Booming Trade Deficit Costs Pennsylvania 142,221 Jobs Since 1994

Harrisburg, October 22, 2002 – A new analysis by the Keystone Research Center (KRC) finds that Pennsylvania has lost 142,221 jobs since 1994 due to a ballooning trade deficit, including 106,412 manufacturing jobs. The hardest hit five Congressional Districts in the state have each lost between 8,250 and 10,000 jobs.

“Pennsylvania has been one of the states experiencing the most trade-related jobs losses in the 1990s. With more than 100,000 jobs lost in manufacturing alone, Pennsylvania ranks fifth in both manufacturing job loss and total job loss since 1994” said report author and KRC Policy Analyst David Bradley.

Keystone’s report, Trade and Pennsylvania, piggybacks on a study by the Economic Policy Institute (EPI) in Washington, D.C. While advocates of the status quo approach to trade often boast about rising exports but conveniently ignore job destruction due to imports, EPI takes into account job impacts of both exports and imports. In this way, EPI generates overall (or “net”) job loss numbers for each of 31 separate industries in Pennsylvania.

Using these statewide figures, and data on employment by industry in Pennsylvania’s 67 counties, KRC estimates job losses by county in the 31 industries. KRC then aggregates county figures into nine multi-county regions that include one or more Congressional Districts: Southeast (Congressional Districts 1, 2, 6, 7, 8, 13, 16), Central East (11, 15), Northeast (10), Capital Region (17), Southern Metropolitan (19), Southern Rural (9), Northwest Central (5), Northwest (3), and Southwest (4, 12, 14, 18).

In its report, KRC finds that:

• From 1994 to 2000, a rising trade deficit cost Pennsylvania an estimated 142,221 jobs, 2.9 percent of total 1994 employment in the state.

• In manufacturing, an estimated 106,142 Pennsylvania jobs disappeared from 1994 to 2000, more than one out of every nine manufacturing jobs.

• The estimated annual average wage of the manufacturing jobs that Pennsylvania lost equals $39,328. This is over $7,000 above the state’s average non-manufacturingwage, and up to three times the annual average wage in service industries in which many displaced workers would find re-employment.

• The hardest hit part of Pennsylvania was the Capital region encompassing the new 17th Congressional District, from which nearly 10,000 jobs vanished, including nearly 8,000 in manufacturing.

• The second hardest hit part of Pennsylvania was the Lehigh Valley spanning the 11th and 15th Congressional Districts, which each lost an estimated 9,325 jobs.

• Other hard-hit areas were Congressional Districts 10 (in the Northeast including Scranton), and 19 (including York, Adams, and part of Cumberland counties), each of which lost at least 8,281 jobs, including 6,766 in manufacturing.

Stephen Herzenberg, KRC economist and Executive Director, observed that “U.S. trade policy has operated based on the radical assumption that dramatic economic shifts – such as globalization, the transfer of high-productivity manufacturing to low-wage countries, and the telecommunications revolution – will automatically deliver broad-based benefits, without any deliberate effort of policymakers to ensure that result. Persistent poverty, negative impacts on workers, and environmental devastation now forces us to reject this extreme position. International trade needs a different framework of rules if it is to make our lives and planet better, not worse.”

KRC’s briefing paper was released in conjunction with a call by the United Pennsylvanians coalition (www.unitedpa.org) for Pennsylvania Congressional candidates to pledge themselves to a new U.S. trade policy approach. Reverend Charlie McNutt, former Episcopal Bishop in the Central Pennsylvania region spoke on behalf of UP, alongside William George, President of the PA. AFL-CIO, and John Hanger, President of Citizens for Pennsylvania’s Future (an energy and environmental group).

Bishop McNutt said that “the measure of our trade policy must be whether it serves the public good. Our current approach undercuts the U.S. middle class, leaves workers impoverished in many of our trading partners, and does nothing to protect the environment. We need a new approach.”

Keystone Research Center (www.keystoneresearch.org) is the leading independent source of analysis of Pennsylvania’s economy and public policy.


RELATED KRC PUBLICATIONS