The winners in global trade Are the rich.

It is not surprising that the rich and the people and think tanks that they hire like to promote free trade; it makes them richer and the poor poorer.

Mexican Employment, Productivity and Income a Decade after NAFTA

NAFTA has produced a disappointingly small net gain in jobs in Mexico. Mexican agriculture has been a net loser in trade with the United States, and employment in the sector has declined sharply. Real wages for most Mexicans today are lower than when NAFTA took effect.

Main Findings

  • NAFTA has produced a disappointingly small net gain in jobs in Mexico. Data limitations preclude an exact tally, but it is clear that jobs created in export manufacturing have barely kept pace with jobs lost in agriculture due to imports. There has also been a decline in domestic manufacturing employment, related in part to import competition and perhaps also to the substitution of foreign inputs in assembly operations. About 30 percent of the jobs that were created in the maquiladora assembly plants in the 1990s have since disappeared. Many of these operations were relocated to lower- wage countries, particularly China.
  • Mexican agriculture has been a net loser in trade with the United States, and employment in the sector has declined sharply. U.S. exports of subsidized crops such as corn have depressed agricultural prices in Mexico. The rural poor have borne the brunt of adjustment to NAFTA and have been forced to adapt without adequate government support.
  • Productivity has increased in Mexico over the last decade. NAFTA likely played a significant role, because Mexico cut tariffs deeply and was exposed to competition from its giant neighbors. The desirable growth in productivity may have had the unwanted side effect of reducing the rate of job growth, since fewer new jobs were created as workers already on payrolls produced more.
  • Real wages for most Mexicans today are lower than when NAFTA took effect. The stunning setback in wages is mainly attributable to the peso crisis of 1994-1995. However, during the NAFTA period, productivity growth has not translated into wage growth, as it did in earlier periods in Mexico. Mexican wages are also diverging from, rather than converging with, U.S. and Canadian wages.

Source

Poor Mexico is so far from God and so close to the United States.

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