Thursday, June 26, 2008

That giant sucking sound

Before NAFTA became an ugly reality, H. Ross Perot was warning whoever would listen that if it became law, there would be massive job loss in the US. Of course, he probably didn't give a damn about what happened to jobs in Mexico, but the same warnings were being uttered by voices in the wilderness. What we are seeing is the consequences of neoliberalism - the race to the bottom with regard to wages as the money men threaten to move their factories elsewhere. As I noted last November:
NAFTA boosted the profit margins of some corporations who could cut down labor costs, and yes, Mexico now has more billionaires than ever. Unfortunately, Mexico (and also the US) has merely become even more stratified since NAFTA went into effect. Funny how none of that wealth ever seems to "trickle down." Just a few clips from the article for your consideration:
By November 2002, the US Department of Labor had certified 507,000 workers for extended unemployment benefits because their employers had moved their jobs south of the border. The Department of Labor stopped counting NAFTA job losses, but the Economic Policy Institute in Washington, DC, estimated that NAFTA had eliminated 879,000 jobs. That was five years ago.

But US job loss didn't produce job increases in Mexico - it eliminated them there too. In NAFTA's first year, more than a million jobs disappeared in the economic crisis NAFTA caused.

To attract investment in Mexico, the treaty required privatization of factories, railroads and other large enterprises, leading to more layoffs of Mexican workers.

On the border, Ford, General Electric and other corporations built factories and moved production from the United States to take advantage of low wages. But more than 400,000 maquiladora workers lost their jobs in 2000-2001 when US consumers cut back spending in the last recession, and companies found even lower wages in other countries, such as El Salvador or China.

Before NAFTA, US auto plants in Mexico had to buy parts from Mexican factories, which employed thousands of local workers. But NAFTA let the auto giants bring in cheaper parts from their own subsidiaries, so Mexican auto parts workers lost their jobs, too.

The profits of US grain companies, already subsidized under the US farm bill, went higher when NAFTA allowed them to dump cheap corn on the Mexican market, while at the same time it forced Mexico to cut its agricultural subsidies. As a result, small farmers in Oaxaca and Chiapas couldn't sell corn anymore at a price that would pay the cost of growing it.

When corn farmers couldn't farm, or auto parts and maquiladora workers were laid off, where did they go? They became migrants.

The real, dirty secret of trade agreements is displacement. During the years NAFTA has been in effect, more than six million people from Mexico have come to live in the United States. They didn't abandon their homes, families, farms and jobs willingly. They had no other option for survival.
Hat tip to Earthside, which has all sorts of happy, uplifting economic news this evening.

No comments:

Post a Comment