Public Citizen and EPI on Trade and Employment
Bryan Riley /
Reports from the Economic Policy Institute (EPI) are being misrepresented by leftist organizations like the AFL-CIO and the Alliance for American Manufacturing. The purpose of these misrepresentations? To create a false and misleading picture of the relationship between international trade and employment. Close examination reveals that trade deficits are not to blame for the high level of unemployment in the United States.
EPI has released several studies on job displacement triggered by international trade. Job displacement consists of a person moving from one job to another, and is not to be confused with job loss. For example, 10,000 people leaving their jobs as burger-flippers to become surgeons or engineers would be reported by EPI as 10,000 displaced U.S. jobs.
EPI clearly states that its research on job displacement due to the trade deficit does not show net job losses: “[E]stimates of jobs displaced by growing trade deficits are not a declaration of exactly how many more jobs the economy would have today if these deficits had not grown.” (Emphasis in the original.)
Trade deficits do not drain dollars from the U.S. economy, as EPI explains: “As the trade deficit grows, dollars piled up by our trading partners come back to the U.S. economy, and this increases the supply of funds available for U.S. business and households to borrow.”
Public Citizen agrees that imports do not reduce U.S. employment: “Trade affects the composition of jobs, not the total number.” EPI researchers should be quite upset at the misuse of their job-displacement studies to suggest otherwise.