Growing trade deficits have cost U.S. workers millions of jobs over the past two decades, most of them good jobs in manufacturing industries. Currency manipulation by more than 20 countries, of which China is by far the largest, is the single most important cause of large U.S. trade deficits. Currency manipulation lowers the value of foreign currencies, relative to the dollar, which acts like a subsidy to their exports, and a tax on U.S. exports to China and to every other country where the U.S. competes with the exports of currency manipulators.
Ending currency manipulation would create jobs in every state, as shown in the map below. Nine of the top 10 states that would gain the most jobs (as a share of total employment) are in the Midwest. This includes six heavy manufacturing states: Wisconsin, Indiana, Iowa, Minnesota, Michigan, and Ohio. Other states in the top ten are South Dakota, Kansas, Nebraska and Idaho.
In an era of fiscal austerity, ending global currency manipulation is the best way to reduce trade deficits, create jobs, and rebuild the U.S. economy, as shown in Stop Currency Manipulation and Create Millions of Jobs. Eliminating currency manipulation would reduce U.S. trade deficit by between $200 billion and $500 billion in three years. This would increase annual U.S. GDP by between $288 billion and $720 billion and create 2.3 million to 5.8 million jobs. About 40 percent of the jobs gained would be in manufacturing.
Jobs created as a share of state employment from ending currency manipulation, 2015*
|State||Jobs created as share of state employment|
|District of Columbia||2.64%|
**10 least-impacted states, plus D.C.
***10 next-least impacted states
****10 middle-impacted states
*****10 next-most impacted states
******10 most-impacted states
*The map shows estimates of the effects of ending currency manipulation over three years, modeled as having begun in 2013. The map shows the results in the high-impact scenario, which assumes that ending currency manipulation would reduce the trade deficit by $500 billion in 2015 relative to the trade deficit in 2012. The number of jobs gained (or lost) is relative to 2011 employment.
Source: Author's analysis of U.S. International Trade Commission (2013), Bureau of Labor Statistics (2013d), and Bureau of Labor Statistics Employment Projections program (BLS-EP 2011a and 2011b). For a more detailed explanation of data sources and computations, see Stop Currency Manipulation and Create Millions of Jobs.