Business & Economy

Trans-Pacific Partnership could be boon for Inland Empire

Many of the goods from the Ports of Los Angeles and Long Beach get trucked to the Inland Empire to be processed and stored at warehouses such as this one, which is owned by Amazon.
Many of the goods from the Ports of Los Angeles and Long Beach get trucked to the Inland Empire to be processed and stored at warehouses such as this one, which is owned by Amazon.
Maya Sugarman/KPCC

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As the United States hammers out the final details of the Trans-Pacific Partnership (TPP), trade watchers say the deal will bring a new round of jobs to the Inland Empire.  

The passage of the far-reaching trade agreement with 12 countries (including Japan) has been a key priority for President Barack Obama. Unions and free trade opponents decry the pact as "NAFTA on Steroids" because of potential job losses in manufacturing. If passed though, it would increase the cargo flowing through the Ports of Los Angeles and Long Beach; 40 percent of U.S. container imports are already shipped through the local ports.

Many of those imports then get trucked to the Inland Empire to be processed and stored, and that requires lots of labor, which makes up a field called “logistics,” now the area’s fastest growing job sector, having added 8,000 jobs over the past two years.

"When you lower trade barriers, two-way trade goes up," said John Husing, chief economist of the Inland Empire Economic Partnership. "[The TPP] can only have a positive effect out here."

However, in the rest of the state – and the country – unions warn the trade agreement, much of which has been negotiated behind closed doors, will be bad for manufacturing workers, because their jobs will get shipped overseas.

The AFL-CIO puts it this way: "While negotiations are not yet complete, the publicly available information is concerning for workers: it looks as if, once again, the global corporations are having too much influence in the process." 

Jock O’Connell, an international trade advisor at Beacon Economics, says losing manufacturing jobs to gain ones in logistics is a bad trade-off.

“Jobs in manufacturing invariably pay a lot more than jobs in logistics,” said O'Connell.

Husing points out logistics jobs paid an average of $44,591 in 2014, which he says is a good wage considering 83 percent of positions require a high school education or less.

"It's a great sector for upward mobility," he said.

The average manufacturing worker made $49,138, and those jobs tend to have considerably more stability.

The trade pact – if it passes – would likely only accelerate manufacturing’s decline; Since 2010, only one percent of the state’s job growth has come from that sector.

Aside from the United States, the other nations in the pact would be Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and Japan, which would be the largest trading partner with the U.S.

The strength of the dollar is also another boon for the Inland Empire, and a bigger one, especially in the short-term, said Husing.

“It’s now 23.3 percent less expensive to buy imported goods from the world in the United States," Husing said. "That combined with a trade agreement like this really would have an enormous impact on the import side.”