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Letter to the Editor of the Financial Times
Dear Leader,
I must take strong exception to an article in the Observer Column
on February 9 regarding a study recently released by the Consuming
Industries Trade Action Coalition (CITAC). That study, of which
I am a co-author, found that as many as 200,000 people in steel
consuming sectors (broadly defined) were unemployed by higher steel
costs during 2002.
The column incorrectly suggests that our estimate reflects job
losses owed entirely to the effects of steel tariffs. We went to
great lengths in the study to emphasize that steel tariffs are one
significant cause of job losses, but by no means the only cause.
The column quotes Dr. Gary Hufbauer stating our findings are "way
out of bounds." Dr. Hufbauer's comment was a reaction to an
earlier FT story about the CITAC study, in which the FT reporter
incorrectly stated that the job losses we calculated were due solely
to steel tariffs. Dr. Hufbauer and his colleague Ben Goodrich have
since carefully analyzed the CITAC study and the tariff-related
job loss estimate Dr. Hufbauer was quoted making. Dr. Hufbauer's
revised estimates of job losses in steel-consuming sectors (using
a much narrower definition of steel consumers) are now posted on
the CITAC web site. Objective readers of our estimates will see
a rough consistency between them. Indeed, other economists have
also called our study "very reasonable," and "completely
defensible."
Finally, the column accepts as fact the steel industry's deliberate
miscalculation that actual steel-consuming jobs increased from January
2002 to December 2002. As we note in the study, the employment data
cited are not adjusted for seasonal variations. Thus, it is quite
improper to compare January 2002 to December 2002 employment data.
Instead, year on year data must be compared, such as December 2001
data to December 2002 data. According to newly released U.S. government-revised
employment data, this comparison shows clearly that in fact employment
in steel-consuming industries declined from December 2001 to December
2002 by 370,600 jobs.
The column suggests that there is something duplicitous about our
correction of an inaccuracy that the column acknowledges has no
impact on our central conclusion. We discovered that we had stated
that over 900,000 steel consumers had lost their jobs over the one-year
period ending December 2002, when in fact we should have stated
the losses were over a two-year period ending December 2002. Again,
this had no impact on the conclusions of the study.
Our findings remain that as many as 200,000 American steel consumers
were added to the unemployment rolls last year as a result of higher
steel costs. To date, no one has found fault with the economic modeling
used in the study. The FT did a disservice to its readers by buying
into the rhetoric of the domestic steel industry.
Sincerely,
Laura Baughman
President, Trade Partnership Worldwide, LLC
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