CITAC STEEL TASK FORCE STANDS BY "SOLID AND CONSERVATIVE"
ECONOMIC ANALYSIS

"We'll Continue to Fight for Steel Consumers and Let the Facts Speak for Themselves"

Washington, DC: Consuming Industries Trade Action Coalition Steel Task Force (CITAC STF) Chairman William Gaskin stated today that CITAC STF study, showing 200,000 job losses in steel consuming industries nationwide in 2002 due to higher steel prices, is "solid and conservative economic analysis that quantifies the difficulties faced by steel consuming manufacturers." Gaskin urged policymakers, economists and the public alike to read the study and draw their own informed conclusions.

The study, "The Unintended Consequences of U.S. Steel Import Tariffs: A Quantification of the Impact during 2002," was conducted for the CITAC Foundation by Trade Partnership Worldwide, LLC, and authored by Dr. Joseph Francois and Laura Baughman. It demonstrates that more American workers in steel consuming industries lost jobs last year to higher steel costs than the total number employed by the U.S. steel industry.

Baughman, co-author of the study, explained, "The study measured jobs in steel consuming industries with and without the price increases in 2002. We employed regression analysis, which is commonly used in business, economics, and the sciences. This technique produces reliable, repeatable results."

Baughman noted that the study has been corrected in two minor respects, neither of which affect the study's fundamental finding that 200,000 Americans were unemployed in 2002 as a result of price hikes. First, the number of jobs lost in steel consuming sectors broadly defined was actually 915,000, not 922,000 as stated. In addition, the decline in employment in these sectors occurred over two years, not one. This change is reflected in a revised version of the study now posted on the CITAC website. Other clarifications were included to help readers make proper comparisons in the data.

Baughman also responded to claims by the American Iron and Steel Institute (AISI) that the study showed an increase in the total number of steel consuming jobs in 2002.

"The AISI made a common mistake. First, although the study notes that it used data not adjusted for seasonal variation, the AISI inappropriately compared actual employment numbers for January 2002 and December 2002, and claimed that the difference shows that there was an increase in employment. This is not correct, because an analysis must be made over a time period using the same months, in this case, from December 2001 to December 2002. This corrects for regular seasonal variations from summer employment levels, to fall and winter levels (like construction workers laid off in January and February who are re-employed later in the year). When this examination is done for 2002, a major loss of steel consuming jobs is shown, not a gain."

"Second, AISI only looked at actual employment data, which does not reveal the job hires that should have occurred, but didn't because of steel price hikes- the primary purpose of the study. The study analyzed the number of jobs lost in steel consuming industries as a result of steel price increases and concluded by December 2002 they had forced 200,000 American steel consuming workers onto unemployment rolls.. These are real people and real jobs, reflecting both layoffs, and those laid off in 2001who were not reemployed in steel consuming industries due to steel price increases," concluded Baughman.

"Steel producers appear to hope that if they keep repeating that tariffs are not hurting their customers and causing widespread damage to downstream industries, then someone will believe them," stated Gaskin.

To review the revised study, which includes the noted corrections, click here .

CITAC is a coalition of companies and organizations committed to promoting a trade arena where U.S. consuming industries have access to global markets for imports that enhance the international competitiveness of American firms. The CITAC Steel Task Force is comprised of steel consumers working to achieve the termination of the 201 steel tariffs by mid-point review and reform U.S. trade laws and policies to benefit U.S. steel consumers.