Do not blame China for job losses in the US
By Guo Di (China Daily)
Updated: 2006-05-09 09:09
Statistics indicate that about 300,000
computer-programming jobs have so far been transferred from the United States to
India. And the tendency looks likely to continue.
At the same time, some
financial institutions on Wall Street, following the examples of the high-tech
companies, have also shifted some high-salary monetary analytical posts to
India.
US research firm ForrestResearch predicts that about 3.3
million US white-collar jobs in service industries will be transferred to
lower-wage countries, chiefly India, by 2018. This is bound to give rise to more
serious problems.
The situation is compounded by the fact that many
Americans find it difficult to adapt to new posts once the sectors where they
are working decline, owing to their inability to keep up with the changing
times, or to their low educational or training levels. Many employment
opportunities are therefore missed.
Job hunters have been subjected
to higher education requirements because the United States is shifting from a
manufacturing-orientated economy to a knowledge-based economy over the last
decade or so.
The figures released by the US Labour Department show that
the unemployment rate for those who received education below senior high was 6.5
per cent in November 2000 but rose to 9.2 per cent in January 2003.
Many
unemployed people with low education levels are unwilling or unable to learn new
skills, while keeping their job expectations high and hoping to get posts in
their old sectors with generous pay.
In the meantime, the US economy is
suffering, which drags down the US public's consumption confidence and their
consuming power as well.
This necessarily results in weak domestic
demand, and 70 per cent of the US economic growth is powered by demand.
Insufficient domestic demand makes it hard for the US economy to recover.
This, in turn, worsens the employment situation. Rising unemployment renders
consumption all the weaker. A vicious cycle is triggered.
Recent
statistics, however, suggest that the US economy shows signs of recovery. It is
believed that the employment situation will take a turn for the better if the
recovery maintains its momentum.
Taking all this into account, the blame
on China for robbing Americans of jobs is unfounded.
Some Americans see
only the transfer of funds, technology and employment opportunities to China but
turn a blind eye to the fact that good and cheap Chinese consumer goods lower
Americans' consumption costs. They also forget that the US-headquartered
multinational corporations are the biggest beneficiaries of the industrial
transfer.
They should realize that the unemployment problem is the
necessary consequence of economic globalization and that the problem signifies a
necessary phase through which the US economy is undergoing.
The author is
a Beijing-based economics researcher.
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