NAFTA and Immigration

Immigration Flood Unleashed by NAFTA's Disastrous Impact on Mexican Economy

by Roger Bybee and Carolyn Winter Published on Tuesday, April 25, 2006

The recent ferment on immigration policy has been so narrow that it has excluded the real issue: family-sustaining wages for workers both north and south of the border. The role of the North American Free Trade Agreement and misnamed 'free trade' has been scarcely mentioned in the increasingly bitter debate over the fate of America's 15 million illegal aliens, some of whom are from Mexico.  NAFTA was sold to the American public as the magic formula that would improve the American economy at the same time it would raise up the impoverished Mexican economy. The time has come to look at the failures of this type of trade agreement before we engage in more and lower the economic prospects of all workers affected. While there has been some media coverage of NAFTA's ruinous impact on US industrial communities, there has been even less media attention paid to its catastrophic effects in Mexico: NAFTA, by permitting heavily-subsidized US corn and other agri-business products to compete with small Mexican farmers, has driven the Mexican farmer off the land due to low-priced imports of US corn and other agricultural products. Some 2 million Mexicans have been forced out of agriculture, and many of those that remain are living in desperate poverty. These people are among those that cross the border to feed their families. (Meanwhile, corn-based tortilla prices climbed by 50%. No wonder many so Mexican peasants have called NAFTA their 'death warrant.' NAFTA's service-sector rules allowed big firms like Wal-Mart to enter the Mexican market and, selling low-priced goods made by ultra-cheap labor in China, to displace locally-based shoe, toy, and candy firms. An estimated 28,000 small and medium-sized Mexican businesses have been eliminated. Wages along the Mexican border have actually been driven down by about 25% since NAFTA, reported a Carnegie Endowment study. An over-supply of workers, combined with the crushing of union organizing drives as government policy, has resulted in sweatshop pay running sweatshops along the border where wages typically run 60 cents to $1 an hour. So rather than improving living standards, Mexican wages have actually fallen since NAFTA. The initial growth in the number of jobs has leveled off, with China's even more repressive labor system luring US firms to locate there instead. But Mexicans must still contend with the results of the American-owned 'maquiladora' sweatshops: subsistence-level wages, pollution, congestion, horrible living conditions (cardboard shacks and open sewers), and a lack of resources (for streetlights and police) to deal with a wave of violence against vulnerable young women working in the factories. The survival (or less) level wages coupled with harsh working conditions have not been the great answer to Mexican poverty, while they have temporarily been the answer to Corporate America's demand for low wages. With US firms unwilling to pay even minimal taxes, NAFTA has hardly produced the promised uplift in the lives of Mexicans. Ciudad Juarez Mayor Gustavo Elizondo, whose city is crammed with US-owned low-wage plants, expressed it plainly: "We have no way to provide water, sewage, and sanitation workers. Every year, we get poorer and poorer even though we create more and more wealth." Falling industrial wages, peasants forced off the land, small businesses liquidated, growing poverty: these are direct consequences of NAFTA. This harsh suffering explains why so many desperate Mexicans -- lured to the border area in the false hope that they could find dignity in the US-owned maquiladoras -- are willing to risk their lives to cross the border to provide for their families. There were 2.5 million Mexican illegals in 1995; 8 million have crossed the border since then. In 2005, some 400 desperate Mexicans died trying to enter the US. NAFTA failed to curb illegal immigration precisely because it was never designed as a genuine development program crafted to promote rising living standards, health care, environmental cleanup, and worker rights in Mexico. The wholesale surge of Mexicans across the border dramatically illustrates that NAFTA was no attempt at a broad uplift of living conditions and democracy in Mexico, but a formula for government-sanctioned corporate plunder benefiting elites on both sides of the border. NAFTA essentially annexed Mexico as a low-wage industrial suburb of the US and opened Mexican markets to heavily-subsidized US agribusiness products, blowing away local producers. Capital could flow freely across the border to low-wage factories and Wal-mart-type retailers, but the same standard of free access would be denied to Mexican workers. Meanwhile, with the planned Central American Free Trade Agreement with five Central American nations coming up, we can anticipate even greater pressure on our borders as agricultural workers are pushed off the land without positive, alternative employment opportunities. People from Guatemala and Honduras will soon learn that they can't compete for industrial jobs with the most oppressed people in say, China, by agreeing to lowering their wages even more. Further, impoverished Central American countries don't have the resources to deal with the pollution and crime that results from moving people from rural areas to the city, often without their families. Thus far, we have been presented with a narrow range of options to cope with the tide of illegal immigrants living fearfully in the shadows of American life. Should they simply be walled off and criminalized, as Sensenbrenner and House Republicans suggest? The Sensenbrenner option seeks to exploit the sentiment that illegal immigrants entering the US -- rather than US corporations exiting the US for Mexico and China -- are the primary cause of falling wages for most Americans. The Bush version is only slightly different, envisioning the "illegal immigrants" as part of a vast disposable pool of cheap labor with no meaningful rights on the job or even the right to vote, to be returned to Mexico upon the whim of their employers. Yet there is another well-known path of economic and social integration that has been ignored in the debates over immigration in the US: the one followed by the European Union and their "social charter" calling for decent wages, health care, and extensive retraining in all nations. Before then-impoverished nations like Spain, Greece and Portugal were admitted, they received massive EU investments in roads, health care, clean water, and education. The implementation of democracy, including worker rights, was an equally vital pre-condition for entry into the EU. The underlying concept: the entire reason for trade is to provide improved lives across borders, not to exploit the cheapest labor and weakest environmental rules. We need to question the widely-held assumption that what benefits American corporations benefits Mexican workers and American workers. An authentic plan for growth and development isn't about further enriching Wall Street, major corporations, and a handful of Mexican billionaires; it is about the creation of family-supporting jobs. It is also about a healthy environment, healthy workers, good education, and ordinary people being able to achieve their dreams. The massive tide of illegal immigration from Mexico is merely one symptom of an economic arrangement where human needs -- not maximum profits-- are not the ultimate goal but a subject of neglect. Neither a massive, shameful barrier at the border nor a disposable guest-worker program will address the problems ignited by NAFTA.  Programs providing stable, decent employment, modern transportation, clean water, and environmental cleanup are needed to take the place of the immense NAFTA failure and allow Mexicans to live decent, hopeful lives in their native land. But such an effort is imaginable only if the aim is truly mutual uplift for all citizens in both nations, instead of the NAFTA-fueled race to the bottom. Roger Bybee and Carolyn Winter are Milwaukee-based writers and activists. They can be reached at winterbybee@earthlink.net.  -------------------------------  Lost Jobs and Migration: The Real Cost of the Peru Free Trade Agreement By David Bacon November 2007 Oakland, California - In the 2006 elections, aspiring Democrats attacked the Bush administration's free trade policies, and more than 20 new members of Congress were elected, giving the Democratic Party its new majority in the House of Representatives. Yet two weeks ago, Democratic Party leaders urged those same members of Congress to vote for a new free trade agreement with Peru. Most rebelled, but enough Democrats voted for the Bush administration proposal, along with every Republican, to push it through the House. The Senate is expected to take up the agreement any day now. Why would Democrats support the administration's trade policy, when campaigning against it helped them win in the last election? Try money. Fourteen years ago, the promoters of the North American Free Trade Agreement promised that free trade would produce jobs. We hear the same claim today for the agreement with Peru, as well as the other agreements Bush has negotiated with Colombia, Panama and South Korea. NAFTA certainly produced some winners. Large corporations moved high-paying jobs south of the US/Mexico border to cut their labor costs and increase their profits. Mexico enriched U.S. tied billionaire oligarchs who in turn helped rig the already corrupt election process to put in a new generation of corrupt and pliable politicians. But rising profits did not produce jobs. Jobs were lost on both sides of the border and wages were driven down. By November 2002, the US Department of Labor had certified 507,000 workers for extended unemployment benefits because their employers had moved their jobs south of the border. The Department of Labor stopped counting NAFTA job losses, but the Economic Policy Institute in Washington, DC, estimated that NAFTA had eliminated 879,000 jobs. That was five years ago. But US job loss didn't produce job increases in Mexico - it eliminated them there too. In NAFTA's first year, more than a million jobs disappeared in the economic crisis NAFTA caused. To attract investment in Mexico, the treaty required privatization of factories, railroads and other large enterprises, leading to more layoffs of Mexican workers. On the border, Ford, General Electric and other corporations built factories and moved production from the United States to take advantage of low wages. But more than 400,000 maquiladora workers lost their jobs in 2000-2001 when US consumers cut back spending in the last recession, and companies found even lower wages in other countries, such as El Salvador or China. Before NAFTA, US auto plants in Mexico had to buy parts from Mexican factories, which employed thousands of local workers. But NAFTA let the auto giants bring in cheaper parts from their own subsidiaries, so Mexican auto parts workers lost their jobs, too. The profits of US grain companies, already subsidized under the US farm bill, went higher when NAFTA allowed them to dump cheap corn on the Mexican market, while at the same time it forced Mexico to cut its agricultural subsidies. As a result, small farmers in Oaxaca and Chiapas couldn't sell corn anymore at a price that would pay the cost of growing it. When corn farmers couldn't farm, or auto parts and maquiladora workers were laid off, where did they go? They became migrants. The real, dirty secret of trade agreements is displacement. During the years NAFTA has been in effect, more than six million people from Mexico have come to live in the United States. They didn't abandon their homes, families, farms and jobs willingly. They had no other option for survival. Farmers and workers throughout Central America, who saw what NAFTA did to Mexicans, have protested, marched and even fought in the streets of El Salvador, Guatemala and most recently Costa Rica, to stop ratification of the Central American Free Trade Agreement. Now that rebellion is spreading to Peru. No major union or organization of poor farmers wants the trade agreement that the Bush administration negotiated. No wonder. They don't want to say goodbye to their families and start looking for work in Los Angeles, San Francisco or New York. To get the Peru treaty through Congress, its supporters claim it will protect labor rights. Peruvian unions don't believe this promise any more than they believe it will bring them jobs. Today a huge mining corporation, Grupo Mexico, has provoked a strike by demanding that miners work 12 hours a day instead of eight in Peru's largest copper mine. The Peruvian government supports the company, because it believes longer hours and lower wages will attract more foreign investment. Since NAFTA passed, the same company has forced strikes and cut thousands of jobs at its Mexican mines to cut labor costs, and the government there has also cooperated. NAFTA's toothless labor rights protections never stopped union busting and job elimination in Mexico. They won't in Peru either.