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Tue Jan 6, 2015, 03:47 PM

NAFTA at 20: One Million U.S. Jobs Lost, Higher Income Inequality

NAFTA at 20: One Million U.S. Jobs Lost, Higher Income Inequality
Posted: 01/06/2014 3:19 pm EST

For NAFTA's unhappy 20th anniversary, Public Citizen has published a report that details the wreckage. Not only did promises made by NAFTA's proponents not materialize, but many results are exactly the opposite.

Such outcomes include a staggering $181 billion U.S. trade deficit with NAFTA partners Mexico and Canada and the related loss of 1 million net U.S. jobs under NAFTA, growing income inequality, displacement of more than one million Mexican campesino farmers and a doubling of desperate immigration from Mexico, and more than $360 million paid to corporations after "investor-state" tribunal attacks on, and rollbacks of, domestic public interest policies.

The study makes for a blood-boiling read. For instance, we track the specific promises made by U.S. corporations like GE, Chrysler and Caterpillar to create specific numbers of American jobs if NAFTA was approved, and reveal government data showing that instead, they fired U.S. workers and moved operations to Mexico.

The data also show how post-NAFTA trade and investment trends have contributed to middle-class pay cuts, which in turn contributed to growing income inequality; how since NAFTA, U.S. trade deficit growth with Mexico and Canada has been 45 percent higher than with countries not party to a U.S. Free Trade Agreement, and how U.S. manufacturing exports to Canada and Mexico have grown at less than half the pre-NAFTA rate.

http://www.huffingtonpost.com/lori-wallach/nafta-at-20-one-million-u_b_4550207.html


Economic Policy Institute

NAFTA’s Impact on U.S. Workers

Posted December 9, 2013 at 4:00 pm by Jeff Faux

By establishing the principle that U.S. corporations could relocate production elsewhere and sell back into the United States, NAFTA undercut the bargaining power of American workers, which had driven the expansion of the middle class since the end of World War II. The result has been 20 years of stagnant wages and the upward redistribution of income, wealth and political power.

NAFTA affected U.S. workers in four principal ways. First, it caused the loss of some 700,000 jobs as production moved to Mexico. Most of these losses came in California, Texas, Michigan, and other states where manufacturing is concentrated. To be sure, there were some job gains along the border in service and retail sectors resulting from increased trucking activity, but these gains are small in relation to the loses, and are in lower paying occupations. The vast majority of workers who lost jobs from NAFTA suffered a permanent loss of income.

Second, NAFTA strengthened the ability of U.S. employers to force workers to accept lower wages and benefits. As soon as NAFTA became law, corporate managers began telling their workers that their companies intended to move to Mexico unless the workers lowered the cost of their labor. In the midst of collective bargaining negotiations with unions, some companies would even start loading machinery into trucks that they said were bound for Mexico. The same threats were used to fight union organizing efforts. The message was: “If you vote in a union, we will move south of the border.” With NAFTA, corporations also could more easily blackmail local governments into giving them tax reductions and other subsidies.
snip---
In terms of U.S. politics, the passage of NAFTA signaled that the Democratic Party—the “progressive” side of the U.S. two-party system—had accepted the reactionary economic ideology of Ronald Reagan.

http://www.epi.org/blog/naftas-impact-workers/


According to the Economic Policy Institute's study, 61% of the net job losses due to trade with Mexico under NAFTA, or 415,000 jobs, were relatively high paying manufacturing jobs.[2] Certain states with heavy emphasis on manufacturing industries like Michigan, Ohio, Pennsylvania, Indiana, and California were significantly affected by these job losses.[2] For example, in Ohio, Trade Adjustment Assistance and NAFTA-TAA identified 14,653 jobs directly lost due to NAFTA-related reasons like relocation of U.S. firms to Mexico.[4] Similarly, in Pennsylvania, Keystone Research Center attributed 150,000 job losses in the state to the rising U.S. trade deficit.[5] Since 1993, 38,325 of those job losses are directly related to trade with Mexico and Canada. Although many of these workers laid off due to NAFTA were reallocated to other sectors, the majority of workers were relocated to the service industry, where average wages are 4/5 to that of the manufacturing sector.[3]

Opponents also argue that the ability for firms to increase capital mobility and flexibility has undermined the bargaining power of U.S. workers. In addition to enjoying lower tariffs for shipping goods from Mexico to the United States, multinational corporations also benefited from NAFTA's unprecedented section giving multinational corporations the right to sue governments for infringement of "investment rights".[6] According to the Economic Policy Institute, these investor protections facilitated the movement of manufacturing plants to Mexico.[7] Fifteen percent of employers in manufacturing, communication, and wholesale/distribution shut down or relocated plants due to union organizing drives since NAFTA's implementation.[8] The weakening of rights for the American labor force is one example of the "race to the bottom" theory advocated by most opponents that will result from these trade policies.[3] Ultimately, workers are faced with the dilemma of settling for fewer worker's rights because the firm will always have the ability to relocate to another country, notably Mexico, where they can attain cheaper labor and will face less resistance from workers.[3] However, it is now common that these incentives are enough to cost American laborers their jobs regardless of the status of the labor unions.[3]

http://en.wikipedia.org/wiki/NAFTA%27s_effect_on_United_States_employment


Under Nafta, Mexico Suffered, and the United States Felt Its Pain
(Laura Carlsen is the director of the Americas program at the Center for International Policy)

Nafta is limping toward its 20th anniversary with a beat-up image and a bad track record. Recent polls show that the majority of the U.S. people favors “leaving” or “renegotiating” the model trade agreement.

While much has been said about its impact on U.S. job loss and eroding labor conditions, some of the most severe impacts of Nafta have been felt south of the border.

Nafta has cut a path of destruction through Mexico. Since the agreement went into force in 1994, the country’s annual per capita growth flat-lined to an average of just 1.2 percent -- one of the lowest in the hemisphere. Its real wage has declined and unemployment is up.

As heavily subsidized U.S. corn and other staples poured into Mexico, producer prices dropped and small farmers found themselves unable to make a living. Some two million have been forced to leave their farms since Nafta. At the same time, consumer food prices rose, notably the cost of the omnipresent tortilla.
(more)

http://www.nytimes.com/roomfordebate/2013/11/24/what-weve-learned-from-nafta/under-nafta-mexico-suffered-and-the-united-states-felt-its-pain


NAFTA: 20 years of regret for Mexico
Mark Weisbrot

It was 20 years ago that the North American Free Trade Agreement between the US, Canada, and Mexico was implemented. In Washington, the date coincided with an outbreak of the bacteria cryptosporidium in the city's water supply, with residents having to boil their water before drinking it. The joke in town was, "See what happens, NAFTA takes effect and you can't drink the water here."

Our neglected infrastructure aside, it is easy to see that NAFTA was a bad deal for most Americans. The promised trade surpluses with Mexico turned out to be deficits, some hundreds of thousands of jobs were lost, and there was downward pressure on US wages – which was, after all, the purpose of the agreement. This was not like the European Union's (pre-Eurozone) economic integration, which allocated hundreds of billions of dollars of development aid to the poorer countries of Europe so as to pull their living standards up toward the average. The idea was to push US wages downward, toward Mexico's, and to create new rights for corporations within the trade area: these lucky multinational enterprises could now sue governments directly before a corporate-friendly international tribunal, unaccountable to any national judicial system, for regulations (eg environmental) that infringed upon their profit-making potential.

But what about Mexico? Didn't Mexico at least benefit from the agreement? Well if we look at the past 20 years, it's not a pretty picture. The most basic measure of economic progress, especially for a developing country like Mexico, is the growth of income (or GDP) per person. Out of 20 Latin American countries (South and Central America plus Mexico), Mexico ranks 18, with growth of less than 1% annually since 1994. It is, of course, possible to argue that Mexico would have done even worse without NAFTA, but then the question would be, why?
snip---
It's tough to imagine Mexico doing worse without NAFTA. Perhaps this is part of the reason why Washington's proposed "Free Trade Area of the Americas" was roundly rejected by the region in 2005 and the proposed Trans-Pacific Partnership is running into trouble. Interestingly, when economists who have promoted NAFTA from the beginning are called upon to defend the agreement, the best that they can offer is that it increased trade. But trade is not, to most humans, an end in itself. And neither are the blatantly mis-named "free trade agreements".

http://www.theguardian.com/commentisfree/2014/jan/04/nafta-20-years-mexico-regret


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Reply NAFTA at 20: One Million U.S. Jobs Lost, Higher Income Inequality (Original post)
Zorra Jan 2015 OP
Populist_Prole Jan 2015 #1
WillyT Jan 2015 #2
Scuba Jan 2015 #3
SomethingFishy Jan 2015 #4
Elwood P Dowd Jan 2015 #5
tenderfoot Jan 2015 #6
Starry Messenger Jan 2015 #7
Enthusiast Jan 2015 #8
DeSwiss Jan 2015 #9
FiveGoodMen Jan 2015 #10
Doctor_J Jan 2015 #17
daleanime Jan 2015 #11
valerief Jan 2015 #12
Zorra Jan 2015 #19
MisterP Jan 2015 #13
pampango Jan 2015 #14
B Calm Jan 2015 #15
RiverLover Jan 2015 #16
MrMickeysMom Jan 2015 #18
Ichingcarpenter Jan 2015 #20
Zorra Jan 2015 #21

Response to Zorra (Original post)

Tue Jan 6, 2015, 04:42 PM

1. K&R for truth and visibility

Economic populism and trade should be THE issue going forward.

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Response to Zorra (Original post)

Tue Jan 6, 2015, 04:43 PM

2. K & R !!!

 


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Response to Zorra (Original post)

Tue Jan 6, 2015, 04:49 PM

3. Thank you sir, may I have another.

 

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Response to Zorra (Original post)

Tue Jan 6, 2015, 04:58 PM

4. Woo Hoo.. Bring on the TPP!

It's even better than NAFTA, and if I weren't so fucking ignorant I would know that!

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Response to Zorra (Original post)

Tue Jan 6, 2015, 05:44 PM

5. Yet some here continue to worship this rotten pile of shit

masquerading as "Free Trade". Some even sink so low as to say FDR would support NAFTA just because he supported the more reasonable trade policies of his day. He would have never supported fake trade deals that would ship $15.00 to $20.00 an hour US manufacturing jobs to third world countries that pay $2.00 an hour with no benefits and lax labor and environmental regulations. He would have never supported trade policies that dramatically increased our current account deficits. Fair trade is one thing, NAFTA and all the other ones since then are anything but free and fair trade. They are all corporate and investor scams to drive down wages and line the pockets of the 1%.

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Response to Zorra (Original post)

Tue Jan 6, 2015, 05:49 PM

6. K&R

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Response to Zorra (Original post)

Tue Jan 6, 2015, 05:54 PM

7. Inequality For All

http://m.

Great film.

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Response to Zorra (Original post)

Tue Jan 6, 2015, 06:04 PM

8. Mr. President, the American people do not want another trade deal.

Why would you go against the wishes of the American people?

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Response to Zorra (Original post)

Tue Jan 6, 2015, 06:04 PM

9. Taibbi said it best:

 



- K&R

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Response to DeSwiss (Reply #9)

Tue Jan 6, 2015, 06:08 PM

10. You're right! That IS saying it best!

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Response to DeSwiss (Reply #9)

Tue Jan 6, 2015, 11:23 PM

17. sad but true. can anyone tell me what the party stands for?

 

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Response to Zorra (Original post)

Tue Jan 6, 2015, 06:10 PM

11. K&R....

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Response to Zorra (Original post)

Tue Jan 6, 2015, 06:21 PM

12. But rich people got richer, and that's clearly the most important thing in the world. nt

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Response to valerief (Reply #12)

Wed Jan 7, 2015, 12:45 AM

19. Bingo. That's the primary function of the US Government in the 21st century. nt

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Response to Zorra (Original post)

Tue Jan 6, 2015, 06:37 PM

13. it's working out quite well for those who wrote it

same thing with the Reagan tax cuts: Stockman admitted he wasn't going to turn around the economy, just that they were going to give all the money to their rich patrons

if someone promises you the moon and then nothing comes true, it means they were lying

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Response to Zorra (Original post)

Tue Jan 6, 2015, 07:15 PM

14. Trade with Mexico is 2.9% of our economy. Our trade deficit with Mexico is .03%. That's our problem-

not regressive taxes tilted to the rich, no support (popular or legal) for unions, a weak safety net and lax corporate regulation. Trade with Mexico is our problem.

Our GDP is $17.5 trillion. Our trade with Mexico is $0.5 trillion. Our trade deficit with Mexico is $.054 trillion.

Progressive countries show that trade does not cause inequality. They trade much more than we do.

We have proven that restricting trade does not solve inequality. Republican trade restrictions in the 1920's would have produced excellent equality results instead of the horrendous results that actually happened.

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Response to Zorra (Original post)

Tue Jan 6, 2015, 07:38 PM

15. The whole truth that the overseas du globalists don't want you to know! K &R

 

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Response to Zorra (Original post)

Tue Jan 6, 2015, 07:40 PM

16. Thank you Zorra! And unhappy 20th, NAFTA!

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Response to Zorra (Original post)

Tue Jan 6, 2015, 11:39 PM

18. Good read, Zorra… kicking

The adage that when everyone does better, then everybody does better applies to the labor market. Yes, NAFTA increased trade, however, laborers on either side were not the winners.

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Response to Zorra (Original post)

Wed Jan 7, 2015, 08:59 AM

20. Oh yeah? Mr NAFTA got 4 charts that proves Nada

Thanks for the real data,links and numbers vs meaningless charts and dribble

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Response to Ichingcarpenter (Reply #20)

Wed Jan 7, 2015, 01:14 PM

21. NAFTA is pure Reaganomics, and is a deadly WMD employed against American families by the 1%,

and it is disturbing to see DUers cheerleading for this undeniably destructive plan that has harmed a very large majority of American workers and their families, Mexican workers and their families, and the environment of the planet as well.

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