> EPI and company have not done a great job coordinating their arguments.
> Brad
> raises the right questions, but the answers are not as simple as he
> pretends
> (he also knows better). For example, in Mexico, the average productivity
> is
> one third that of the U.S.. This doesn't mean the marginal productivity is
> one third. Hence the claim of 3 jobs created in Mexico for every one lost
> in
> the U.S. is bullshit on its face. In fact, since the plants in Mexico are
> new, and the ones shut in the U.S. are old, it is entirely possible that
> fewer jobs were created in Mexico than were lost in the U.S.
>
>
> In terms of larger effects, Brad wants to treat Mexico's financial crisis
> as
> a random event that just fell out of the sky. The crisis was a direct
> result
> of Mexico deliberately keeping an over valued currency prior to NAFTA's
> approval, in order to satisfy political needs in both nations. Brad also
> ignores the displacement from agriculture and traditional industry that
> has
> taken place in Mexico, partly as a result of NAFTA. While there are
> clearly
> more jobs along the border than there otherwise would have been, there are
> fewer jobs in indigenous Mexican plants. These jobs were more likely to be
> union and higher paying. While many Mexicans are obviously willing to
> leave
> the countryside to work in Maquidoras, one reason they are anxious to go
> is
> the damage to the agricultural sector caused by U.S. exports.
>
> To make a long story short, I think it's easy to see that U.S. workers
> have
> been hurt by NAFTA, although the effects probably have not been large. The
> story in Mexico is more mixed. Clearly some workers have benefited, but
> many
> have also been hurt. Given the actual history of declining real wages in
> Mexico, I think it's pretty hard to argue that the counterfactual is that
> they would have declined even more, had it not been for NAFTA.
>
> Dean
>
>
>
>
>