U.S. News --- THE NUMBERS GUY: Flawed Math Seen in Unemployment Tied to China
Millions of jobs are the cost of doing business with China, according to dozens of members of Congress seeking re-election.</br></br>Representatives from both major parties signed a letter last month asking the House leadership to pressure China to allow its currency to appreciate against the dollar. The letter cited a think tank study finding that trade with China reduces U.S. employment by 2.4 million jobs.</br></br>But several economists say the estimate congressional members relied on vastly overstated trade's impact on employment. A major flaw, they say, was that the study assumed every dollar spent on Chinese goods displaces a dollar that would be spent on U.S.-made products, when in fact products made in other low-cost manufacturing nations might fill the void. Also, cheap imports might even help fuel the U.S. economy and spur employment.</br></br>Other economists offer lower estimates for job losses, while some say that despite the heated rhetoric of the currency debate, it simply isn't possible to connect employment to trade deficits.</br></br>The dispute has played out against the backdrop of the midterm elections, where many campaigns have blamed China for U.S. economic problems.