Tuesday, August 14, 2007

NAFTA: sweatshops.... 34 to 58 percent of decline in manufacturing ... 1,000,000 net mfg jobs lost .... 23-77% reduction in pay ...

The Tail End of Free Trade | A Preliminary Evaluation of the Impact of NAFTA on the Manufacturing Sector | by Jacob Hill / August 10th, 2007
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One of the most drastic and disturbing results of NAFTA has been a boom in the Mexican maquiladora sector. In the U.S. and the developed world, these manufacturing units would deservedly be known as sweatshops. ... The sweatshop problem has been well known since the inception of NAFTA. In 1995, just a year after the implementation of the free trade agreement, The New York Times reported on the exploitation of Mexican young girls by the maquiladoras. U.S. companies, often working through third parties, pay children as young as 14 years of age wages under 40 cents per hour. Maquiladoras located within walled and barbed wired free trade zones are not only exempt from import taxes, but are also exempt from state and local imposts for up to 10 years. ... As a result, sweatshop workers possess almost no leverage to negotiate improved labor rights. Refusing to work overtime, taking breaks (in spite of the fact that they are required by un-enforced law), illness, visits to the doctor, and pregnancy rests have all been recorded as reasons for job terminations in the maquiladora sector. ...
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There is no denying the fact that NAFTA has generated an impressive net growth regarding exports from the U.S. Since the pact’s inception, according to the EPI, U.S. outflows to Mexico have increased 114 percent and exports to Canada have risen 60 percent. On the other hand, imports from Mexico to the U.S. have risen by 274 percent, while those from Canada have grown by 90 percent. As a result, the U.S.’s combined $20.6 billion trade deficit to Mexico and Canada in 1993 has ballooned in the post-NAFTA era by 538 percent to $110.6 billion in 2004 (figures provided in inflation-adjusted 1996 dollars by the EPI). This deficit is a signal of a growing U.S. dependence on the health of external economies and has affected several of the nation’s key historic industries. ...

There is a direct correlation between the growth of the U.S.’s trade deficit and the rise in unemployment throughout the U.S. manufacturing sector over the last 13 years. According to international trade and macroeconomics expert Dr. L. Josh Bivins, growing trade deficits are responsible for 34 to 58 percent of the decline in manufacturing unemployment. When one looks at the whole picture, NAFTA is responsible for a 77 percent increase in jobs supported by domestic exports and a 147 percent increase in jobs displaced by imports.

During the first 10 years of NAFTA, 942,459 jobs were created in the U.S. by the agreement, but 1,956,750 jobs have been nullified by it, resulting in an overall net loss of more than 1,000,000 jobs. A report by Public Citizen found that workers in the U.S. who have lost high-wage jobs with benefits in the manufacturing sector have only been able to find “new work in service sector positions that typically pay 23-77 percent less than their previous wages and offer few or no benefits.” Among the hardest hit in the U.S. have been Latino workers. According to the report by the Labor Council for Latin American Advancement, 47 percent of the total number of workers who received federal assistance under a program for workers certified as having lost jobs in 1999 as a direct result of NAFTA, were Latino. ...

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