(Photo: Global Times)
The ongoing trade war between China and the US is already having an impact on the US job market.
The Voice of America (VOA) reported recently that jobs for middle-class American people continue to shrink, though work positions at the top and bottom of the pay scale are growing. Personal care and services occupations are the fastest-growing segment of the job market for non-university-educated workers, the report showed.
The news offers a new perspective on US employment data. While many have been focusing on the robust employment checks reported by the US in recent months, less attention has been paid to the impact of the trade war on employment structure. It seems the low-end services industry contributes most to US employment growth, but middle-income job growth appears far below expectations.
The US manufacturing industry is in contraction, with the manufacturing Purchasing Managers' Index from the Institute for Supply Management coming in at 48.3 percent in October. Many companies across the manufacturing sector are delaying their plans to hire more employees. The Wall Street Journal reported in September that the current number of manufacturing jobs in the US - 12.85 million - is 6.7 million less than it was at its peak in 1979. A slowdown in US manufacturing is hitting jobs. According to the US Labor Department, factories shed 2,000 jobs in September.
The trade war with China isn't helping bring factory jobs back to the US. It is leading to job losses in the manufacturing sector. The US' position in the global supply chain is weakening as tariffs on Chinese imports have resulted in a surge in the price of raw materials used in US manufacturing industries. In the era of global interdependence, the US manufacturing sector cannot improve its competitiveness if Washington wants to separate its economy from the global industrial chain.
The trade war poses an obstacle for the expansion of made-in-the-US products in overseas markets. According to maritime and offshore website gCaptain, the Port of Los Angeles moved 770,189 Twenty-Foot Equivalent Units (TEUs) in October, a 19.1 percent decrease from 2018's record-breaking October. A unilateral protectionism policy adopted by the US government is the direct cause of job losses in US manufacturing.
As middle-income jobs shrink, laborers have to focus more on the low-end services industry. The VOA report showed that one-third of the US workforce is currently involved in the so-called "gig economy." Most work part-time, picking up gigs - such as driving for the Uber car service - to supplement their income from another job, according to the report.
It is a serious problem for the US economy. The reported decline of jobs for middle-class Americans will widen the income gap between the rich and the poor. Income inequality is feeding the protectionist sentiment that could lead to tragic consequences for the US economy.
Reliance on low-end services industries to drive up employment is a big problem. This scenario often occurs in developing Asian countries. Currently, the US - the world's largest economy - looks similar to developing countries like India and Myanmar in this regard. The trade war is not helping the US bring back manufacturing jobs, but is helping it add low-income jobs with lower social welfare and dignity.
The US job market reflects the deep-seated problems brought about by the trade war. The time has come for the two sides to sit at the negotiating table and end tensions. Otherwise, millions of middle-income jobs in the US will be threatened.