negotiations for China to become a member of the World Trade Organization in 2001, have turned out to be among the biggest lies of the 21st century, many believe. In fact, according to a December 9th report from the Economic Policy Institute, Chinese imports from Walmart alone have led to the loss of 400,000 American jobs over a 12 year period.

Walmart

Wal-Mart’s pivot to China after 2001 huge boon for Walmart and disaster for U.S. workers

The EPI report highlights that the total U.S. goods trade deficit with China hit a stunning $324.2 billion in 2013. According to a study by academics Kimball and Scott (2014), this huge deficit resulted in the loss  or displacement 3.2 million U.S. jobs. Related to this, retail industry titan Walmart is one of the largest sources of Chinese imports into the American market. This new EPI study updates earlier work from Scott (2007) to produce a conservative estimate of how many jobs have been displaced/lost due Chinese imports entering the country through Walmart:

The data show that the Walmart trade deficit cost 125,800 jobs in 2001 and 541,300 jobs in 2013. This makes Walmart was responsible for the loss/displacement least another 415,400 U.S. jobs in the 12 years from 2001 and 2013.

Walmart

The new research also shows that:

Imports from China entering the country through Walmart in 2013 came to around $49.1 billion, and the combined effect of imports from and exports to China conducted through Walmart represented close to 15.3% of the growth of the total U.S. goods trade deficit with China in the 12 years from 2001 and 2013.

The Walmart-created trade deficit with China by itself led to the displacement or loss of 400,000 U.S. jobs between 2001 and 2013.

Not surprisingly, the American manufacturing sector and its workers have been hammered by Walmart’s gigantic imports from China. Walmart’s increased trade deficit with China between 2001 and 2013 eliminated 414,500 manufacturing jobs, 75.7 percent of the jobs lost from Walmart’s trade deficit. These job losses are particularly destructive because jobs in the manufacturing sector pay higher wages and provide better benefits than most other industries, especially for workers with less than a college education.

Walmart has announced plans to create opportunities for American manufacturing by “investing in American jobs.” To date, very few actual U.S. jobs have been created by this program, and since 2001, the growing Walmart trade deficit with China has displaced more than 100 U.S. jobs for every actual or promised job created through this program.

China has achieved its rapidly growing trade surpluses by manipulating its currency: it invests hundreds of billions of dollars per year in U.S. Treasury bills, other government securities, and private foreign assets to bid up the value of the dollar and other currencies and thereby lower the cost of its exports to the United States and other countries. China has also repressed the labor rights of its workers and suppressed their wages, making its products artificially cheap and further subsidizing its exports. Walmart has aided China’s abuse of labor rights and its violations of internationally recognized norms of fair trade by providing a vast and ever-expanding conduit for the distribution of artificially cheap and subsidized Chinese exports to the United States.