Economic Policy Institute study ranks Pennsylvania ninth in nation in potential job loss, if the auto industry were to collapse.
The financial woes of the U.S. auto industry are not just a Detroit problem but could impact the economies of states across the nation. According to a new study by the Economic Policy Institute Pennsylvania would lose 120,000 jobs.
Up to 120,100 jobs would disappear in Pennsylvania within a year, if General Motors, Ford and Chrysler were allowed to fall into bankruptcy. The loss of General Motors, the company most at risk of entering bankruptcy, would jeopardize up to 33,200 jobs in Pennsylvania.
Even if only motor vehicles and parts jobs are counted, Pennsylvania would lose up to 8,400 jobs from a total industry shutdown and up to 2,300 from the shutdown of General Motors alone, the study estimated.
“Anyone who thinks an auto industry collapse has little impact on Pennsylvania should think again,” Mark Price, Ph.D., labor economist for the Keystone Research Center in Harrisburg, said. “As the EPI study shows, the 120,000 Pennsylvania jobs threatened by an auto industry failure account for 2.1 percent of total state employment.”
The EPI paper, titled When Giants Fall, estimates that a total collapse of all three U.S. auto makers would result in the loss of up to 2.1 million American jobs within the next year. Tax revenue losses and additional governmental costs would top $150 billion within three years if the three companies enter bankruptcy.
Without cars to export, the U.S. trade deficit would rise by $109.3 billion, the study also found.
The job numbers encompass direct job losses from the automakers’ potential shutdown, as well as indirect job losses in technical and service industries and vehicle production-supported industries, such as auto parts, electronics, steel, tires, aluminum and plastics. The study also estimates the loss of “re-spending” jobs as a result of the wages lost by workers in motor vehicle industries and other sectors supported by car production.
Frank S. Washington
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