Exports Play Vital Role in Supporting U.S. Employment


Source: DoC - ITA
Related Topics: Department of Commerce International Trade

A significant number of jobs in the United States depend on exports, according to a recent report published by the Department of Commerce. (See, also, the related story on exports from metropolitan areas) (photo © Janine Lamontagne/iStock)

As we celebrate World Trade Month, a new report from the Department of Commerce examines the relationship between exports and employment and shows the important role that exports play in supporting job creation and the overall health of the U.S. economy.

by Arash Massoudi

The percentage of GDP represented by exports is the highest in nearly a century and is indicative of how important exports will be in any effort to encourage economic growth and the creation of new jobs, according to new research recently published by the Department of Commerce. In 2008, the United States exported nearly $1.7 trillion in goods and services. These exports supported more than 10 million full- and part-time jobs and accounted for 12.7 percent of gross domestic product (GDP).

The report, entitled “Exports Support American Jobs,” shows that export-supported jobs rose from 7.6 million in 1993 to 10.3 million in 2008, an increase of 2.7 million jobs. This increase accounted for 40 percent of total job growth in the United States during this period.
“The new record [level of GDP],” notes the report, “shows that the upward growth of trade in an expanding global market holds great opportunities for U.S. businesses whose leaders are thinking strategically about the future growth of their companies.”

With the appearance in early 2010 of promising signs that the U.S. economy is recovering from the severe recession that began two years ago, businesses will want to position themselves to take advantage of those opportunities.

Two Decades of Data
In analyzing the relationship between exports and employment, the report focuses on 1993–2008, a time period for which full-year data were available. It also includes projections for 2009 and 2010. Significant findings in the report include the following:

  • In 2008, export-supported jobs accounted for 6.9 percent of total U.S. employment.
  • The value of total U.S. exports was nearly $1.7 trillion, or almost $165,000 per export-supported job.
  • The value of exports per job increased to between $170,000 and $175,000 in 2009 and will likely increase to $180,000 in 2010.
  • The number of jobs supported by exports declined sharply in 2009 from 2008. The drop reflected a large decrease in the nominal value of exports and a modest gain in the ratio of exports per job.

Exporting across Industrial Sectors
Export-supported employment was found across the entire range of U.S. industries (see chart). Although two sectors—manufacturing and professional or business services—accounted for more than half of the 10.3 million jobs supported by exports in 2008, other industries had significant shares. Those industries included transport and warehousing (11 percent, or 1.1 million jobs); wholesale trade (10 percent, or 1.0 million jobs); finance (6 percent, or 620,000 jobs); and agriculture (4 percent, or 412,000 jobs).

Within industries, the number of jobs supported by exports showed a similar prominence. For example, in the manufacturing sector, nearly 3.7 million jobs (27 percent) of all jobs in that sector were supported by exports. Significant shares of export-supported employment were also found in transport and warehousing (23 percent), agriculture (19 percent), and wholesale trade (17 percent).

Manufacturing and Services Exports
Employment in the manufacturing sector was the focus of several sections of the report. Although the total number of export-supported jobs in the manufacturing sector grew between 1993 and 2008, the report found that the sector’s share of total export-supported jobs declined during that period, from 42.2 percent to 35.9 percent. Meanwhile, the share of export-supported jobs in professional and business services rose from 16.1 percent to 20.2 percent.

In 2008, exports of goods (which include manufactured goods, agricultural products, and raw materials) supported 7.5 million (73 percent) of the 10.3 million export-supported jobs. “[The] available data,” notes the report, “suggest that the number fell sharply in 2009 from the 2008 level.”

Exported services supported 2.8 million jobs in 2008. The report notes that the number of jobs supported by service exports has been increasing since 1993, but suggests that this number also fell in 2009.

Analysis Key to Recovery

For More Information
The report “Exports Support American Jobs” was produced by the International Trade Administration in collaboration with the Economic and Statistics Administration. It bases its findings on an analysis of data made available by the Bureau of Labor Statistics and is the first comprehensive look at the relationship between employment and exports since 1996. The report is one in a series of papers on trade and the U.S. economy that ITA plans to publish during the coming year. Copies are available for download from ITA’s Web site.

The report came only weeks after President Barack Obama signed an executive order on March 11, 2010, which created the National Export Initiative (NEI). The initiative calls for doubling U.S. exports during the next five years to create 2 million new jobs. (See “Taking the Mystery and Fear out of Trade” on page 4 for more information.)

In their introduction to the report, Gary Locke, secretary of commerce, and Francisco Sánchez, under secretary for international trade, underscored the importance of the analysis: “[It] is an analytical complement to the NEI, demonstrating the fundamental role that exports already play in the U.S. economy and providing the methodological framework that will be used to track progress in meeting the president’s goals.”

The NEI places the International Trade Administration (ITA) at the center of the federal government’s push to grow exports and to help revitalize the U.S. economy. In his budget submission for fiscal year 2011, President Obama asked Congress to increase ITA’s operating budget by $80 million. Among other things, this additional funding will allow ITA to hire 328 trade experts, whose primary task will be to help implement the NEI.

The challenges and the importance of trade promotion are expressed in the report’s introduction. “The year 2009 was a difficult one for the global economy, which hit U.S. exporters and their employees particularly hard. This report clearly illustrates that recovery in our economy, employment, productivity, and manufacturing is tied to our ability to drive export competitiveness.”

Arash Massoudi is a confidential assistant to the under secretary in the International Trade Administration.

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