The United States could create 5.8 million jobs — particularly high-paying manufacturing jobs — if it moved to end global currency manipulation, according to a report released Wednesday by the Economic Policy Institute.
The institute, a think tank supported by organized labor, said manipulation of currency exchange rates was behind much of the nation’s $703 billion annual trade deficit. The report said restoring a balance to foreign currencies over the next three years would create jobs in every state.
About 67,000 jobs could be created in Kansas and 116,800 in Missouri, the report estimates.
China, Japan and several other foreign countries devalue their currencies to make their products cheaper, putting U.S.-made goods at a competitive disadvantage, the report said. The report suggests that realigning exchange rates could reduce the U.S. trade deficit by up to $500 billion a year by 2015. The report says such a move would increase the nation’s gross product output by about $720 billion a year and create up to 5.8 million jobs, including about 2.3 million in manufacturing.
Realigning exchange rates could also increase tax revenue, which could cut the federal budget deficit by about $266 billion next year, the report said.
“Congress and the administration have a new focus on manufacturing because they understand its value to the American economy,” Scott Paul, president of the Alliance for American Manufacturing, said in a statement. “But they are ignoring the most important job-creating opportunity for manufacturing — stopping currency manipulation.” To strengthen employment, Paul said, Congress and the Obama administration should launch a “national manufacturing strategy that starts with passing bipartisan legislation to end currency manipulation.” Paul’s organization represents manufacturers and the United Steelworkers.
Last September, a bipartisan group of 60 senators signed a letter to address currency manipulation in trade talks with Japan and other Pacific nations. The move followed a similar letter signed in June by 230 House members.
“No other policy change could have such a profoundly positive impact for American manufacturing jobs,” Paul said.
Who would get the boost
An industry sample of U.S. jobs created by ending currency manipulation, by 2015
Manufacturing: 2.4 million
Health care: 430,600
Transportation equipment: 352,400
Motor vehicles /parts: 140,400
Source: Economic Policy Institute