Much More Than Just Factory Jobs  

by
May 10, 2011

Millions of our factory jobs have been sent to China and other third-world countries. But, we have lost many more jobs in our economy than just the factory jobs that were sent to China.

Because of something in economics called the “multiplier effect,” each factory job creates another 2-4 jobs elsewhere in the economy. So, when a factory closes, for each factory worker who directly loses his or her job, another 2-4 workers also lose their jobs.

Think of a small town with a large factory that employs 2,000 workers. When this factory closes and sends the jobs to China, then 2,000 workers directly lose their jobs. But, workers at the local cafes, bowling alleys, movie theaters, daycare centers, auto dealerships, etc. may lose their jobs also.

Also, the tax revenue paid by the factory to the local town and county will also drop, which means less money for city and county workers.

When this one factory closes, the effect ripples thoughout the local economy, because of the “multiplier effect”. When our country closes tens of thousands of factories and millions of workers directly lose their jobs, the effects spread throughout our economy, and the results are devastating.

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