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During this week’s presidential debate, GOP hopeful Donald Trump called the North American Free Trade Agreement “the worst trade deal maybe ever.” And it’s worth noting that if the candidate gets his way and reworks NAFTA, the changes could provide a partial remedy to the U.S.’s illegal immigration problem.
Trump is being labeled as an anti-trade protectionist for pointing out that NAFTA is partially responsible for an exodus of some manufacturing jobs from the U.S. to Mexico where labor is considerably cheaper.
It’s been difficult for economist to pin down exactly how much NAFTA has affected the U.S. labor market— conservative estimates suggest that around 700,000 production jobs have been exported to Mexico since the trade deal’s 1994 finalization.
But what is perhaps more important than the jobs lost to NAFTA is how it simultaneously forced an uptick of illegal immigration to the U.S.
When NAFTA came on the scene, a huge portion of the Mexican economy was made up of small farm operations whose biggest cash crop was corn.
After the trade agreement was signed, U.S. corn heavily subsidized by the federal government began flowing into Mexico. The Mexican government, which also previously subsidized its corn crops, realized that its farmers would never be able to compete with government-funded factory farms in the U.S. and quickly ended its subsidies.
As a result thousands of Mexican farmers and the workers they employed rapidly lost their livelihoods.
Many of them flooded into Mexican cities in search of the new factory jobs promised by NAFTA proponents. Unfortunately, they quickly learned that the jobs weren’t all that great and that there weren’t enough employment opportunities to accommodate all of the small farmers shut down by the trade deal.
The benefit of essentially annexing Mexico as a low-wage industrial park for the U.S. was two-fold for major U.S. corporations: First, it guaranteed an endless supply of desperate workers willing to take low-wage factory jobs. At the same time, it made U.S.-based corporate operations more profitable by making it increasingly difficult for American workers to demand better pay without fear of having their positions eliminated and shipped to Mexico.
For Mexican workers, who lacked many labor protections to begin with, the problem of wage stagnation has obviously been far worse.
Sociology professor Alejandro Portes explained the result thusly back in 2006:
The response of peasants and workers thus displaced has been clear and consistent: they have headed north in ever greater absolute numbers. Before NAFTA, undocumented Mexican immigration came mainly from four or five Mexican states and a limited number of mostly rural municipalities. Since NAFTA, migrants have originated in all Mexican states, practically all municipalities, and cities as well as towns and villages. A number of formerly vibrant places are now ghost towns, all their able adults having gone abroad; about one-third of all Mexican municipalities have lost population during the last decade, some by half or more. The counterpart of this hollowing out of the Mexican countryside is the growth of the Mexican migrant population in the U.S., much of it undocumented. From a purely regional presence in the west and southwest, it has become a truly national phenomenon. States that had barely a handful of “Hispanics” in 1990 now count a sizable Hispanic population. In Georgia, for example, the Latin-origin population went from 1.7 percent in 1990 to 5.3 percent in 2000, a 312 percent increase due to an inflow of 300,000 persons, overwhelmingly from Mexico. Cities like Charlotte, North Carolina, whose “Hispanics” in 1990 consisted of a few wealthy Cuban and South American professionals, now have upwards of 80,000, mostly undocumented Mexican laborers.
Ten years later, we’ve seen those numbers increase even more dramatically. In 2014, there were nearly 6 million illegal immigrants from Mexico living in the U.S.