General Discussion
In reply to the discussion: NAFTA at 20: One Million U.S. Jobs Lost, Higher Income Inequality [View all]jeff47
(26,549 posts)Those "structural misalignments in the Mexican economy" include things like NAFTA destroying Mexico's agricultural sector.
US farms were highly automated and industrialized, and received large subsidies thanks to Iowa's caucuses. Mexican farms were not automated and industrialized. As a result, Mexican farms employed a lot more people than US farms. That lead to a higher cost for commodity products like corn in Mexico.
Enter NAFTA. US farmers crushed Mexican farmers while not producing many jobs in the US - remember our farms are highly automated and industrialized. That lead to massive unemployment in Mexico. Mexico responded with what your report labels as the "peso crisis". That, coupled with the large number of now-unemployed Mexicans lead to a massive drop in wages in Mexico, which made it much more attractive to close the US factory and open a Mexican factory.
Btw, most analysis supporting NAFTA seems to think factories appear overnight and are fully staffed the following day. That isn't the case.
Also, your report attempts to bury the most significant numbers with lame excuses. Trade with Mexico goes from -$1.4 to -$37.1 billion?? That's kinda a big fucking deal.
Finally, your report is 10 years old. Remember the part about factories not appearing overnight?