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North Carolina in the Global Economy. North Carolina in the World Economy I: Job Losses From Imports 1994--2002: 87,000 Manufacturing Jobs Disappeared.

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Presentation on theme: "North Carolina in the Global Economy. North Carolina in the World Economy I: Job Losses From Imports 1994--2002: 87,000 Manufacturing Jobs Disappeared."— Presentation transcript:

1 North Carolina in the Global Economy

2 North Carolina in the World Economy I: Job Losses From Imports 1994--2002: 87,000 Manufacturing Jobs Disappeared in North Carolina. Sectors Most Heavily Hit: Low-Skill Manufacturing Industries (Apparel, Basic Assembly Operations in Furniture Industry). Textiles? About 23,000 Job Losses in North and South Carolina in 2001.

3 North Carolina in the World Economy II: Job Creation and Exports Exports from North Carolina to the World: –Increased by 87.7% Between 1993 and 2000 –The 18 th Largest increase Among All States Export-Related Jobs in North Carolina: –132,900 Manufacturing Jobs Depend Upon Exports (17.2% of All Manufacturing Jobs) –285,600 Manufacturing Jobs in All Sectors Depend Upon Exports –Another 152,700 Jobs Indirectly Supported by Exports (e.g., transportation, business services, wholesale and retail trade, other non-manufacturing activities) –Total: 438,300 Jobs Supported by Exports. Source: Job data from U.S. International Trade Administration. 2001. U.S. Jobs From Exports: A 1997 Benchmark Study of Employment Generated by Exports of Manufactured Goods. Export Growth from http://www.ita.doc.gov/.

4 Source: International Trade Administration

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8 Export Jobs Pay Better Than Import-Competing Jobs On average, jobs in export sectors offer 13% to 20% higher wages than jobs in import-competing sectors.

9 Not Job Destruction The Story of Trade is Not One of Job Destruction –Some Jobs are Destroyed –Other Jobs are Created Story of Trade is One of Changes in the Kinds of Jobs Available in the Local Economy In the United States (and North Carolina), this Change is: –The Elimination of Low-Skill (and Low Wage) Jobs –The Creation of High-Skill (and High Wage) Jobs

10 Total Jobs: 157,471 Source: NC Employment Security Commission

11 Total Jobs: 185,487 Source: NC Employment Security Commission

12 Wages in the Declining and Growing Industries? Average Annual Wage in Declining Industries in District 8: –Apparel: $20,300 –Textiles: $25,300 Average Annual Wage in Growing Industries in District 8 –Industrial Machinery Industries: $32,500 –Transportation Equipment: $35,000 –Services: $22,879

13 Trade Adjustment in North Carolina, 1986-1992 TextilesApparelOther Manufacturing Percentage Re-employed90.686.493.9 Average Duration of Unemployment (Months) 676 Ratio of New Wage to Old Wage 991.22.90 Alfred J. Field and Edward M. Graham 1997. “Is There a Special Case for Import Protection for the Textile and Apparel Sectors Based on Labour Adjustment?” The World Economy 20 (March): 137-57.

14 In All of Manufacturing, 1990s Fate of all NC Manufacturing workers who lost their jobs during 1990s (regardless of reason) 75 percent found new jobs paying 80 to 100 percent of old wage within one year. Patterns in Rapid Re-employment: –Gender: No Pattern –Race: No Pattern –Age: Workers 55 or older had a harder time finding new jobs than younger workers –Education: Workers with High School or Less Education had lower re-employment rates than workers with more education. Source: NC Employment Security Commission, Mass Layoffs in the North Carolina Economy.

15 North Carolina and NAFTA Source: U.S. International Trade Administration Website http://www.ita.doc.gov/

16 Labor Compensation: MNCs vs. Local Firms (thousands of US dollars) All Countries High Income Middle Income Low Income Average Wages Paid by MNC Affiliate 15.132.49.53.4 Average Wages Paid by Local Firms 9.922.65.41.7 Ratio1.51.41.82.0

17 Labor Compensation By MNCs (thousands of US dollars) High Income Middle Income Low Income Ratio High/Low All Industries45.919.310.14.5 Petroleum72.830.725.42.9 Manufacturing45.014.14.99.2 Services42.419.725.81.6 Source: Edward Graham. 2000. Fighting the Wrong Enemy. Washington, D.C.: Institute for International Economics.

18 Mexico In Perspective Source: World Bank, World Development Indicators on CD-ROM, 2001

19 Mexico’s Trade Source: World Bank, World Development Indicators on CD-ROM, 2001

20 Rising Incomes Source: World Bank, World Development Indicators on CD-ROM, 2001

21 U.S. Accounts For: 80% of Mexico’s Exports 74% of Mexico’s Imports Source: U.S. International Trade Administration Website http://www.ita.doc.gov/

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