North Carolina in the Global Economy. North Carolina in the World Economy I: Job Losses From Imports...
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Transcript of North Carolina in the Global Economy. North Carolina in the World Economy I: Job Losses From Imports...
North Carolina in the Global Economy
North Carolina in the World Economy I: Job Losses From Imports
• 1994--2002: 87,000 Manufacturing Jobs Disappeared in North Carolina.
• Sectors Most Heavily Hit: Low-Skill Manufacturing Industries (Apparel, Basic Assembly Operations in Furniture Industry).
• Textiles? About 23,000 Job Losses in North and South Carolina in 2001.
North Carolina in the World Economy II: Job Creation and Exports
• Exports from North Carolina to the World:– Increased by 87.7% Between 1993 and 2000– The 18th Largest increase Among All States
• Export-Related Jobs in North Carolina:– 132,900 Manufacturing Jobs Depend Upon Exports (17.2%
of All Manufacturing Jobs)– 285,600 Manufacturing Jobs in All Sectors Depend Upon
Exports– Another 152,700 Jobs Indirectly Supported by Exports (e.g.,
transportation, business services, wholesale and retail trade, other non-manufacturing activities)
– Total: 438,300 Jobs Supported by Exports.
Source: Job data from U.S. International Trade Administration. 2001. U.S. Jobs From Exports: A 1997 Benchmark Study of Employment Generated by Exports of Manufactured Goods. Export Growth from http://www.ita.doc.gov/.
North Carolina Export Markets, 2001
APEC41%
NAFTA28%
FORMER SOVIET REPUBLICS
1%
MIDDLE EAST1%
EUROPEAN UNION13%
ASEAN2%
CENTRAL AMERICA6%EAST EUROPE
1%
CARIBBEAN2%
OPEC1%
SOUTH AMERICA3%
SUBSAHARAN AFRICA1%
Source: International Trade Administration
Growth of Exports to North Carolina's Largest Foreign Markets, 1997-2001
-10
0
10
20
30
40
50
60
70
80
WORLD APEC CENTRAL AMERICA EUROPEAN UNION NAFTA
Pe
rce
nt
Ch
an
ge
Source: International Trade Administration
North Carolina Manufacturing Exports in 2001, By Sector
Apparel Manufactures13%
Chemical19%
Plastic/Rubber4%
Machinery11%
Computer/Electronics22%
Fabricated Metal3%
Leather0%
Misc3%
Furniture1%Transportation
6%
Appliances/Parts4%
Primary Metal3%
Wood Products1%
Processed Foods2%
Non-Apparel Textiles1%
Fabric Mill Products7%
Source: International Trade Administration
North Carolina Export Growth 1997-2001, By Sector
-40
-20
0
20
40
60
80
100
Fa
bri
c M
ill
Pro
du
cts
Pro
ce
ss
ed
Fo
od
s
No
n-A
pp
are
l T
ex
tile
s
Ap
pa
rel
Ma
nu
fac
ture
s
Le
ath
er
Wo
od
Pro
du
cts
Ch
em
ica
l
Pla
sti
c/R
ub
be
r
Pri
ma
ry M
eta
l
Fa
bri
ca
ted
Me
tal
Ma
ch
ine
ry
Co
mp
ute
r/E
lec
tro
nic
s
Ap
pli
an
ce
s/P
art
s
Tra
ns
po
rta
tio
n
Fu
rnit
ure
Mis
c
Pe
rce
nt
Ch
an
ge
Source: International Trade Administration
Export Jobs Pay Better Than Import-Competing Jobs
• On average, jobs in export sectors offer 13% to 20% higher wages than jobs in import-competing sectors.
Not Job Destruction
• The Story of Trade is Not One of Job Destruction– Some Jobs are Destroyed– Other Jobs are Created
• Story of Trade is One of Changes in the Kinds of Jobs Available in the Local Economy
• In the United States (and North Carolina), this Change is:– The Elimination of Low-Skill (and Low Wage) Jobs– The Creation of High-Skill (and High Wage) Jobs
Jobs by Sector in District 8, 1993
Construction7%
Furniture and Fixtures1%
Apparel6%
Textile Mill Products19%
Wholesale Trade3%
Food and Kindred Products2%
Lumber and Wood Products2%
Fabricated Metal Products1%
Retail Trade17%
Transportation Equipment1%
Transportation, Communication, and Utilities
3%
Finance, Insurance, and Real Estate
2%Rubber and Misc Plastics
1%
Industrial Machinery and Equipment
1%
Services13%
Government17%
Primary Metal Industries1%
Agriculture, Forestry, and Fishing
2%
Total Jobs: 157,471Source: NC Employment Security Commission
Total Jobs: 185,487
Source: NC Employment Security Commission
Jobs By Sector in District 8, 2000
Agriculture, Forestry, and Fishing
2%
Fabricated Metal Products1%
Furniture and Fixtures1%
Industrial Machinery and Equipment
1%
Transportation Equipment1%
Transportation, Communication, and Utilities
3%
Rubber and Misc Plastics2%
Construction9%
Government18%
Services18% Finance, Insurance, and
Real Estate2%
Primary Metal Industries1%
Wholesale Trade5%
Retail Trade19%
Apparel2%
Lumber and Wood Products2%
Textile Mill Products11%
Food and Kindred Products2%
Wages in the Declining and Growing Industries?
• Average Annual Wage in Declining Industries in District 8:– Apparel: $20,300
– Textiles: $25,300
• Average Annual Wage in Growing Industries in District 8– Industrial Machinery Industries: $32,500
– Transportation Equipment: $35,000
– Services: $22,879
Trade Adjustment in North Carolina, 1986-1992
Textiles Apparel Other Manufacturing
Percentage Re-employed 90.6 86.4 93.9
Average Duration of Unemployment (Months)
6 7 6
Ratio of New Wage to Old Wage
99 1.22 .90
Alfred J. Field and Edward M. Graham 1997. “Is There a Special Case for Import Protection for the Textile and Apparel Sectors Based on Labour Adjustment?” The World Economy 20 (March): 137-57.
In All of Manufacturing, 1990s• Fate of all NC Manufacturing workers who lost their
jobs during 1990s (regardless of reason)• 75 percent found new jobs paying 80 to 100 percent of
old wage within one year.• Patterns in Rapid Re-employment:
– Gender: No Pattern– Race: No Pattern– Age: Workers 55 or older had a harder time finding new jobs
than younger workers– Education: Workers with High School or Less Education had
lower re-employment rates than workers with more education.
Source: NC Employment Security Commission, Mass Layoffs in the North Carolina Economy.
North Carolina and NAFTAChange in North Carolina Exports to Mexico, 1997-2000
-100
-50
0
50
100
150
200
250
Man
ufact
uring
Proce
ssed
Foo
ds
Fabric
Mill
Pro
ducts
Non-Appar
el T
extil
e Pro
duct
s
Appare
l
Wood P
roduct
s
Paper
Pro
ducts
Printin
g and
Relat
ed P
rodu
cts
Chemic
al M
anufa
cture
s
Plast
ic a
nd R
ubber P
roduct
s
Compute
rs a
nd Ele
ctronic
s
Elect
rical
Equip
ment
Furnitu
re a
nd R
elat
ed
Mis
c Man
ufac
ture
s
Crops
Per
cen
t C
han
ge
Source: U.S. International Trade Administration Websitehttp://www.ita.doc.gov/
Labor Compensation: MNCs vs. Local Firms
(thousands of US dollars)
All Countries
High Income
Middle Income
Low Income
Average Wages Paid by MNC Affiliate
15.1 32.4 9.5 3.4
Average Wages Paid by Local Firms
9.9 22.6 5.4 1.7
Ratio 1.5 1.4 1.8 2.0
Labor Compensation By MNCs(thousands of US dollars)
High Income
Middle Income
Low Income
Ratio High/Low
All Industries 45.9 19.3 10.1 4.5
Petroleum 72.8 30.7 25.4 2.9
Manufacturing 45.0 14.1 4.9 9.2
Services 42.4 19.7 25.8 1.6Source: Edward Graham. 2000. Fighting the Wrong Enemy. Washington, D.C.: Institute for International Economics.
Mexico In PerspectiveMexico's Economy as a Percentage of the U.S. Economy
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
1991 1992 1993 1994 1995 1996 1997 1998 1999
Source: World Bank, World Development Indicators on CD-ROM, 2001
Mexico’s TradeMexican Exports
0
20,000,000,000
40,000,000,000
60,000,000,000
80,000,000,000
100,000,000,000
120,000,000,000
140,000,000,000
160,000,000,000
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
US
Do
llars
Source: World Bank, World Development Indicators on CD-ROM, 2001
Rising IncomesPer Capita Income, Mexico
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
US
do
llars
Debt Crisis
1994 Peso Crisis
Trade Liberalization Begins
NAFTA Period
Source: World Bank, World Development Indicators on CD-ROM, 2001
US Trade and US Trade With Mexico
0
20000
40000
60000
80000
100000
120000
140000
JAN 9
8
MAR 9
8
MAY 9
8
JUL 9
8
SEP 98
NOV 9
8
JAN 9
9
MAR 9
9
MAY 9
9
JUL 9
9
SEP 99
NOV 9
9
JAN 0
0
MARCH 0
0
MAY 0
0
JULY 0
0
SEPT 00
NOV 0
0
JAN 0
1
MARCH 0
1
MAY 0
1
JULY 0
1
SEPT 01
NOV 0
1
$US
Mill
ion
s
Exports to Mexico Imports From Mexico Total Exports Total Imports
U.S. Accounts For:80% of Mexico’s Exports74% of Mexico’s Imports
Source: U.S. International Trade Administration Websitehttp://www.ita.doc.gov/