•Press Release Coronavirus Economic Crisis and Recovery International Monetary Fund World
Red States Including Texas, Louisiana, Alaska, South Carolina Among the Hardest-Hit Due to Pandemic-Related Export Slump
Washington, DC — A new paper from the Center for Economic and Policy Research (CEPR) argues that an additional, larger issuance of Special Drawing Rights — reserve assets at the International Monetary Fund — would help bring US export-related jobs back, and put the country on a path to create even more over the next several years. This is the conclusion of a new issue brief titled, “Special Drawing Rights Could Help Recover Millions of Export-Related US Jobs, and Create Even More,” that examines how the pandemic-related global recession has affected exports and export-related employment in the United States.
“The US economy, along with most others, has become increasingly globalized in recent decades, but the response to the COVID-19 pandemic and related economic downturn has mostly not been global,” CEPR Co-Director Mark Weisbrot said. “An allocation of trillions in SDRs — which members of Congress are currently considering — would help low- and middle-income countries in their economic recovery from the global recession and this would restore sagging demand for US exports.”
Citing Commerce Department data, the issue brief estimates that “the loss of exports from the pandemic and world recession resulted in a loss of 1.8 million [US] jobs in 2020. Including 2021 data, this number reaches over 2.2 million jobs.”
“The implied loss of jobs due to a loss of goods exports was significant for many states, with 21 states losing over 10,000 jobs,” the paper states. “Texas lost the most jobs with 167,000; South Carolina had the largest drop in percentage terms: 3.1 percent of total state employment (68,000 jobs).”
Texas is one of the states hit hardest by the export slump, as it had one of the highest percentages of export-related jobs as a share of total employment (8.7 percent), overall number of jobs supported (1.1 million), and total value of goods exported in 2019 ($328 billion). Louisiana also has a high percentage of export-related jobs as a share of total employment (8.8 percent) and had the fourth-largest total value of goods exported in 2019. As a share of total pre-pandemic employment, goods exports were most important to Alaska, where export-related jobs comprised 11.5 percent of the state’s employment in 2019.
Other states with a relatively large number of export-supported jobs include California (677,000 jobs), Illinois (290,000), New York (260,000), and Michigan (249,000), and states with the highest value of goods exports in 2019 were, after Texas, California, New York, Louisiana, and Washington State.
“Increased demand for US exports would bring back these export-related jobs back more quickly, as well as put the US economy on a path to creating more export-related jobs over the next five years,” the paper states. “The US economy is still down about 6.5 million jobs from its pre-pandemic level of employment, and 9.2 million below trend.”
The House of Representatives voted twice last year for the US Treasury to approve an IMF issuance of at least 2 trillion SDRs (equivalent to about $2.8 trillion dollars). However, Republicans blocked it in the Senate.
“It should be a simple decision for legislators to support bills directing the US Treasury representative at the IMF to back a much-larger allocation of SDRs and help bring back export-related jobs to the US,” Weisbrot said. “Especially since there is absolutely no cost of this allocation to the US government or taxpayers.
“Unfortunately, what we’ve seen from some Republicans is opposition to SDRs, often based on a misunderstanding of how SDRs work, or on inaccurate information.”