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More Job Outsourcing, More Income Inequality

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Negotiated in secret with hundreds of industry advisors, corporate-driven trade deals like the North American Free Trade Agreement (NAFTA) include protections for corporations to outsource American jobs, pushing down wages for everyone in the U.S. After the 2000 U.S. trade deal with China, millions of middle-class jobs were outsourced. The result is lower wages for all of us, not just manufacturing workers. Contrary to the theory of free trade, broad losses in income caused by our trade policies outweigh the gains consumers get from cheaper imported products.

Today’s “trade” agreements include investor protections that eliminate many of the usual risks that make firms think twice about moving to low-wage countries.

These incentives to outsource jobs have contributed to the net loss of nearly 50,000 American manufacturing facilities and nearly 4.5 million U.S. manufacturing jobs – one out of every four – during the era of corporate-rigged international trade and investment deals.

The U.S. Department of Labor lists more than 3 million workers as specifically losing their jobs to outsourcing and competition from imported goods – and that is under just one narrow program that excludes many people whose job loss is trade-related.

Studies estimate that the U.S. economy could have supported millions more manufacturing jobs if not for our massive, persistent trade deficits. When trade agreements include incentives to offshore jobs, U.S. firms shift production to low wage countries and then goods with U.S. brand names are imported back for sale here, exploding our trade deficit. Effectively, the trade deficit is a measure of how much more we buy from other countries versus sell to other countries.

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