Americans have undoubtedly become more concerned about offshoring in recent years. And with good reason. Since 2000, U.S. manufacturing employment has declined by roughly 4.5 million jobs. And downsized factory workers often face a nearly 20 percent decline in wages when they finally find a new job.
A key problem of course is China. For years, Washington has failed to confront Beijing’s predatory trade practices—and U.S. jobs have continued to flow overseas. However, many Americans would be surprised to learn that several of the nation’s most venerable companies are now leading the offshoring charge.
According to a new analysis by our organization the Coalition for a Prosperous America (CPA), last year’s offshoring leaders included General Motors, Ford, and Verizon. We know this thanks to a look at annual Labor Department data known as Trade Adjustment Assistance (TAA).
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TAA was created in 1962 to help U.S. workers whose jobs were eliminated due to import competition. TAA data actually counts only a fraction of the overall number of these jobs. But the TAA program still provides a helpful snapshot of industries that are hurting the most—and whether jobs are being eliminated or have moved overseas.
We identified a Top 25 list of impacted companies, ranked by the number of workers receiving TAA assistance. As expected, manufacturers shed the most jobs.
There is a difference between losing jobs to imports and jobs being offshored. Offshoring occurs when a company is doing well but shifts functions abroad—typically to save on costs. GM, Ford, and Verizon were at the top of the list in terms of this offshoring. In fact, the Top Five job losers in 2019 were mostly everyday “American” brands like GM, Symantec, Alorica, Husqvarna, and Toys”R”Us.
According to federal data, 110,000 workers were approved for TAA assistance last year. And the top 25 companies with workers qualifying for TAA accounted for 36 percent of that total.
At the top of the list was General Motors. The company has figured prominently for TAA applications in recent years, since it keeps moving production abroad—mainly to Mexico. By comparison, Ford came in at number 17, receiving TAA support for 1,056 workers. Ironically, North America was the best-performing region for Ford, with revenue up 1 percent compared to a global decline of 3 percent. Yet the company still shifted jobs offshore.
Number two on the list is software vendor Symantec, with 3,165 workers receiving TAA support. Last November, Symantec sold its business-to-business division and renamed itself Norton LifeLock. Norton’s overall business isn’t shrinking, though, and the company now has 20.6 million customers—an increase of 416,000 from last year.
Harley-Davidson took 14th place on the list, claiming TAA support for 1,194 workers. Most of those jobs likely weren’t offshored, however. Harley has lost market share to imported motorbikes, and its 2019 sales were down 8 percent. Harley has long suffered from Japanese competition that benefits from an undervalued currency.
Verizon came in at number 15 on the list, claiming TAA support for 1,070 workers. Verizon is a growing company and reported revenue of $132 billion last year, only slightly up on 2018. But earnings surged by 24 percent to $4.65 a share, as consumers spent more on wireless services. Verizon has a program to cut $10 billion out of its costs in the three years. The offshoring of 1,070 jobs helped reach that goal.
With all of this offshoring and import-related job loss, does the TAA actually help workers? TAA provides two forms of support—retraining for workers who lose their jobs and income support for a limited time until these workers find new jobs.
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Policymakers in Washington have long believed that imports don’t kill jobs—they merely change the mix of jobs. This was the promise of “normalized” trade with China, for example—that globalized trade would improve “economic efficiency” and help workers move to more productive positions. And so, TAA was needed merely to help transition them to better employment.
Sadly, that hasn’t happened. There is now growing recognition that the quality of U.S. jobs being created has systematically deteriorated, including wage levels. Essentially, impacted workers have downshifted to less productive employment. Economists Kara Reynolds and John Palatucci found that retrained TAA workers earn an average of 30 percent less than in their previous jobs.
This is not an acceptable trajectory for America’s middle class. Globalization and unbalanced trade, especially with nations like China that ruthlessly exploit trade agreements, have driven a decline in traditionally strong U.S. industries. That has left America’s workers high and dry. It’s time to find a smarter long-term solution than simply pasting a TAA band-aid on workers that lose jobs to unfair trade.
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