NAFTA at 25: Nearly 5M American Manufacturing Jobs Lost, Stagnant Wages

As the North American Free Trade Agreement (NAFTA) turns 25 this year, American manufacturing jobs and U.S. workers’ wages continue trying to come back after more than a decade of massive layoffs and stagnant pay.

During its enactment, free trade proponents claimed NAFTA would create a million U.S. jobs in its first five years. Not only did these job numbers never come to fruition, but NAFTA has more easily allowed multinational corporations to outsource and offshore American jobs to Canada and Mexico.

“I believe that NAFTA will create 200,000 American jobs in the first two years of its effect … I believe that NAFTA will create a million jobs in the first five years of its impact,” former President Bill Clinton said in 1993.

Instead, nearly a million American jobs have been certified by the federal government as being lost directly due to NAFTA, according to data gathered by Public Citizen. These are only the U.S. jobs that the Trade Adjustment Assistance (TAA) program recognizes as being lost to free trade and does not indicate the actual number of jobs lost.

For example, free trade with Mexico, alone, has eliminated at least 700,000 American jobs as states in the Rust Belt have been hit the hardest. Those states and the number of American workers impacted include:

• 14,500 American workers displaced in Wisconsin
• 43,600 American workers displaced in Michigan
• 2,600 American workers displaced in West Virginia
• 26,300 American workers displaced in Pennsylvania
• 34,900 American workers displaced in Ohio
• 34,300 American workers displaced in New York
• 6,500 American workers displaced in Iowa
• 24,400 American workers displaced in Indiana
• 34,700 American workers displaced in Illinois

As trade deficits have soared nearly 600 percent since NAFTA’s enactment, close to five million American manufacturing jobs were eliminated from the U.S. economy, encompassing the net shuttering of nearly 50,000 U.S. manufacturing facilities. This is a combined outcome from the U.S. entering NAFTA and entering the World Trade Organization (WTO) in 1995, as well as China entering the WTO in 2000.

Since 1994, California has lost more than 400,000 American jobs. Meanwhile, New York saw nearly 400,000 American jobs eliminated since 1994 and Texas’s economy eliminated close to 85,000 U.S. jobs.

Most famously, the state of West Virginia has been enormously crippled by free trade and multilateral trade deals like NAFTA. One former steel town in West Virginia lost 94 percent of its steel jobs because of NAFTA, with nearly 10,000 workers in the town being displaced from the steel industry.

A worker in West Virginia told The Independent that the job creation promises of free traders have failed to ever replace the high-paying jobs lost to NAFTA.

“They talk about creating all these jobs,” he said. “But they’re just retail jobs that pay minimum wage, or just above.”

When it comes to U.S. wages, NAFTA has had a similar impact. As of 2017, about two out of every five American manufacturing workers who lost their jobs to NAFTA had their wages cut, Bureau of Labor Statistics data reveals.

“About one out of every four took a pay cut of greater than 20 percent,” Public Citizen’s analysis concludes. “For the average worker earning the median manufacturing wage of $39,500 per year, this meant an annual loss of at least $7,900.”

At the same time, billionaire corporate executives have enjoyed 15 times the wage growth compared to America’s bottom 90 percent since 1979, when America’s middle class was earning on average about $29,600 a year. Today, they are earning only about $6,600 more annually.

Between 1979 and 2017, the wages of the bottom 90 percent — the country’s working and lower middle class — have grown by only about 22 percent, Economic Policy Institute (EPI) researchers find.

Compare that small wage increase over nearly four decades to the booming wage growth of America’s top one percent, who have seen their wages grow more than 155 percent during the same period.

The top 0.01 percent — the country’s billionaire class — saw their wages grow by more than 343 percent in the last four decades, more than 15 times the wage growth of the bottom 90 percent of Americans.

NAFTA and free trade proponents also claimed that mass illegal immigration to the U.S. from Mexico would slow because the trade agreement would lead to better working conditions in that country.

The promise, though, did not pan out. Between 1995 and 2008, illegal border crossings at the U.S.-Mexico border averaged more than a million a year. Current trends of illegal immigration at the southern border indicate that illegal border crossings will hit the highest level in a decade, potentially totaling 600,000.

John Binder is a reporter for Breitbart News. Follow him on Twitter at @JxhnBinder.