Quality Magazine

High-Wage Jobs Moving to China

April 1, 2003
ITHICA, NY—At one time, most manufacturing jobs that left the United States for China were concentrated in relatively low-skill, low-wage jobs in light manufacturing industries, such as apparel and textiles. However, an increasing percentage of jobs that are now leaving this country for China are in industries producing goods such as bicycles, furniture, motors, compressors, generators, fiber optics, clocks, injection molded parts and computer components.

According to a report produced for the U.S.-China Security Review Commission, more than 760,000 U.S. manufacturing jobs have been lost to China since 1992. Most of those jobs were in eight industries: electronics and electrical equipment, chemicals and petroleum products, household goods, toys, textiles, plastics, sporting goods, and wood and paper products.

The report also found that U.S. companies that are shutting down their domestic operations and moving to China and other countries tend to be large, profitable, well-established companies, such as Mattel, International Paper, General Electric, Motorola and Rubbermaid.

“There is a myth out there that direct foreign investment into China is for production for the big Chinese market and that U.S. companies are just moving their low-paying jobs in toys and textiles to China,” says Kate Bronfenbrenner, Ph.D., a professor of industrial and labor relations at Cornell University and the report’s author. “But our data show that it’s not true at all. These are highly skilled and good-paying jobs...that are not serving the Chinese market. Companies are moving to China to serve the U.S. market in auto parts, electronics, high-tech components, electrical machinery, chemicals and sporting goods.” In fact, contrary to the expectation that China’s 1.2 billion population would provide an ever-expanding market for U.S. goods, the value of goods imported to this country from China in 2000 exceeded the value of U.S. goods exported to China by a factor of more than 6-to-1. This resulted in a bilateral trade deficit of $84 billion, the report says. And, the trade deficit with China comprises almost 20% of the total U.S. trade deficit.