August 23, 2017

Trade negotiators can’t overcome wages that are one-tenth those in the U.S., but consumers can, says author of new book.

Philadelphia -- The United States has opened talks with Mexico and Canada to renegotiate the North American Free Trade Agreement.  At issue is the chronic trade deficit with Mexico, with the U.S. importing some $60 billion more in goods from Mexico than it exports there.  Those lost dollars mean lost jobs and lower wages, says James A. Stuber, author of the new book, What if Things Were Made in America Again. 

According to Stuber, the negotiations are not addressing the real problem with NAFTA: that wages are one-tenth their U.S. counterparts and the costs of compliance with workplace health and safety and environmental standards are effectively avoided. 

“That is the fundamental problem with NAFTA, which was sold to the American people as creating a new Mexican middle class that would buy automobiles and air conditioners from the United States.” Stuber says.  “But Mexico cannot raise wages, because it is caught in the relentless worldwide competition for the lowest wage.  If Mexico raises wages above the world-wide market-clearing price, it will lose the jobs.” 

The effect, says Stuber, is job and wage losses that outweigh any benefits of lower prices. “Most consumers are also workers,” Stuber says, “and under free trade they may see the low prices of foreign goods more than offset by a reduction in their wages.  But that is just the average family.  The real harm comes to the families who lose their jobs when the factory moves to Mexico.  They see their pay go from $28 an hour with benefits to $12 or $14 without benefits.  Even manufacturing workers who keep their jobs see similar wage reductions under the threat of sending the production offshore.  At that level, even with both parents working, a family cannot make ends meet: in an average American city like Akron, Ohio, both parents in a family of four must make $23 an hour just to survive week to week.  And it is not just families; whole communities are being knocked off their feet.”

Stuber refutes the idea that most of the jobs lost since NAFTA were lost to technology and higher labor productivity.  “The falsehood of that assertion is exemplified by the Delco plant that stands empty in Flint, Michigan, with its replacement plant operating in Reynosa, Mexico,” Stuber says.  “The jobs weren’t lost to technology, they were lost when they were sent south.  Companies are going wherever they can find the lowest wages, highest subsidies, and lowest health, safety, and environmental requirements.”

“Fortunately, it is not trade negotiators, but American consumers who hold the key to solving this problem,” says Stuber.  “If Nabisco and Carrier know that American consumers won’t buy cookies and air conditioners made in Mexico, they won’t move their U.S.-bound production there.  And if Ford knows that American consumers won’t buy Escorts made in China, they won’t move their U.S.-bound production there.  Through the power of consumer choice, we can stop sending jobs abroad, and start bringing them home.  And so, the subtitle of my book, ‘How Consumers Can Rebuild the Middle Class by Buying Things Made in American Communities.’”

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The author, Jim Stuber, is available for interview via telephone or Skype, and in person in Philadelphia, New York, or Washington, D.C.  To arrange for an interview or to obtain further information, he may be contacted directed at (610) 608-5074 or james.stuber@themadeinamericabook.com.