Reason Magazine has all the goodies:
[Obama] campaign claims a million jobs have vanished because of the deal. That sounds devastating, but over the last 14 years, the American economy has added a net total of 25 million jobs—some of them, incidentally, attributable to expanded trade with Mexico. When NAFTA took effect in 1994, the unemployment rate was 6.7 percent. Today it’s 4.9 percent.
But maybe all the jobs we lost were good ones and all the new ones are minimum-wage positions sweeping out abandoned factories? Actually, no. According to data compiled by Harvard economist Robert Z. Lawrence, the average blue-collar worker’s wages and benefits, adjusted for inflation, have risen by 11 percent under NAFTA. Instead of driving pay scales down, it appears to have pulled them up.
Manufacturing employment has declined, but not because we’re producing less: Manufacturing output has not only expanded, but has expanded far faster than it did in the decade before NAFTA. The problem is that as productivity rises, we can make more stuff with fewer people. That’s not a bad thing. In fact, it’s essentially the definition of economic progress…
Even if the candidates don’t want to acknowledge the gains of the last 14 years, it’s hard to see how they can blame NAFTA for economic troubles in Ohio or elsewhere. The whole idea was to eliminate import duties in both the United States and Mexico (as well as Canada). What everyone forgets is that we got the best of that bargain, since our tariffs were very low to begin with.
“Mexico had very good access to the U.S. market” already, says Charlene Barshefsky, who was U.S. Trade Representative in the Clinton administration. “What NAFTA did was level the playing field.”
Critics complain that while exports to Mexico have risen, imports from Mexico have risen even faster.But that’s not because we embraced free trade. It’s because our economy has been more robust than theirs. Prosperous consumers buy more goods, from both home and abroad, than struggling consumers. Absent NAFTA, the trade imbalance with Mexico would not be smaller. It would be bigger.
This anti-NAFTA and anti-free trade rhetoric isn’t just counterproductive, I even consider it to be dangerous. Obama and Clinton, but especiallay Obama, are giving people the impression that free trade is wrong, NAFTA is wrong, etc. Others are influenced by it and this will only help the anti-globalization / free trade movement in the US (which is a bulwark of raving lefties).
Obama should be honest about this matter: stop complaining, NAFTA is good. Adjust.
If you’re not convinced, there’s more, this time at USA Today.
The reality is that NAFTA has relatively little to do with either the overall job losses or job gains. China is a far larger factor. But the number that best displays the nonsensical nature of the debate is 66% — the increase in the manufacturing output of American industry since 1993.
It’s impossible to look at an economy that has increased its manufacturing output so dramatically while simultaneously cutting its manufacturing workforce and not see a much larger force at work than NAFTA.
That force has been the unprecedented and sweeping gains in worker productivity that have allowed U.S. companies to churn out more goods with fewer people. Some of this has come from outsourcing the most labor-intensive parts of manufacturing, particularly to Asia. But much of it is from the use of more automated systems for assembly lines and high-tech inventory management.
Put another way, the main job killer of the past 14 years has not been the “giant sucking sound” of jobs going to Mexico, as enunciated by Ross Perot. Rather it has been that giant humming sound of machines replacing humans.
The only real answer to the problem of declining employment in manufacturing lies in educating younger workers and retraining older ones. This is, to be sure, a big challenge and a tough sell politically. American schools continue to underperform, particularly in technical knowledge. And most federal retraining programs have failed.
Any other answer, however, is simply not responsive to the problem — a workforce with too many people lacking the skills to prosper in a global economy and climb into the middle class. Fixing this is both essential for the economy and vital to U.S. democracy.
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