Getting It Wrong On NAFTA

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USA Today, hardly a rightwing news outlet, points out that both Hillary Clinton and Barack Obama have it completely wrong when they attack NAFTA. That treaty is not causing the net loss of jobs, it has nothing to do with the real reasons the manufacturing landscape has changed. Rather it is productivity gains that have managed to cut manufacturing employment yet increase the total amount of US manufacturing output by a stunning 66% since 1993. Yes, this is being done with fewer workers and there are real issues. But NAFTA is not one of them.

NAFTA opponents point to the 2.4 million U.S. manufacturing jobs that have disappeared since NAFTA took effect in 1994, a drop of about 14%. In Ohio, site of Tuesday's hotly contested primary, manufacturing jobs are down by nearly 200,000, or 20%, during the same time.

NAFTA supporters — this page among them — usually respond by pointing out that 39 million jobs outside of manufacturing have been created in that time in the USA. Even Ohio has seen a net gain of 900,000 jobs, including 60,000 in finance, 80,000 in professional services and almost 190,000 in health care.

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.

USA Today points to an educational system that is failing to turn out graduates with technical skills. They are right about this, look at the trouble companies are having finding skilled machinists. They say the right ideas are to educate and retrain displaced, low-skilled workers, not to erect trade barriers.

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4 Responses to Getting It Wrong On NAFTA

  1. 49 North says:

    The Democratic candidates increasing rhetoric about NAFTA has not gone unnoticed in Canada.  It has drawen comment from politicians and business. This comment uniformly considers any such proposed action on the part of a new US Democratic administration as bizzare. The US greatly benefits from trade with Canada , and both sides have much to loose .  Aside from the volume of trade and jobs in both countries, Canadian resources are critical to US strategic interests. At present Canada cannot curtail free market flow of oil, gas, to the US.  Remove NAFTA and Canadian economic nationalists, greens and others can then limit US access or sell elsewhere at more advantageous terms. These could just be the start of a long list of products the US may find difficult to purchase such as, water, wood, potash, nickel, uranium etc. China already is an avid purchaser of these reources. Canada would not be immune to export pain, particulalry in jobs linked to auto parts but this industry is already struggling to adapt to economic effects of a tighter US border and higher Canadian dollar.
    While the average Canadian may naturally favour the Democrats, confusing them with its own mild leftist Liberal Party, a Demorcratic victory may not be in the interests of the North American economy and security.

  2. feeblemind says:

    American Thinker is reporting that a senior Obama aide (Goolsebee) has gone to Canada and told the Canadian Gov’t. that Obama is demagoguing the NAFTA issue and has no intention of renegotiating the treaty. The Obama camp is denying that he went, but the Canadian Gov’t  has confirmed he was just there. As AT has put it, this is an incident that is ready to explode.

  3. terrence says:

    El Rushbo just quoted someone who said, in effect, ‘Obama is not even in office and he is screwing up international affairs’, as is Billary. These bozos know nothing about international affairs, and the impact of their political sleaze.   

  4. sam says:

    The only sucking sound is the sound of all the immigrants (legal and otherwise) entering the country looking for work.

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