Friday, March 04, 2016

TPP And American Job Loss


Every incumbent and candidate running for Congress pays lip service to jobs, jobs, jobs. But many of them support trade policies that send jobs, jobs, jobs to low-wage, anti-labor union hell holes abroad. Last June, fast track authority for the TPP narrowly passed in Congress, 218-209. 190 Republicans and 28 Democrats voted for it. Blue America is backing candidates campaigning against TPP supporters in both parties, namely
Tim Canova vs Debbie Wasserman Schultz (FL-23)
Lou Vince vs Steve Knight (CA-25)
Alan Grayson vs DeSantis and David Jolly (FL-Sen)
Carol Shea-Porter vs Frank Guinta (NH-01)
Duwayne Gregory vs Peter King (NY-02)
Pat Murphy vs Rod Blum (IA-01)
Dave McTeague vs Kurt Schrader (OR-05)
Paul Clements vs Fred Upton (MI-06)
Yesterday the Economic Policy Institute released an extensive report on how transpartisan corporate trade policies have been toxic for American workers and how the looming dozen TPP-- being shoved down our throats by both parties' establishments-- could be the worst of all. One of the key points is that the dozen-country agreement will do nothing to restrict the kind of currency manipulation that has driven the deficit between the U.S. and the TPP partners, which translated to a loss of 2 million American jobs (over half in the manufacturing sector).
Currency manipulation acts like a subsidy to the exports of the manipulating country, and a tax on U.S. exports to every country where U.S. exports compete with the currency manipulator’s exports. In this way, currency manipulation increases U.S. imports, suppresses U.S. exports, and inflates U.S. trade deficits. As past EPI research has shown, currency-manipulation-fueled trade deficits have reduced U.S. gross domestic product (GDP), eliminated millions of U.S. jobs, driven down U.S. wages, and propelled the outsourcing of U.S. jobs to currency manipulators.

Many members of the proposed TPP, including Malaysia, Singapore, and Japan, are known currency manipulators. Others, namely Vietnam, appear to be following the lead of currency manipulators by, for example, acquiring excess foreign exchange reserves to depress the value of their currency. Currency manipulation explains a substantial share of the large, persistent U.S. trade deficit with the 11 other TPP countries that has not only cost millions of U.S. jobs but also increased income inequality and put downward pressure on American wages.

Many members of the proposed TPP, including Malaysia, Singapore, and Japan, are known currency manipulators. Others, namely Vietnam, appear to be following the lead of currency manipulators by, for example, acquiring excess foreign exchange reserves to depress the value of their currency. Currency manipulation explains a substantial share of the large, persistent U.S. trade deficit with the 11 other TPP countries that has not only cost millions of U.S. jobs but also increased income inequality and put downward pressure on American wages. We can’t afford a trade agreement that not only allows but would intensify these harmful trends:
The $177.9 billion U.S. goods trade deficit with the 11 other TPP countries reduced U.S. GDP by $284.6 billion (1.6 percent) and eliminated 2 million jobs in 2015.

The 2 million jobs lost due to the U.S. goods trade deficit with TPP member countries in 2015 included 418,900 direct jobs in commodity and manufacturing industries that competed with unfairly traded goods from TPP member countries.

The currency-manipulation-fueled trade deficit with TPP countries in 2015 was also responsible for the loss of 847,200 indirect jobs in supplier industries, and an additional 759,700 “respending” jobs. These lost respending jobs are jobs that-- in a U.S. economy still suffering from low demand-- would have been supported by the wages of workers who would have had jobs were trade with the TPP member countries balanced.

The U.S. trade deficit with TPP member countries in 2015 cost 1,057,200 manufacturing jobs (52.2 percent of the jobs lost due to the U.S. trade deficit with TPP member countries). Within manufacturing, by far the largest losses occurred in motor vehicles and parts, which lost 738,300 jobs (36.4 percent of total jobs lost). Other manufacturing industries with large losses include apparel (181,900 jobs lost or displaced, equal to 9 percent of total jobs lost) and computer and electronic parts (163,900 jobs, or 8.1 percent).

The U.S. trade deficit with TPP member countries was also responsible for significant job losses outside of manufacturing in 2015. Industries that lost jobs include health care and social assistance (204,200 jobs, 10.1 percent); retail trade (142,800 jobs, 7 percent); accommodation and food services (101,800 jobs, 5 percent); finance and insurance (42,700 jobs, 2.1 percent); agricultural industries (41,600 jobs, 2.1 percent), and education services (37,300 jobs, 1.8 percent).

Each of the 50 states and the District of Columbia lost jobs due to the U.S. trade deficit with TPP member countries in 2015. Net job losses were greatest in California, which lost 227,500 jobs (constituting 1.38 percent of total state employment). Michigan experienced the greatest jobs lost as a share of state employment (5.12 percent).

In the 10 hardest-hit states (jobs lost as a share of all state jobs), the share of jobs lost due to the U.S. trade deficit with the TPP countries in 2015 ranged from 1.83 percent to 5.12 percent of total state employment.

Seven of the 10 states with the highest job losses (as a share of total employment) are in the Midwest or Southeast, in states where manufacturing (especially of motor vehicles and parts) predominates: Michigan (214,600 jobs lost, equal to 5.12 percent)... In the 20 congressional districts with the largest shares of jobs lost, net losses ranged from 11,400 to 26,200 jobs, and jobs lost as a share of overall employment ranged from 3.89 percent to 7.66 percent. Michigan had 10 districts in the top 20 job-losing districts.
We asked Paul Clements, the progressive Democrat running for the southwest Michigan seat Fred Upton occupies how he and Upton differ on trade policies. The multimillionaire Republican, whose own family's business (Whirlpool) devastated the area's economy by moving its factories to other countries, has been one of Congress' most loud spoken advocates of off-shoring and outsourcing. He told us that "Poorly negotiated trade deals forced good paying American jobs overseas-- NAFTA alone has cost this country nearly 700,000 jobs.  These are good, family-sustaining jobs with benefits and pensions that boost the middle class, but they are sent abroad by the same people who fund Fred Upton's campaigns, then get richer themselves. The TPP is going to be bad for the average person in Michigan and bad for the country. That's why I would vote against it as a member of Congress."

As you can see from the maps below, southwest Michigan (and neighboring northern Indiana) are among the worst victims of the kind of currency manipulation that leads to job losses. Another 9,700 jobs were lost in Upton's district last year.

Another example of a progressive Democrat challenging a Republican who voted for this is Pat Murphy's race against corporate tool Rod Blum in northeast Iowa. Last year the district lost another 5,100 jobs to bad trade policies. Pat, the former Speaker of Iowa's state House of Representatives, told us that "Due to free trade we lost 750 jobs in Marshalltown 2 years ago, so I know the negative affects of these policies firsthand. We need to get rid of trade policies that export jobs  to low wage countries and lowering the quality of living for working class Americans. I am strongly against all Free-Trade proposals including the TPP. In Congress, unlike Congressman Blum, I will work to protect our workers and our jobs."

He has a primary against a corporate shill and "ex"-Republican the DCCC is pushing, Monica Vernon. She doesn't have a record on trade but she has a record of making contributions to the Republicans who voted for all the bad policies. I asked Pat about it and he knew just what I mean. "Throughout my life," he said, "I have worked to support candidates and causes that protect Iowa's working families, while my primary opponent, Monica Vernon has supported free-traders like Phil Gramm, Tom Latham and Republican candidates up and down the ballot."

When Fast Track Authority for the TPP came up in Congress last June, Peter King didn't join the 50 Republicans-- including New Yorkers John Katko, Chris Collins, Chris Gibson, Dan Donovan and Long Island's Lee Zeldin-- who stood up for their constituents instead of the special interests who were pushing another in a series of dysfunctional corporate trade pacts that have cost his own parts of Nassau and Suffolk counties thousands of jobs. "Congressman King’s votes last summer for Trade Promotion Authority jeopardized American jobs, plain and simple," said Suffolk County Legislature Presiding Officer DuWayne Gregory, who is challenging U.S. Rep. Peter King in New York’s 2nd Congressional District. "NAFTA cost New York more than 56,000 jobs, yet my opponent was willing to sacrifice Congress’s power to amend a trade deal whose signatories represent 40 percent of the world’s GDP. What does that mean for his constituents? It means Peter King simply can’t be trusted to protect Long Island jobs."

Up in New Hampshire, Carol Shea-Porter is well on the way to winning her seat back from Tea Party nut Frank Guinta, who never met a corporate trade policy he didn't love, despite the fact that another 3,400 people lost their jobs to these corporate trade policies last year alone. He was eager to vote for Fast Track and that puts him at odds with the working families of New Hampshire and with Carol. When we asked her a few hours ago, she told us that "As a member of the House Trade Working Group while serving in Congress, I worked on promoting fair trade policies. I support the export of goods and services, not jobs. I never voted for any trade agreement because they were never fair. Bad trade agreements hurt workers, they hurt Main Street businesses, and they hurt our economy."

Blue America was very excited to learn this week that Oregon progressives finally have a legitimate candidate to run against head Blue Dog and TPP booster Kurt Schrader! Dave McTeague, who served 10 years in the state legislature was inspired to jump into the congressional race by Bernie, who he has endorsed, just started campaigning. He told me last night that on February 16th he attended Schrader’s local town hall meeting where he indicated his support for the TPP "saying it was 'good on the labor side,' which is flatly contradicted by an AFL-CIO report recently issued. After I cited Public Citizen’s Trade Watch report concerning weak environmental  provisions, Mr. Schrader discounted the opposition, saying they were predisposed to oppose the TPP. Schrader's Blue Dogs provided the key votes for the Fast Track approval process, preventing Congress from making changes to the TPP that was negotiated in secret. The TPP raises alarming issues: giving power to multinationals to challenge labor and environmental laws in any TPP countries; biased three member tribunals deciding cases, no standing for workers or unions to bring disputes forward; opening up U.S. markets to goods made in countries with extremely poor labor standards and little to no rights to organize an independent trade union; and so much more. Somebody has to challenge this; which is why I've joined the political revolution that Sen. Sanders has called and decided to challenge Schrader  (a four term Blue Dog Democrat) in Oregon's 5th District Democratic primary."

The first time I spoke with Tim Canova, last year, he wanted to talk about the TPP and the fact that his congresswoman, Debbie Wasserman Schultz, was one of the paid-off Democrats who backs it. Tim called it "a gift to giant corporations that undermines both our national sovereignty and our constitutional framework. Its investor rights provisions would allow wealthy investors to challenge our national, state, and local laws as infringements on their anticipated future profits. These cases would not be decided in U.S. courts but by arbitration judges who regularly represent these same corporations in similar cases. This is exactly what’s been happening under similar provisions of the North American Free Trade Agreement (NAFTA). For instance, TransCanada, an energy giant, recently announced that it would sue the U.S. for $15 billion under these NAFTA provisions for President Obama’s decision not to move forward with the Keystone XL pipeline. TPP would expand these investor rights provisions to a dozen countries, thereby undermining laws intended to protect our public health and safety and the environment by shifting the costs of compliance from big corporations to taxpayers. Food labelling laws, such as labelling for genetically-modified organisms (GMOs), would be certainly be challenged, as would a host of measures intended to address climate change. The TPP would also undermine U.S. labor standards and speed up the outsourcing of American jobs to countries that do not respect the most basic human rights and labor rights of their own citizens. In addition, the TPP threatens to raise the price of prescription drugs and other medicines by giving big pharmaceutical corporations new monopoly rights to keep lower cost generic drugs off the market."

Please consider contributing to the campaigns of the progressives who are opposing TPP; you can find the ones endorsed by Blue America on this page.

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