A policy paper released in 2011 by the Economic Policy Institute estimated that growth in the U.S. goods-trade deficit with China was associated with the displacement of about 2.8 million U.S. jobs between 2001 and 2010. China entered the World Trade Organization in 2001, which marked the starting point used in the analysis.
The study reported effects across all 50 states, the District of Columbia and Puerto Rico. It estimated that the bilateral goods deficit rose from roughly $84 billion in 2001 to about $278 billion in 2010. Texas and California were assigned some of the largest totals, at approximately 232,000 and 451,000 displaced jobs respectively, with manufacturing carrying much of the estimated effect.
What the paper estimated
- About 2.8 million jobs were displaced nationally over the 2001–2010 period.
- Computer and electronic products accounted for an estimated 909,400 displaced jobs.
- Apparel, fabricated metals, textiles, plastics, vehicle production and other manufacturing industries also registered estimated losses.
- Indirect effects were assigned to service sectors including administrative support and professional, scientific and technical services.
Industry estimates in the historical model
The paper linked 44% of the $194 billion increase in the bilateral deficit over the period to imports of computers, semiconductors, electronic components and related equipment. It also highlighted a 2010 U.S. deficit of roughly $94.2 billion in advanced-technology products with China.
| Industry | Estimated displaced jobs |
|---|---|
| Computer and electronic products | 909,400 |
| Administrative, support and waste management services | 204,300 |
| Apparel and accessories | 178,700 |
| Professional, scientific and technical services | 173,100 |
| Fabricated metal products | 123,900 |
| Miscellaneous manufactured goods | 119,700 |
| Textile fabrics and products | 92,300 |
| Plastic and rubber products | 62,000 |
| Motor vehicles and parts | 49,300 |
The report also distributed its estimates by congressional district. It placed five of the most affected districts in California and calculated that the state's 15th District, then including parts of Silicon Valley, had an estimated displacement equivalent to 12% of district employment. That comparison used boundaries and labor-market information from the time.
Currency policy was central to the argument
The author argued that China's management of the yuan kept Chinese exports cheaper relative to U.S. goods. The paper described purchases of dollars and other reserve assets as a mechanism for limiting currency appreciation and estimated an effective currency subsidy of roughly 28.5% during the period studied.
Its discussion cited approximately $450 billion in Chinese purchases of U.S. Treasury securities and other assets between December 2009 and December 2010. It also described total foreign-exchange reserves of around $3.2 trillion at the time, with dollar-denominated assets representing a large share.
How to interpret “jobs lost”
The headline number is an economic-model estimate. It compares employment supported by exports with employment displaced by imports and attributes the difference to changes in the trade balance. It does not identify 2.8 million named workers who were individually laid off because of one policy.
Readers evaluating this kind of claim should inspect the period selected, the definition of the trade deficit, industry employment multipliers, treatment of supply chains and whether the result measures gross displacement or net economy-wide employment. Other forces—including automation, domestic demand, exchange rates and trade with additional countries—can affect employment over the same period.
At the time, a manufacturing advocacy coalition used the report to call for executive and congressional action on currency and trade enforcement. That response represented an advocacy position attached to the paper's release, not an independent confirmation of its model.
What remains useful
The study offers a historical account of how one research organization translated trade flows into state, district and industry employment estimates. Its most durable value is methodological: it gives readers a concrete example of why large economic claims should be traced back to their date range, assumptions and underlying data before being repeated as present-day facts.
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