by Umar Farooq
According to Oxford Economics, 65,000 US rail jobs are under threat due to import form China of the freight rail cars into the country. If the United States allows some of China’s largest producers of freight rail cars into the country, they could end up eliminating up to 65,000 U.S. jobs. Thanks to the subsidies provided to Chinese state enterprises.
“China’s economy produced $21.27 trillion in 2016 (based on purchasing power parity). It’s the world’s largest economy. The European Union is second, at $19.1 trillion. The United States fell to third place, producing $18.5 trillion. China has 1.37 billion people, more than any other country in the world. China is still a relatively poor country in terms of its standard of living. Its economy only produces $15,400 per person; compared to the U.S. GDP per capita of $57,300.The low standard of living allows companies in China to pay their workers less than American workers. That makes products cheaper, which lures overseas manufacturers to outsource jobs to China. (Source: “China’s Economy, CIA World Factbook.)” Thebalance
“The U.S. freight rail network is a $60 billion industry covering 140,000 rail miles and supporting 221,000 jobs, according to the Federal Railroad Administration. The worry for some is that state-owned Chinese corporations will enter the U.S. and sell Chinese-built freight rail cars far below the market price, forcing U.S. producers to close or relocate overseas. Oxford Economics estimates a minimum loss of 5,090 U.S. jobs from increased Chinese involvement in production, and a maximum loss of 64,280 U.S. jobs. The president of the Chicago-based US-China Chamber of Commerce, whose mission is to facilitate partnerships between businesses in the two countries, said China, could pose a threat to jobs in the United States. It seems [as] though the more investments come from China, the more jobs are going to lose”. CNBC
The Oxford Economics report considers US freight-car manufacturing at a $5 billion industry. The research firm’s analysis comes in the wake of successful bids from affiliates of state-owned China Railway Rolling Stock Corporation, or CRRC, the world’s largest supplier of rail equipment, for US subway car manufacturing, as well as approval for CRRC’s minority stake in US-based manufacturer Vertex Railcar.
“On the other hand, President Trump’s preliminary budget sparked outrage among government-rail advocates, though American taxpayers should celebrate. Research shows that public transportation should focus on busing, not rail. While trains are excellent ways to move freight, they are a horrifically inefficient and expensive way to move people. Rail is an antiquated mode of transportation and ridership numbers show that. In 2016, Los Angeles, Chicago, Austin, and Washington D.C., all highly dense highly populated areas, saw decreases in ridership. Virtually every major U.S. city saw a decrease, and out of the top ten largest cities, only New York City and Houston saw positive ridership numbers.” thehill
Sounding the alarm on the cuts, The National Association of Railroad Passengers – a rail advocacy group – said, “This [budget] will jeopardize mobility for millions of Americans and endanger tens of thousands of American jobs.” However, the only factual part of that statement is that it will endanger jobs at government agencies.
Despite the above mentioned facts and figures, not all Chinese investment hurts U.S. workers. Chinese-owned companies added about 50,000 U.S. employees last year, for a total of more than 140,000 American workers, according to consulting firm the Rhodium Group.
by Umar Farooq