The Dynamics of Trade and Employment, Chapter 4 & Chapter 7

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This file contains a collection of documents primarily related to the Rural Economic Policy Program (REPP) of The Aspen Institute and the University of California’s response to Senate Concurrent Resolution No. 43 (SCR 43) concerning the state’s Hispanic population. It also includes an excerpt from a publication titled “The Dynamics of Trade and Employment,” specifically a chapter on the apparel industry by Carol A. Parsons. Here’s a summary of the key themes: Rural Economic Policy Program (REPP) & Juan Vicente Palerm’s Involvement:

• A letter from Juan Vicente Palerm, Director of the Center for Chicano Studies at UCSB, to Cynthia M. Duncan, Associate Director of REPP at The Aspen Institute, dated December 6, 1988.
• Palerm expresses surprise and pleasure with REPP’s announcement of grants for research on the rural poor, particularly the inclusion of qualitative/ethnographic research.
• He indicates his intention to prepare a proposal for the program and is encouraging colleagues at UCSB (Thomas Harding, Manuel Carlos) to do the same.
• Palerm also requests copies of Calvin Beale’s rural poverty maps.
• An earlier letter from William A. Diaz of The Ford Foundation to Juan Vicente Palerm (September 7, 1988) acknowledges Palerm’s work on Chicano/Mexican farmworkers and rural enclaves, but states that the Foundation does not support individual, university-based Latino research centers. Diaz advises Palerm to finish his current manuscript and send a copy with new research ideas for potential advice on other funding sources.
• Palerm’s letter to William A. Diaz of The Ford Foundation (May 31, 1988) explains delays in reporting due to his deep involvement in the University of California’s SCR 43 Task Force. He highlights that his IUP-supported research facilitated his contributions to the SCR 43 report and that his center is well-positioned to generate new research proposals on farmworkers, Chicano/Mexican rural enclaves, and California agriculture, seeking financial support. He mentions Leo Estrada’s suggestion to apply for research development funds from organizations like the Ford Foundation, Aspen Institute, IUP, and California Policy Seminar.

Senate Concurrent Resolution No. 43 (SCR 43) and Hispanic Issues:

• SCR 43, filed September 18, 1987, addresses the large and growing Hispanic population in California.
• It outlines various findings and declarations about the challenges faced by the Hispanic population (poverty, low economic opportunity, underrepresentation, academic dropout rates, limited English proficiency, discrimination).
• The resolution requests the University of California to coordinate resources, seek research and graduate training funds, consider forming a social research policy and priorities task force and advisory committee, and concentrate research on areas like health, education, employment, government participation, housing, welfare, criminal justice, and immigration policy.
• It also requests a report from the university within nine months on its response to this challenge.
• A section titled “UC Initiates Major Study on Hispanic Issues” describes the University of California’s undertaking of a project to assess the needs of the Hispanic population based on SCR 43.
• The project involves the SCR 43 Task Force, led by UC MEXUS Director Arturo Gómez-Pompa, with an Advisory Committee and Executive Committee (which includes Juan Vicente Palerm).
• The goal is to focus the university’s resources on policy-related questions concerning the Hispanic population.

The Dynamics of Trade and Employment – Apparel Industry (Carol A. Parsons):

• This chapter analyzes the impact of international trade on domestic employment in the U.S. apparel industry, which faces a bleak future due to a large trade deficit and low foreign wages.
• It discusses how imports lead to domestic firms reducing labor content and how quotas perversely encourage shifts to uncontrolled and higher-value product categories.
• The industry is characterized by atomistic competition, low capital requirements (except for work clothing), and a labor-intensive workforce comprising older, predominantly female, and minority workers with lower education levels.
• Employment in the apparel industry has plummeted significantly since 1960, and wages are generally low, below the poverty line for a family of four.
• The trade balance in apparel has sharply deteriorated.
• The chapter details how market share of domestic apparel producers has declined due to imports, which captured domestic consumption growth.
• It examines various methods for estimating employment loss due to trade, including accounting models (which tend to understate the effect of trade by separating it from productivity), counterfactual analysis, and input-output (I-O) analysis (which indicates a much broader range of job losses, including indirect losses in linked industries like textiles).
• The costs of job loss for apparel workers include longer unemployment spells for women and significant net earnings losses.
• The impact of trade on apparel unions is discussed, with imports contributing to declining union membership and intensifying competition between union and nonunion firms.
• “Managed trade” policies, like tariffs and the Multifiber Agreement (MFA), have been in place for decades but have failed to prevent job loss and declining market share, often proving ineffective due to loopholes and incentives for foreign producers to circumvent regulations.
• Corporate strategies include off-shoring production to low-wage countries (reinforced by policies like Item 807 of the Tariff Schedule and the Caribbean Basin Initiative) or shifting to design, distribution, and merchandising rather than manufacturing.
• The conclusion is that employment in the domestic apparel industry will continue to decline, and the key question is how to preserve related jobs. Protection only slows the rate of job loss, and corporate decisions to move production offshore are a major factor.