In doing this, there are several benefits to utilizing cheap Chinese labor. By using Chinese factory labor, the Wal-Mart Corporation is able to provide goods at low prices, increasing their appeal to the consumer. Also, by using cheap labor in other countries, Wal-Mart expands their corporation worldwide, including opening stores in those countries where the company employs cheap, foreign labor. While there are a number of benefits to utilizing Chinese labor, there are numerous amounts of drawbacks.
Download image These job loss estimates are conservative because goods sold at Wal-Mart are primarily durable and nondurable consumer goods, such as furniture, apparel and textiles, toys, and sporting goods.
Job losses in manufacturing account for Jobs in the manufacturing sector pay higher wages and provide better benefits than most other industries, especially for workers with less than a college education. Manufacturing also employs a greater share of such workers than other sectors Scott The job displacement estimates in this study are conservative.
They include only the jobs directly or indirectly displaced by trade, and exclude jobs in domestic wholesale and retail trade or advertising; they also exclude re-spending employment.
Further, the labor-market effects of the U. Competition with low-wage workers from less-developed countries such as China has driven down wages for workers in U. The affected population includes essentially all workers with less than a four-year college degree—such workers make up roughly 70 percent of the workforce, or about million workers U.
The workers affected by this job displacement include millions whose jobs were not lost but whose wages were held down because of increased labor market competition with the job losers. As earlier EPI research has shown, trade with China between and displaced 2.
These indirect wage losses were nearly five times greater than the direct losses suffered by workers displaced by China trade, and the pool of affected workers was nearly 40 times larger million non-college-educated workers versus 2. Wal-Mart remains, by far, the top importer of ocean shipping containers in the United States with total imports of more thancontainer-equivalents TEUs inexceeding total imports by Target, the number two importer, by more thanTEUs In addition, about two-thirds of what Wal-Mart calls American-made goods are actually groceries, which support few U.
Continuing growth in that trade deficit and in Wal-Mart imports will likely displace many times more manufacturing jobs than Wal-Mart creates in the United States over the next decade.
Conclusion The growing goods trade deficit with China displaced 3. Due to its own growing trade deficit with China, Wal-Mart alone was responsible for the loss of more thanU. The current unbalanced U. The United States is piling up foreign debt, losing export capacity, and facing a more fragile macroeconomic environment.
Meanwhile, China has become dependent on the U.
It has also repressed the labor rights and wages of its workers, making its exports artificially cheap, further subsidizing its exports. About the author Robert E.
He joined EPI as an international economist in His areas of research include international economics and trade agreements and their impacts on working people in the United States and other countries, the economic impacts of foreign investment, and the macroeconomic effects of trade and capital flows.
He has a Ph.In fiscal year , Wal-Mart registered approximately $ billion in sales, which is $20 billion more than Austria's GDP.
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