Who’s afraid of Virginia Wu? US employment footprints and self-sufficiency

Abstract

Globalization has brought about concerns of domestic job losses due to outsourcing to countries like China. The ‘employment footprint’ concept provides new insights into the implications of trade for employment. Using this approach for the period of 1995–2008, we analyze the relation of US jobs with international trade, particularly with China. Furthermore, we compare the US employment footprint with its labor endowment to assess if the country could be self-sufficient in terms of labor. We find that the US’s consumption increasingly depends on foreign workers. The country ‘consumes’ more labor than is nationally available; thus, self-sufficiency is not possible under realistic assumptions. Moreover, the US has benefited from jobs – especially in services – generated by the world economy. Referring to Albee’s famous play about living in illusions, we use ‘Virginia Wu’ as a Chinese version of ‘Virginia Woolf’ to argue that the perceived threat of China (Virginia Wu) is only an illusion.