How Detroit Benefits from NAFTA

[Octafish]

22. NAFTA Has Decimated Detroit

JAMES MORELAND
MARCH 22, 2015

Detroit was once a manufacturing giant—the 4th largest city in the United States, with a high employment rate and brimming with blue collar jobs. Now its unemployment rate hovers above 16 percent, and its population has shrunk so now it is only the 18th largest city. This quick erosion of the tax base has left Detroit with $18 billion in debt and no hope of recovery in sight. This caused the city of Detroit to declare bankruptcy.

For over five years our economy has struggled to regain strength lost due to the “great recession.” Unemployment remains high while workers’ wages remain low. Concerns about pensions and retirement savings have driven retirees back into the workplace and encourage workers to put off their retirement.

The cause of our economic stability has been decades of failed “free trade” policies which decimate our manufacturing base and continue to lead us down the wrong track. The U.S. must begin to reconsider its trade policies in order to be competitive and strengthen our manufacturing in order to regain our economic strength. We must encourage our elected officials in Congress and the White House to amend or eliminate detrimental trade policies.

The first of the trade policies that needs to be reconsidered is the North American Free Trade Agreement, or NAFTA, which took effect on Jan. 1, 1994. At the time, President Bill Clinton assured Americans it would be a way to secure American jobs in the future. “NAFTA means jobs, American jobs and good-paying American jobs,” Clinton said on the day he signed the agreement. Since then, however, it has created massive trade deficits and encourages companies to move jobs across the border.

In 1994 Michigan had 288,700 people working in auto manufacturing. Now, according to the most recent data available from the Bureau of Labor Statistics, approximately 150,500 people have auto jobs in Michigan. That is a loss of over 130,000 jobs in 18 years. Even since 2004, automotive manufacturing jobs dropped from 1.1 million to around 700,000 jobs in the U.S.

[font color="red"]What NAFTA has done is benefit the 1% at the expense of everyone else. Companies will invest where they believe they can make the most profit, and even though American manufacturing is at its highest efficiency ever, it can’t compare to the profits made south of the border where the cost per hour is far less than in the U.S.[/font color]

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