For my essay I chose the podcast “Did China Eat Americas Jobs?”. The podcast breaks down the reasons why china’s manufacturing jobs and trading is superior to the United States and how that has affected Americas jobs. While listening to the podcast the two concepts that were talked about the most was concept of supply and demand and the concept of the unemployment rate. The first economic concept that was covered in the podcast was the concept of supply and demand. David Autor and Stephen J. Dubner explain how Americas has put itself into a situation of where we are relying too strongly on Chinas manufactures causing our manufactures at home to not be able to meet the demands to keep up with Chinas growing manufactures. Here’s how it took place.
America mainly exports goods that require workers to have high education and skills in order to make these products. Products like aircraft, vehicles, and machinery. On the other side of things America generally imports a lot of labor-intensive goods such as clothing, apparel, and pretty much anything that requires hands on labor to produce. By exporting the high-skilled goods were decreasing the demand for these products in America. Which is partly a good thing because we can produce these goods at a cheaper cost and sell them to other countries for a higher cost. But the alternative to that is that since America is has relied so heavily on the labor-intensive goods that are being imported from china the demand for labor-intensive goods has skyrocketed in America. America must now buy labor-intensive goods from other countries like china who dominate that market. This is a great illustration of the concept of supply and demand.
Now that we talked about how America got itself into this situation, let’s talk about the consequences that came from this situation. It is explained in the podcast that ever since China entered the World Trade Organization that it has put the biggest hurt on the jobs in the United States. Once China joined the World Trade Organization, they were able to grow and expand rapidly which put enormous strain on Americas manufacturing plants. They were able to achieve this because they could make and sell their labor-extensive products cheaper than the United States could. With China dominating the global manufacturing trade, it sent some of the manufactures in the United States into other countries where they produce the products cheaper or into bankruptcy. Normally when we saw this kind of thing happen, we see the workers of a failing manufacturing plant move to another plant since they are familiar with that industry, but this didn’t occur because all the manufactures in the same industry was going under. The only manufacturing jobs that were still thriving were the high-skilled labor jobs that required years of education. Therefore, we see Americas blue collar workers leave the manufacturing industry to find jobs in the fast-food industry, retailers or file for unemployment. This scenario perfectly illustrates the unemployment rate because the result of this situation raised the national unemployment rate which destroys the economy.
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After listening to this podcast, it really opened my eyes about how important it is to learn and know about economic concepts. I love how this podcast shows the effects of how when supply and demand doesn’t have balance it can lead to the collapse of an economy. Supply and demand are the backbone of our economy because most of the country’s money is made from trade. I also liked how the podcast lead to the effects of our supply and demand being off balance. In this case it led to unemployment which is also super important because our economy does work unless people are making and spending money. Although I see some improvements in our economy, I still feel like there is a lot more that can be done to improve. Maybe if more people knew about these concepts it would turn things around completely.
References
- Freakonomics Podcast: Did China Eat America’s Jobs?
- Economic Policy Institute: Manufacturing Job Loss — Trade, Not Productivity, Is the Culprit
- Council on Foreign Relations: US Trade Deficit—How Much Does It Matter?
- Bloomberg Opinion: The Scariest Trade Chart This Halloween
- Trading Economics: United States – Exports of manufactures, machinery, etc
