The other problem with these numbers is that by multiplying the quarterly numbers by four is deceptive, since it assumes that the same person is not losing jobs multiple times, but the reality is that the "churn" sector of jobs involve many workers who are continually moving between such temporary jobs. It's a reasonable bet that the 7 million jobs lost each quarter often involve less and possibly far less than 7 million people, so actual PEOPLE losing jobs is far less than numbers of jobs lost. It's a bit like the statistic that one out of two marriages end in divorce; that may be true but a far smaller percentage of people are ever divorced, since serial divorce participants make up a disproportionate share of divorces.
So it is far more likely than 2% that a person losing their job is losing it to overseas competition.
And then of course, the real effect of import competition is not necessarily job loss, but the threat of job loss. Most workers being rational and recognizing the threat accept lower and lower pay in such sectors in order to stem job loss. So even where jobs are not lost to import competition, its existence plays a very large role in wage loss.
-- Nathan
----- Original Message ----- From: "Doug Henwood" <dhenwood at panix.com> To: "lbo-talk" <lbo-talk at lbo-talk.org> Sent: Tuesday, March 30, 2004 2:57 PM Subject: [lbo-talk] trade & job loss
[Ok, so Ben Bernanke's a Republican and a governor of the Federal Reserve. But his numbers are hard to argue with.]
<http://www.federalreserve.gov/boarddocs/speeches/2004/20040330/>
To address the key area of public concern, I will focus here on the job-loss side of the equation. Estimates of the gross number of job losses associated with increased import penetration vary widely, but one representative calculation, by Lori Kletzer (2001), put the gross job loss due to imports at nearly 310,000 per year for the period from 1979 to 1999. I stress that Kletzer's estimate of gross job loss ignores any jobs created by trade, either directly or indirectly.
The amount of "churn" in the U.S. labor market is enormous, a reflection of the continuous stream of entry, exit, and resizing of firms in our ever-changing economy. In order to get some perspective on Kletzer's estimate of trade-induced job loss, then, we should compare it to the number of workers who are displaced each year in the United States for all reasons, including firm or plant closings, corporate restructuring, automation, or the ending of fixed-term employment. According to the Bureau of Labor Statistics (BLS), over the past ten years, gross job losses in the United States have averaged about 7.7 million jobs per quarter.4 Multiplying 7.7 million by four suggests that about 31 million U.S. jobs are eliminated each year. Research suggests, however, that because this number includes temporary layoffs, seasonal closings, and other job losses that are reversed within the year, it overstates longer-term job losses by about double (Davis, Haltiwanger, and Schuh, 1996). Hence, a reasonably conservative estimate is that, excluding seasonal and other short-term layoffs, about 15 million jobs are lost each year in the United States, equal to nearly 14 percent of the current level of nonfarm private employment. Of course, because net private-sector job creation in the United States over the past ten years has averaged more than 1.8 million per year, these losses were more than offset by the creation of about 17 million jobs per year during the same period. Truly, the U.S. labor market exhibits a phenomenal capacity for creative destruction.
Comparing the 310,000 or so gross job losses per year that Kletzer (2001) attributes to increased imports to the 15 million total job losses, we find that only slightly more than 2 percent of gross job losses are the result of import competition. In other words, for the typical job loser during the past ten years, the chances are 98 percent that some factor other than competition from imports was the principal reason for displacement. ___________________________________ http://mailman.lbo-talk.org/mailman/listinfo/lbo-talk