My study was based on standard economic models of the effects of changes in trade flows on U.S. labor demand. As noted by my colleague Josh Bivens (http://www.epi.org/content.cfm/ib244 ), these models have become the “industry standard” used by nearly all serious analysts in the trade debates. Recent examples include studies by the Federal Reserve Bank of New York (http://www.newyorkfed.org/research/current_issues/ci11-8.pdf ) and Martin N. Baily and Robert Z. Lawrence (http://www.brookings.edu/press/Journals/2005/brookingspapersoneconomicactivity22004.aspx) in the Brookings Papers.

The model estimates the effects of the growing U.S. trade deficit with China on U.S. labor demand for a set of 201 U.S. industries. While other factors such as rising domestic demand or productivity growth have also affected manufacturing output and labor demand, this does not change the essential fact: the growing trade deficit reduces demand for U.S.-produced goods and, thus, for labor in traded-goods industries.

The large industrial base of Ohio’s economy has been decimated by growing trade deficits over the past decade. The state has lost 223,000 manufacturing jobs since March, 2001 alone, and 181,000 jobs overall. It is one of two states (the other is Michigan) where employment has declined since 1998. My report estimates that the growing trade deficit with China has displaced 102,700 jobs in Ohio, including 75,600 jobs in manufacturing. These losses have contributed to the decline of Ohio’s industrial base, and to the loss of high-wage jobs in service industries that support the manufacturing sector.

I encourage your readers to read my report (http://www.epi.org/content.cfm/bp219 ) and then form their own opinions. Mr. Nesbit’s handwaving about efficiency gains and wealth generation notwithstanding, the growing trade deficit with China has not brought more jobs to Ohio, and workers in the Buckeye state have suffered massive real wage losses as a result.

Rob Scott
Economic Policy Insitute

BLS data shows that Ohio has lost more than 243,800 manufacturing jobs since 2000. No doubt, unbalanced trade with China is a prime culprit for much of that job loss.

Rather than criticize the EPI report, why don’t you suggest how you’ll save American manufacturing jobs. Or, better yet, if you oppose “protectionism,” please be constructive and consistent in your rhetoric and state how you would address China’s blatant cheating and disegard for world trade law.

Since you live in Ohio, you undoubtedly have seen the closed factories and laid-off workers. I’m not sure I understand why you’re looking to defend policies that are costing us so many good-paying jobs as well as the very industrial base that has made us a strong, secure country.

-steven