10 States Losing the Most Jobs to China


Debate over how many jobs the United States loses to China has gone on for years. Today, China is one of the two largest manufacturing economies in the world. The other is the United States Many labor groups and politicians are at work trying to tip factory activity back to the U.S. — a difficult task to accomplish when companies send work to China to bring labor costs down. So, in many cases, China cannot be blamed for the shift in workers.

This story was originally published by 24/7 Wall St.

In a recent study, the Economic Policy Institute (EPI) analyzed American jobs lost to China between 2001 and 2011. During that time, “the trade deficit with China eliminated or displaced more than 2.7 million U.S. jobs, over 2.1 million of which were in manufacturing,” according to the report. Based on the study, 24/7 Wall St. identified the 10 states that experienced the most job loss as a result of the deficit between 2001 and 2011.

Some industries were affected more than others. Between 2001 and 2011, the U.S. trade deficit with China grew $217.5 billion, with U.S. imports of computer and electronic parts, including computer, semiconductors and audio-video equipment, making up 55% of the total. Of the 2.1 million manufacturing jobs lost, more than 1 million were from the computer and electronic products category.

As a result, many of the states that lost the most jobs have congressional districts with high concentrations of technology jobs. According to the report, states like California and Texas have congressional districts with heavy focus on tech. Four of the five congressional districts with the highest proportional decline — California’s 13th, 14th, 15th and 16th — are in the tech-heavy San Francisco Bay area. The other is Texas’s 31st district, which forms part of Austin, also home to many of the nation’s largest technology companies.

Districts in some states, including Georgia and Alabama, “were especially hard-hit by job displacement in a variety of manufacturing industries, including computers and electronic products, textiles and apparel, and furniture,” according to EPI. Out of the country’s 435 congressional districts, Georgia’s 9th district is among the top 25 for job loss. The district includes the city of Dalton, which is home to manufacturers, including many prominent upholstery corporations.

Despite the talk of a manufacturing resurgence, Robert Scott, the author of the EPI study, calls this “hot air.” He notes that 50,000 manufacturing facilities have been closed since 2001 with very few coming back anytime soon. He suggests the only way to do get a manufacturing resurgence off the ground is for the federal government to crack down on China’s currency manipulation and to get American companies to truly invest in manufacturing. “There is a lack of willingness to put that in place,” Scott said. “Standing by and hoping manufacturing is going to get better isn’t going to work.”

24/7 Wall St. identified the states losing the most jobs to China based on EPI’s report, “The China Toll.” In order to reflect how much the trade deficit has affected state and local economies, we considered states that lost the most jobs relative to the population. On this basis, small states like New Hampshire and Vermont have been just as hurt when worker migration is compared to total jobs in each state. 24/7 Wall St. also reviewed the level of export activity and job losses in the 50 states and 435 congressional districts relative to the number of people employed by state. The relative growth rate of gross domestic product for each state for 2011 and between 2008 and 2011 is based on data from the EPI report. The July 2012 unemployment rate by state is from the Bureau of Labor Statistics.

What emerges from these figures is that the shift of jobs to China does not spare any state based on its unemployment rate or GDP growth. Nor does it spare any single industry or sector, from technology to shoe making. China’s ability to take jobs from the U.S. stretches across nearly every aspect of the American economy.

These are the 10 states losing the most jobs to China.

10. Texas > Pct. jobs lost: 2.26% > Unemployment rate: 7.2% (19th lowest) > GDP growth: 3.3% (4th highest)

Of the 20 U.S. congressional districts that lost the most jobs to China, four were based in Texas. Three of those four congressional districts — the 10th, 25th and 31st — are in the Austin area. The area is known for its robust technology sector with large employers including Dell Inc. (NASDAQ: DELL), Applied Materials Inc. (NASDAQ: AMAT) and 3M Co. (NYSE: MMM). Between 2001 and 2011, 66,200 jobs from these districts were lost. Fortunately, Texas’s economy is faring better than most states in the U.S. Its unemployment rate in July was more than a percentage point lower than the national rate of 8.3%. And Austin’s 6.4% unemployment rate as of June, which improved from 7.3% in 2011, was even better than Texas as a whole. GDP growth in 2011 was higher than all states but three. Texas GDP growth of $72.8 billion between 2008 and 2011 was the highest of any state.

9. Colorado > Pct. jobs lost: 2.38% > Unemployment rate: 8.3% (20th highest) > GDP growth: 1.9% (14th highest)

Colorado’s 4th congressional district has been hit harder by job loss than any of the state’s other districts. The district has lost 13,800 jobs to China in a 10-year period, which is 3.91% of the current district employment of 352,500. The 4th congressional district’s largest city is Fort Collins, where notable employers include technology companies such Hewlett-Packard Co. (NYSE: HPQ) and Advanced Micro Devices Inc. (NYSE: AMD). Computers and electronics was the top export to China in 2011, totaling $154 million. The state’s unemployment rate of 8.3% was in line with the federal rate. Between 2008 and 2011, the state’s GDP rose by $3.3 billion, or 1.44%.

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8. Vermont > Pct. jobs lost: 2.43% > Unemployment rate: 5% (5th lowest) > GDP growth: 0.5% (15th lowest)

Vermont is known for its production of winter-wear. However, some companies have been choosing to move this traditional local production elsewhere. Companies that have moved plants to China from Vermont include Burton Snowboards and Tubbs Snowshoes. According to a 2010 EPI report, China’s fast-growing paper production in the past few years has put heavy pressure on Vermont’s paper production as well. The state’s GDP growth was only 0.5% in 2011, and only 0.86% between 2008 and 2011, essentially indicating stagnant economic activity. However, the unemployment rate of 5% was more than three points below the national rate and the fifth lowest in the country.

7. Idaho > Pct. jobs lost: 2.65% > Unemployment rate: 7.5% (25th highest) > GDP growth: 0.6% (18th lowest)

In the 1990s and early 2000s, Idaho’s technology sector boomed. By 2000, the state employed 28,300 in the sector, up 11,300 jobs from 1994. But becoming a technology state may have ensured that other jobs went to China, as 2.65% of state jobs were shipped to the People’s Republic between 2001 and 2011. The state has experienced nearly stagnant economic growth within the past three years, with GDP growing only 0.18% between 2008 and 2011. However, the state’s unemployment rate of 7.5% was significantly better than national rate of 8.3%. Idaho exported $278 million worth of computers and electronics to China in 2011, making it its largest export to the country in 2011, according to the U.S.-China Business Council. Between 2000 and 2011, exports to China from the state rose by 596%, while exports to the rest of the world rose by only 57%.

Also Read: America's 10 Disappearing Jobs

6. Minnesota > Pct. jobs lost: 2.66% > Unemployment rate: 5.8% (9th lowest) > GDP growth: 1.2% (21st highest)

As of 2010, manufacturing was Minnesota’s third-largest industry, with 292,031 positions, according to the Minnesota Department of Employment and Economic Development. The average wage for manufacturing jobs in 2010 was $56,328, or about 20% higher than the average Minnesota wage. Computer and electronic manufacturing comprises 16% of all manufacturing positions. China was Minnesota’s second-largest export market in 2011, with $1.9 billion in exports, according to the U.S.-China Business Council. Machinery exports totaled $544 million, making it the top export industry, followed by computers and electronics at $312 million. Even with some manufacturing jobs now overseas, Minnesota’s unemployment rate of 5.8% is the ninth lowest in the country and 2.5 percentage points below the national unemployment rate of 8.3%.

5. North Carolina > Pct. jobs lost: 2.67% > Unemployment rate: 9.6% (5th highest) > GDP growth: 1.8% (15th highest)

The congressional district hit the hardest in North Carolina was the 4th, where North Carolina’s Research Triangle is located. The Research Triangle has been an East Coast version of Silicon Valley, with many large technology employers having a major presence in the region. Another sizable business where jobs have moved from the United States to China was furniture manufacturing. According to research from Duke University, High Point, N.C. is the “Furniture Capital of the World,” but has been losing jobs to China since the 1990s.

4. Oregon > Pct. jobs lost: 2.85% > Unemployment rate: 8.7% (13th highest) > GDP growth: 4.7% (2nd highest)

Oregon’s 1st congressional district was hit the hardest by jobs moving to China. In 10 years, 21,100 jobs have been sent to China, which is 5.44% of the 388,100 people currently employed in the district. The district includes Beaverton, home to Nike Inc.’s (NYSE: NKE) headquarters. Nike has received substantial criticism over its outsourcing to China and its human rights record abroad. The good news for Oregon is that the economy is looking like it is making a turnaround. While the state’s unemployment was higher than the national rate, its GDP growth rate of 4.7% in 2011 was the second highest in the country that year. Between 2008 and 2011, GDP grew by 9.43%, which was higher than all but two states in the U.S.

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3. Massachusetts > Pct. jobs lost: 2.86% > Unemployment rate: 6.1% (12th lowest) > GDP growth: 2.2% (7th highest)

President Obama and his campaign surrogates have claimed that Romney was heavily responsible for jobs being shipped overseas while the GOP candidate was governor of Massachusetts between 2003 and 2007. Factcheck.org notes that jobs did in fact go overseas during Romney’s time in office; however, the rate of job loss during that time actually was less compared to the four years before and after he was in office.

Two congressional districts in Massachusetts were in the top 10 in the country for jobs lost. Massachusetts 5th congressional district shipped 17,200 jobs to China between 2001 and 2011, which amounts to 5.42% of the district’s current employment of 317,400. The largest city in the district is Lowell, known for its manufacturing base. Massachusetts 3rd district, which contains the state’s second-largest city of Worcester, has shipped 15,500 jobs overseas, which amounts to 4.80% of the current employment of 322,800 in the district.

2. California > Pct. jobs lost: 2.87% > Unemployment rate: 10.7% (3rd highest) > GDP growth: 2% (11th highest)

Four of the five congressional districts (of the 435 examined) with the most jobs lost are based in the bay area of California, home to many of America’s largest technology corporations. According to the San Francisco Chronicle, executives of California companies point to “strict environmental regulations and high taxes and labor costs” as barriers for bringing jobs back to the U.S. This comes at a time when the economy of America’s most populous state is struggling — the 10.7% unemployment rate in California was the third highest in the country in July. Between 2008 and 2011, California’s GDP has declined by $20.75 billion, far larger than any other state.

1. New Hampshire > Pct. jobs lost: 2.94% > Unemployment rate: 5.4% (7th lowest) > GDP growth: 1.5% (18th highest)

Growth in New Hampshire exports to China has grown at a whopping rate of 1,032% between 2000 and 2011, according to the U.S.-China Business Council. During the same time frame, exports to the rest of the world have grown by just 69%. Seems that some in New Hampshire have decided that making products in China would be more efficient than exporting — almost 3% of the state’s jobs between 2001 and 2011 have been moved there. Fortunately, New Hampshire’s economy was stronger than most state economies. The unemployment rate of 5.4%, which was the seventh lowest in the United States, was almost three percentage points lower than the national rate. Between 2008 and 2011, GDP has grown by 3.89%, which places New Hampshire in the top 10 states in terms of GDP growth.